1988-02-12

Hon. Doug Lewis (for the Minister of Finance) moved: that Bill C-109, an Act to provide borrowing authority, be read the second time and referred to a Legislative Committee.


Mr. Pierre H. Vincent (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, as Hon. Members are aware, the Financial Administration Act requires that statutory borrowing authority must be obtained from Parliament in order for the government to increase its outstanding debt. Specifically, Part IV, Section 36 of that Act requires that "no money shall be borrowed or security issued by or on behalf of Her Majesty without the authority of Parliament". This refers to new money only rather than the refinancing of existing debt since Section 38 of the Act provides continuing authority to borrow funds to repay maturing debt. Thus, statutory borrowing authority must be obtained from Parliament to permit the government to implement a regular debt program to meet its financial requirements.
Section 39 of the FAA, however, provides for the Governor in Council to authorize the borrowing of money if it appears that funds will not be sufficient to meet disbursements from the Consolidated Revenue Fund. This action is designed for short-term, temporary use only as the term of the borrowing may not exceed six months and each such borrowing requires approval by the Governor in Council.
Mr. Speaker, I would like to outline for the House the terms of the borrowing bill. The bill is structured to establish the principle that borrowing authority each fiscal year will be equal to the financial requirements plus a non-lapsing reserve. Given the uncertainty over the exact timing of the passage of the bill, it is also structured to ensure that the amount of authority available is always equal to this amount, regardless of when the Bill is passed. I will go over each clause in the Bill now.
Paragraph 2(1) of the Bill requests borrowing authority in the amount of $25.3 billion for fiscal 1988-89. This amount is equal to the $22.3 billion in financial requirements forecast in the budget plus a $3 billion non-lapsing reserve to cover contingencies such as a further build-up in official international reserves during fiscal 1988-89. Indeed, Mr. Speaker, you will see that The Fiscal Plan tabled this week is very clear in that respect.
Paragraph 2(2) states that all unused borrowing authority granted by the Borrowing Authority Act 1988-89, to the extent that the unused authority exceeds $3 billion, will be cancelled on March 31, 1989. This paragraph preserves the government's non-lapsing reserve to be carried forward into the next fiscal year and also ensures that $3 billion is the maximum amount to be carried forward.
Paragraph 3 states that any borrowing authority granted last year by the Borrowing Authority Act 1987-88 will be cancelled on March 31, 1988 or on the date that the new bill comes into force, whichever is later. Thus, this paragraph prevents the non-lapsing reserve granted for earlier years from accumulating but ensures that cancellation takes place at a time that is not disruptive to the implementation of the regular debt program.
Paragraph 4 ensures that if the new Bill is passed after March 31, 1988 and part of the non-lapsing reserve granted for 1987-88 is used, this amount will be deducted from the authority granted for 1988-89 and thus the total amount of borrowing authority available for the new fiscal year is not increased.
The borrowing Bill for 1988-89 is basically the same as the one for last year. As I said earlier, the amount requested is equal to the financial requirements plus a $3 billion nonlapsing reserve, once again, the same as last year. The new clauses, which I outlined above, simply ensure that these are the amounts available, regardless of when the bill is passed.
For the information of Hon. Members, Mr. Speaker, I would now like to review how the borrowing authority granted for the current 1987-88 fiscal year had been used to the end of January. For 1987-88 a total of $25.8 billion was granted, made up of $21.3 billion, an amount equal to the financial requirements forecast in February 1987, a $3 billion reserve and $1.5 billion provided a separate supplementary borrowing authority Bill for 1986-87. This latter amount was carried forward to enable $600 million of Treasury bills issued pursuant to Section 39 of the FAA in the 1986-87 fiscal year to be rolled over in the current fiscal year and to cover the

February 12, 1988
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delivery of $900 million of Canada bonds delivered in April, 1987 but sold in March, 1987 pursuant to Orders in Council granted in March, 1987, charging the issue of these bonds to borrowing authority granted for 1986-87,
To the end of January, domestic and foreign borrowing programs had used about $14.8 billion of the authority granted for 1987-88. Of this amount, about $7.8 billion was charged to the marketable bond program and $9.7 billion to the issue of Canada Savings Bonds. Over the same period the amount of Treasury bills outstanding was reduced by about $2.5 billion and about $0.2 billion of outstanding foreign debt, on balance, was redeemed. The reduction in the amount of outstanding Treasury bills to the end of January was the result of the large CSB sales last fall and the consequent need to reduce cash balances to more normal levels. Over the remainder of the fiscal year, net Treasury bills sales are expected to pick up substantially to finance the government's borrowing requirements. Over the fiscal year as a whole, the amount of borrowing authority remaining at the end of March, 1988 is expected to be somewhat less than $3 billion. Thus, foreign exchange transactions, which to the end of January had increased official foreign exchange reserves from the beginning of the fiscal year, and had to be financed through the sale of Canadian dollars, are expected to have used a portion of the reserve granted for 1987-88.
However, as Hon. Members know, these foreign exchange transactions have been large and volatile in the past and the situation could change considerably before the end of the fiscal year.
In closing, Mr. Speaker, I would like to remind Hon. Members that it is most important that the government be in a position to maintain an orderly ongoing debt program and to minimize uncertainty in the capital markets. Expeditious passage of this Bill will help to achieve these objectives.


Miss Aideen Nicholson (Trinity):: Mr. Speaker, we are here today to debate borrowing authority Bill C-109 after the presentation of a quite extraordinary so-called Budget which in fact was 95 per cent electioneering and self-congratulation on the part of the Government, with remarkably little content. The Government is asking us to give it authority to borrow over $25 billion but the Estimates will not be coming forward until about 10 days from now, so that we are being asked to approve a blank cheque with no idea of how this money will be spent. Certainly the Budget we saw yesterday gives us very little idea of how the money will be spent. Therefore, when the Parliamentary Secretary asks for such an important Bill to be passed quickly, he is asking for something that is totally unrealistic. The Official Opposition will be responsible. We certainly will not hold up the Bill unduly but we want to see the Estimates and we will want to have some careful examination of Government spending plans.
A well-known journalist wrote the other day that the trouble with the Budget, which is a paean of praise to the ruling Party, is that it strains credulity to the limit. Wrapped around one simple fiscal measure, a gas tax increase, the Minister of Finance (Mr. Wilson) has managed to work a whole Tory election manifesto. Its message, repeated endlessly in numbing detail, is that those we elected in 1984 have been better financial managers than those before them.


Mr. Nickerson:: They have!


Aideen Nicholson: He continues that if the Government of the day is going to produce a Budget that is 95 per cent electioneering guff and 5 per cent serious content, it is setting itself up for a few querulous voices to be raised in dissent. I think most of us would agree except we would say that it is not only querulous voices that will be raised in dissent but voices of reason which will be asking for the facts that were not in the Budget produced the other day.
The Government is asking for authority to borrow $25.3 billion, too much for a Government which has not delivered on its promises to Canadians not to raise taxes and to lower the deficit. The Minister of Finance, in his budget speech, said the deficit had been reduced to $29.3 billion. However, this is the result of a lot of smoke and mirrors. Some very creative accounting has been used to create the illusion that the public debt has been lowered when in fact it is higher.
The second point I want to repeat is that the Main Estimates will not be tabled until February 23, 1988, so we are being asked to vote on this Bill on faith. This Budget does not inspire confidence. In fact, the Budget brought down Wednesday, as my colleague, the Hon. Member for Laval-des-Rapides (Mr. Garneau) pointed out, is not even a proper Budget. A Budget usually sets out a Government's philosophy, policy and plans, but the Government wasted time and energy to produce a package of self-serving, self-congratulatory, repetitious rhetoric on what the Government is alleged to have done for Canadians since 1984.
Not one of Canada's economic problems has been solved. This budget puffery and self-congratulation is an insult to poorer Canadians, older workers, senior citizens, the unemployed and the homeless. The Government has left those people out of the Budget and misled those Canadians it hoped to reassure with its puffed-up rhetoric.
I want to return to the illusory $29.3 billion deficit which in fact is probably closer to $32 billion or $33 billion. One of the accounting tricks used is that of accelerated remittances. Canadian employers who must deduct income tax, unemployment insurance premiums and Canada Pension Plan contributions from their employees and remit those deductions to the Government have been steadily required to do it more often. Starting January, 1987, instead of remitting the deductions once a month they became obliged to remit them twice a month. That gives the Government a once-only increase in cash flow of $1.6 billion. The figures look better at the end of
February 12, 1988

the financial year because the Government has one additional fortnightly payment, but that is not a real saving.
Subsequently the Government moved to require employers to remit weekly, a further one-time increase in their cash flow, but not a real reduction in expenditures in any way. The Government has also postponed certain expenses such as spending on defence. In addition, the Government has given itself a six-month interest free loan in that although certain income taxes have been reduced as of January of this year the payroll deductions do not in fact take effect at the new rate until July. Therefore, employers are still remitting to the Government at the old unreduced rate. That gives the Government, in effect, an interest-free loan for this year of something in the order of $1 billion.
No less an authority than the Bank of Montreal said in one of its recent publications that if you take away all this creative accounting the public debt should be about $4 billion higher than the figure quoted by the Minister of Finance of $29.3 billion.
The Government has raised taxes at a rate higher than that of any Government since Confederation.


Mr. Turner (Ottawa Carleton):: Who caused the debt?


Aideen Nicholson: Many of these taxes were built into the system and will continue in a hidden way year after year. For example, the deindexation of benefits and the deindexation-


John Napier Turner: That's old news.


Aideen Nicholson: Mr. Speaker, the Hon. Member opposite is apparently rather impatient to get into this debate. Perhaps you would be kind enough to reassure him and tell him when he is scheduled to speak, although he does not usually make speeches other than when he is sitting down.


John Napier Turner: Who listens.


Aideen Nicholson: As I was saying, the Government has raised taxes more than any Government before it since Confederation. It continues the process. The Budget we heard on Wednesday had one additional tax measure which showed. I will return to the hidden ones, but the one that showed was another one cent a litre increase in gasoline tax effective April 1, 1988. In all, that makes an increase of 23 cents a gallon since 1984.
We also heard the announcement about the new rules for calculating federal sales tax, another band-aid mechanism that will not end the problem of disparity in tax rates across industries and the bias against exports.
The Minister has been holding forth about manufacturers sales tax for a long time. He has described it as a killer of jobs. Nevertheless, he keeps increasing the base and the rates. He tells us that at some date in the future he will replace the
Borrowing Authority
manufacturers sales tax with a new consumption sales tax. Meanwhile, as he inveighs against it, he increases its use.
1 want to describe briefly some of the increases in taxes which we have seen since the Government came in. Some of them are built in so that they increase year after year. The most important one, of course, was the deindexation of the tax system. This continues year after year. At the same time as the Government reduces the payments for family allowances, child deductions, and spousal allowances-tax measures that are particularly useful to young families with young children-the personal exemption on income taxes has had indexation removed from it. This means that there is built-in forever and ever a steady increase in the tax system. This year alone it is worth $750 million to the Government although all the selfcongratulation in the Budget speech did not mention that.
The Minister criticizes the manufacturers' sales tax so much, but look at the way he has used it since he came to power. On October 1, 1984, it was increased from 9 to 10 per cent. On January 1, 1986, it was increased from 10 to 11 per cent. On April 1, 1986, it was increased from 11 to 12 per cent. The impact on tax revenues was a $3 billion gain to the Government as a result of those.
On July 1, 1985, we saw the sales tax extended to candy and soft drinks. On July 1, 1987, we saw the sales tax extended to fast food and snacks. Those two measures netted the Government $460 million. On January 1, 1988, we saw sales tax increased from 8 to 12 per cent on paint, wallpaper, and toys. That measure gets the Government $60 million a year. The increase in gasoline excise tax of 2 cents a litre on September 3, 1985, brought the Government $900 million a year. The one cent a litre increase on January 1, 1987, and the one cent a litre increase on February 9, 1987, each brought the Government $450 million a year. That is before yesterday's increase.
We have seen progressive increases in air transportation taxes since May 1, 1986, which have netted the Government $55 million. There have been increases in duty on alcohol and tobacco; the first May, 1985, the second February, 1986, and another in January, 1988.
The Government continues to increase taxes while not lowering the public debt. On January 1, 1988, we had a 10 per cent tax on long distance telephone calls and cable television services. That will bring the Government $945 million a year. We saw the elimination of the Registered Home Ownership Savings Plan in May, 1985. The Government gained $105 million from that. We saw a permanent 3 per cent surtax on all taxpayers applied on July 1, 1986, and that continues. Many people think that it ceased at the same time as the 5 and 10 per cent surtax on high income earners ceased in December, 1986, but not so. That surtax is still in place. The Government has taxed Canadians to the hilt but is not reducing spending.
Let us look at some examples of what the Government spends its money on. We saw the bail-out of the Canadian Commercial Bank and Northland Bank, and the cost of the

February 12, 1988
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Estey Commission set up to examine the Government's poor decision, $1.6 billion and climbing.
The cost of the Stevens inquiry was $2.3 million. New uniforms for the Armed Forces amounted to $2.7 million, which is not an expense anyone would grudge if they were good quality, but we hear complaints that the uniforms smell.
The salaries and office expense of Canadian trade negotiator, Simon Reisman is $10 million over three years. However, in order to promote this deal there is a $12 million campaign to persuade Canadians of the value of something which is quite questionable.
The budget for Cabinet Ministers' staff doubled under the Government. The new cost is $15.1 billion a year.
The Shamrock Summit in Quebec cost $2.6 million. While I am sure the Prime Minister (Mr. Mulroney) sang nicely, 1 question whether it did anything else for Canada.
Office renovations for Conservative Ministers have come to $107,500 since they first took power. Redecoration of certain Ministers' offices amounts to $425,201.
We then come to the Prime Minister's travels. A trip to Asia in May, 1986, cost $1 million, including $3,500 for the butler and maid, and $150,000 for the sound and video equipment. The Prime Minister's trip to New York cost $62,225, including $13,000 for motor vehicle rentals. The Prime Minister's trip to Paris for the francophone summit cost $492,000-


Mr. Wilson (Etobicoke Centre):: Who paid for that?


Aideen Nicholson: The French Government paid for the PM's hotel Bill of $28,000, in answer to the Member opposite.


Michael Holcombe Wilson: The French Government paid for it.


Aideen Nicholson: There is $492,000 minus $28,000 that still must be accounted for.
There was a shadow aircraft flying alongside the Prime Minister's airplane to Baie Comeau in July and to Toronto in August, which cost $1,900 an hour. Executive jet bills run up by the Conservative Government in the first 45 days in office amounted to $345,000. I could go on and on with the list. The fact is that the Government's behaviour in office does not inspire confidence and certainly does not justify it coming in without the Estimates, asking to have its borrowing Bill passed on faith.
Since the forecast for the 1987-88 fiscal year was last given in the June, 1987 White Paper, budgetary expenditures have grown by $1.1 billion, in spite of the fact that almost $1 billion less than anticipated was paid out in unemployment insurance benefits. There is $2 billion in increased public debt charges from a government that undertook to reduce the public debt.
Both the Minister of Finance and the Prime Minister (Mr. Mulroney) said before and after they came to office that taxes would not be increased, yet taxes and spending have increased at an almost unbelievable rate.
The Minister congratulated himself generously in his Budget Papers for the fact that some aspects of the economy are better than expected. These congratulations do not belong to the Government. The improved state of our economy in some respects is due to the fact that we are in the sixth year of recovery from a cruel and almost unbelievably harsh worldwide economy. Of course, the Government inherited certain sound building blocks from the previous government which had managed an extraordinarily difficult recession in a way designed to reduce, as much as possible, the hardship on Canadians. Furthermore, the Government has benefited from a change in Canadian habits. Canadians used to be great savers but are now consuming more. The Government and the economy have certainly benefited from increased consumer activity.
In summary of my criticisms of the Budget and the Government's performance to date, I suggest that we have a Government that has taxed and spent. Taxes are increased and the public debt is increased. It is a Government that has not shown much concern for low and middle income Canadians. It has been particularly hard on young families with children, who are bearing the brunt of most of the Government's policies.
Since 1984 individuals have seen both their personal and sales taxes increased by $29.3 billion, or 68 per cent. Corporations have had their taxes increased by 28 per cent, or $2.6 billion. Even after so-called tax reform, 60,000 profitable corporations still pay no tax. Yet what does this mean to the average family? A family of four with a single earner and an income of $32,000 has faced a total tax increase since 1984 of $1,200 per year. There is very little for the average income family to correct the inequities of previous Budgets and the White Paper exercise in tax reform.
The Government has taken some steps to increase the lot of the very poorest, those with incomes of under $20,000 a year, but those with incomes between $20,000 and $40,000, especially if they have children and there is a spouse who is not working outside the home, are carrying the main brunt of the Government's policies.
With all those conditions, I think it is absolutely ridiculous for the Government to come in with a request to borrow over $25 million with no Estimates and ask us to vote for that Bill today on faith. When we see the Estimates on February 23 and have some idea of exactly how the Government proposes to spend the money that Canadian taxpayers have had extracted from them, we will be in a better position to decide on this Bill.
The Government continues to boast about the job creation figures. Those figures have, of course, improved, as they should have in the sixth year of recession. We still have over a
February 12, 1988

million Canadians unemployed and the Government appears to have abdicated its responsibility to them. Programs for job creation are steadily being cut. We are told that the economy is so good people should be able to find jobs without any assistance from the Government. That is true in certain regions. It is certainly not true in all parts of Canada and it is certainly not true for the young, whose unemployment rate continues to be twice the national average, and for people over 50 who are displaced for any reason and who find great difficulty getting into retraining programs.
We have a Budget before us that addresses the future in an entirely inadequate way in at least two respects, first, in its treatment of the deficit, which has been less than honest and, second, in its forecast for the Canadian economy, which is all smoke and mirrors.
In the tone of incredible self-congratulation which runs through these Budget books, we find the Minister is even comparing himself with the Olympic athletes. He invites all Canadians to emulate the Olympic athletes gathered in Calgary. He stated their commitment and quest for excellence must be what we as a nation bring to the task of building our economy. That is a fine sentiment. Is the Minister prepared to put some action behind that sentiment?
Two years ago we had a budget that told us that the deficit would come down in stages, to $27.9 billion in the fiscal year 1989-90, $25.8 billion in 1990-91 and $23.5 billion in 1991-92. That was what the Minister said. It was in his papers. He is now showing a $28.6 billion deficit for 1989-90 and, as I said, that also depends on creative accounting. The real figure is probably nearer $32 billion.
The Minister of Finance in his Budget papers also included one thick document entitled The Fiscal Plan, but it gives no detailed figures after the next two years. What kind of planning is that? We used to have a five-year plan. In fact, we were led to understand there would be a five-year forecast. This document tells us, without giving us any detail, that by 1992-93 the deficit will have shrunk to $19.5 billion. It does not tell us how this will be achieved. It is another statement of faith.
Furthermore, the Minister talks about an improving employment situation but traditionally we have needed to see 3 per cent growth in the economy just to stand still in terms of job creation. The Minister anticipates 3 per cent growth or better from now until 1993, but other economic forecasters see lower growth, more around 2.5 per cent. So it goes, on and on.
Unfortunately, the Department of Finance projections appear so rosy that one has to take them with some skepticism. There are very few solid figures in any case. There is a great deal of puffery. We have five documents, in all about 18 inches thick, to announce one tax measure, an increase of a penny a litre on gasoline and one cut of $300 million in Government services somewhere-we are not told where. We have to wait for a Treasury Board announcement to see when, where and how. For those two announcements we received about 10
Borrowing Authority
pounds of paper, essentially of a self-gratulatory description- less than accurate-of the Government's term in office. This Budget is an electioneering document prepared at the expense of the taxpayers. It is less than honest.
On the basis of that, and no Estimates, we are being asked to give the Government borrowing authority of $25.3 billion today. I am sure you can see, Mr. Speaker, that while the Government has to be able to transact its business-even if we think it is transacting it less than efficiently, as a responsible Official Opposition we will certainly not hold up the borrowing authority indefinitely-we do want to see the Estimates. We want to scrutinize the expenditures. We want a little more time to examine the tables which were published with the Budget papers, such as they were. The information was limited. Some of it is contradictory. My Party will have other speakers today on this Bill, but we will not be holding up the Bill unduly. However, we certainly would want to see the Estimates before it is passed.


Ms. Audrey McLaughlin (Yukon):: Mr. Speaker, I am pleased today to speak on Bill C-109, an Act to provide borrowing authority. As the previous speaker said, we do not have the official Estimates so we do not have the details of exactly how this money will be spent and exactly where the cuts will be in the non-statutory programs as outlined in the Minister's Budget this week. Therefore, it is very difficult to comment on the $25.3 billion which is being sought under this borrowing authority Bill. We are aware that it is necessary for the business of the Government to carry on, but the only indicaters we have from the Government of where it is intending to go with this was in the Budget speech this week.
I would like to make a few references to the Budget and to look at a few areas where, perhaps if there had been more targeted spending, more efficient spending, the need for authority to borrow so much would not be required.
My Party along with many Canadians, waited with great excitement and anticipation for the Budget which came out this week. We expected strong measures to attack many of the issues of the day, such as regional disparities and cutting the deficit. This borrowing Bill certainly indicates that we need to continue to pay our debts and that the debts are not going to go down by very much.
Some of us had hoped that this Budget would take a strong stand, that we would be able to reduce our deficit by realigning some priorities the Government has outlined in previous papers, for example, by rejecting huge expenditures of billions of dollars for such large ticket items as nuclear submarines, which are of dubious value. Perhaps we could look at something more realistic and more in line with what is really needed for the protection of our sovereignty and the defence of Canada.
We had hoped to see some innovative measures which would have increased tax revenues thereby reducing the need for such

February 12, 1988
Borrowing Authority
a large amount of borrowing. Increasing the number of taxpayers increases the amount of revenue. We had hoped to see very strong measures to attack regional unemployment which would have put the over 1 million unemployed back to work, thereby increasing the number of taxpayers.
We have not seen the Estimates so we do not know exactly how all of these funds will be allocated. What we saw instead in the Budget is lost opportunities. It fails to raise tax revenue from corporations and it fails to get people back to work. In the Budget we see that the Government has decided to hold its course.
At first, when we looked at the Budget many of us thought it was a sort of ho-hum, couch potato type of Budget. There was nothing in it worth getting up off the couch to turn off the TV and watch. When one considers the amount of money that the country is having to borrow under this Bill, we know that we are in very serious trouble. The biggest problem will be the legacy left for the next Government after this obvious preelection Budget. Of course, Members of the NDP are pretty worried about, that given that it is most likely that we will form the next Government.
As you know, Mr. Speaker, the New Democratic Party has raised some very serious concerns about the trade agreement and economic union with the United States that this trade agreement causes. When we look at the Budget we can see what we are losing in revenues, which relates to the amount of money we have to borrow. Lost revenues obviously necessitate the borrowing of more money. In looking at the Budget we see that the Government has estimated it will lose $55 million in revenue owing to the bilateral agreement in 1988-89. On top of that we will lose $460 million in 1989-90 because of this bilateral trade agreement.
Jane Taber of The Ottawa Citizen in an article yesterday estimated that these losses will continue to increase as a result of the trade agreement. She estimates that they will increase to about $2.5 billion by 1999 when the deal will be fully implemented.
Under the seemingly benign heading of "Changes due to economic and other factors" the Government also projects a loss in revenue from unemployment contributions by $15 million in 1988-89 to a whopping $440 million in 1989-90. I might be pretty new to the House but it seems to me that what that says is just what Members of the New Democratic Party have been saying all along, that is, that the Government anticipates a significant decrease in employment in the next two years.
In this respect we have to consider again the trade agreement and the economic union with the United States. If this were not the case then why would contributions to unemployment insurance decrease? They can only decrease because people are not working or because they are making lower wages.
If one looks carefully at this one part of the Bill, one will see that we are projecting very high losses in revenue from the bilateral agreement and that obviously the Government is anticipating significant decreases in employment up until 1990. This causes us to observe that the trade agreement with the United States looks less free each day. This borrowing Bill confirms that it is not so free, which leads me to my next point.
The Budget fails to meaningfully address regional disparity. If the Government had come up with proposals to attack some of the problems connected with regional disparities, there may have been less of a need for such a high amount of borrowing. In this respect I want to give some concrete examples with respect to the number of people unemployed.
1 am talking here about the 19.6 per cent of the people of Newfoundland who are unemployed, the 11.4 per cent of the people of British Columbia who are unemployed and the 9.7 per cent of the people of Quebec who are not working. I am talking about the 13.7 per cent of the people of New Brunswick who are not working. These people are not paying any taxes. This is why I say that the Government has lost the opportunity to bring forward some innovative measures to raise revenue.
Despite the Government's self-congratulatory comments on how many jobs it has created, that is of little comfort to the almost 20 per cent of Newfoundlanders who are unemployed. There was an important statistic left out of the Government's self-congratulatory message. According to Statistics Canada, there were more bankruptcies in Canada in 1987 than in any year since 1984. In 1987 the largest number of people and businesses went bankrupt, any they were not paying any taxes. The number in this respect was 24,348. Can you imagine, Mr. Speaker, the effect on families and individuals of those bankruptcies? We only see the statistics. We do not see what is really happening to the families and to those people the statistics represent.
There was an opportunity to really attack regional disparities, to ensure that people everywhere would be working, and working meaningfully. One of the best ways to bring this about would have been to ensure that the economic development programs that exist for the regions were included in this measure. We have to raise a question about that. In its regional policy, as outlined by the Minister, the Government mentions three things; the Western Diversification Fund, the Atlantic Opportunities Fund and the Northern Ontario Fund. So far those are nothing but names. We do not see what they will be doing. These programs do not address the needs of northerners, or the needs of many others in the northern parts of other provinces who are often in equally disadvantageous positions. Southern Ontario seems to be presented as a place that is really making it, where everyone is doing well. Even in southern Ontario in some places, such as Windsor, the unemployment rate is 14 per cent.
I see that my time is up for the moment, Mr. Speaker. I would like to continue my remarks later if I may.
February 12, 1988


Mr. Speaker:: It being eleven o'clock, pursuant to Standing Order 19(4) the House will now proceed to Statements by Members pursuant to Standing Order 21.



STATEMENTS PURSUANT TO S. O. 21


Hon. Bob Kaplan (York Centre):: Mr. Speaker, this week in Montreal the Government is sponsoring a conference on airport terrorism. This follows a very good initiative launched many years ago by Pierre Trudeau. Ironically, at the same time there is a terrorist present in Canada who got here through a series of bungles. While the Government is attempting to deport him, or stating that it is, it is not following the most expeditious means at its disposal to do so. I have asked questions about this matter and received pretty unsatisfactory answers.
I am wondering why the Attorney General of Canada (Mr. Hnatyshyn) has not taken the initiative of charging this individual, under Section 6 of the Criminal Code, with the offence of hijacking. This is a relatively new section of the Act. Because that individual has been charged and convicted in another country, he has not been dealt with within the meaning of the treaty because he did not serve his full sentence. I would hope that the Attorney General would consider that recourse.



CANADIAN NATIONAL RAILWAYS


Mr. Guy St. Julien (Abitibi):: Mr. Speaker, on March 19, 1975, journalist Armand Beaudoin wrote an article in VEcho Abitibien under the heading: CN's lousy service-Merchants up in arms, in which he said: "At CN, the whole attitude has become so negative that nobody knows what is happening. We think the people responsible for this situation are in Montreal."
Things are the same today, Mr. Speaker. We are all fighting to keep CN in Abitibi. CN could increase its market share by 28 per cent. CN is viable in Abitibi-Temiscamingue.
Mr. Speaker, I want to ask the President of CN, Mr. Lawless, to appoint immediately a permanent district manager in Senneterre. We also want to see Mr. Lawless in Senneterre a few weeks from now, to meet with Mayor Denis Sawyer and
members of the Senneterre town council, a meeting that will be attended by the federal and provincial Members for Abitibi East, Rouyn-Noranda, Abitibi West and Ungava, and by the Abitibi-Temiscamingue regional development committee for railway transportation.



CANADIAN BROADCASTING CORPORATION


Mr. Jim Fulton (Skeena):: Mr. Speaker, while the Minister of Communications (Miss MacDonald) undertakes the extraordinary step of having Cabinet review Allarcom's allnews channel bid, and Canmet's entry into the telephone market, CBC Radio is shutting down its award winning station CFPR-Prince Rupert and the Minister refuses to do anything.
According to the recent Task Force on Broadcasting Policy, the per capita cost of providing local news coverage to all under-serviced areas in Canada amounts to a mere 10 cents per year. The Mulroney Government has hacked and slashed the CBC budget to the point where, in order for the good people of the British Columbia interior to receive improvements in CBC Radio, another region of British Columbia, the northwest, must suffer.
The Broadcasting Act of Canada states that CBC must serve "the special needs of geographic regions". Surely closing CFPR in Prince Rupert, and reducing local northwest B.C. reporting to ad hoc broadcasts through Prince George, violate the intent of the Act and the intent of Parliament.
The B.C. northwest and the B.C. northeast are distinct geographic regions. They can both be served more effectively by CBC, and while I will be putting pressure on the corporation to stop plans to shut down CFPR, I also call upon the Minister of Communications to display a commitment to extending public broadcasting. If resources are to be slashed to the CBC it in turn cannot meet its legislated responsibility to the people of B.C.
1 urge the Minister of Communications to wake up and realize what her Government's continued attacks upon public broadcasting mean to the people who live in the regions of Canada.



EMPLOYMENT


Dave Nickerson: Mr. Speaker, mining narrow veins calls for a high degree of skill and judgment on the part of the individual miner. Until the recent

February 12, 1988
gold boom Canada had concentrated on large scale mining so now we have a shortage of conventional miners. Recently Cornish miners have had to be imported into Nova Scotia. In my riding, mine managers tell me of their great difficulty in attracting skilled personnel.
High wages are now being offered in the mines, and I would encourage young people to look to a career in this industry.
The Minister of Employment and Immigration (Mr. Bouchard), recognizing the problem, has designated "hard rock miner" as a "shortage occupation" and, as such, eligible for training assistance under the Skills Shortages Program. This will certainly help.



AEROSPACE


Mr. Marcel Prud'homme (Saint-Denis):: Mr. Speaker, they say the best speech is a short speech. Bearing that in mind, I think the time has come for the Government of Canada to declare that Montreal is "spatial". Enough of this shillyshallying and procrastination. Montreal is not special but spatial.

Montreal is not special but "spatial".


An Hon. Member:: Bravo!


Marcel Prud'homme: A Conservative says "Bravo"!



BANKS AND BANKING


Mr. W. Paul McCrossan (York-Scarborough):: Mr. Speaker, preliminary analysis of the 1987 profits in Canada of major banks and trust companies indicates that the profit per hundred dollars of Canadian assets administered reached alltime highs, some 35 per cent greater than the previous record.
All Canadians know that our chartered banks experienced massive losses on foreign loans in 1987. However, none cut dividends, unlike in the United States where the big money centre banks still face strong regional competition.
The finance committee and the Minister of Consumer and Corporate Affairs (Mr. Andre) should consider an investigation under the Competition Act to see whether large Canadian banks are acting together to fund their foreign loan losses on the backs of Canadian consumers.



WINTER OLYMPIC GAMES


Mr. Howard McCurdy (Windsor-Walkerville):: Mr. Speaker, we have reason to be proud today, because tomorrow the Winter Olympics open in Calgary. After months of careful preparation, the big day has come at last. The world's best athletes are now in Alberta, and we wish them all the best of luck.
To all those in Calgary who worked so hard to organize this international event, we say: Thank you!

I want to take a few moments to mention the many thousands of other ordinary people who rarely get recognized at a time like this, and whose dedication has allowed these athletes to excel. I refer to the coaches who labour long and hard, often early in the morning or late at night, especially the minor league coaches who help to teach the basic skills and transform our children into future champions; to the parents who sacrifice so much, and who underwrite so much of the cost of developing the skills our athletes need to challenge the world; and to the thousands of others who organize the leagues, run the track meets, and provide the infrastructure we all need.
All of those people have contributed to the Olympic Games. They are their games, and they should be truly proud of them. Once again, best wishes to our athletes who, we know, will represent us and themselves to the best of their abilities. They are truly champions in our hearts.



DISASTERS


Mr. Brian Tobin (Humber-Port au Port-St. Barbe):: Mr. Speaker, Monday, February 15, 1988 will mark the sixth anniversary of the sinking of the Ocean Ranger in the wintry Atlantic off the east coast of Newfoundland. On that evening 84 men lost their lives.
The Royal Commission into this tragedy noted that "the loss of the Ocean Ranger was caused by a chain of events which resulted from a coincidence of severe storm conditions, design inadequacy and lack of knowledgeable human intervention". The Royal Commission produced 136 recommendations aimed at preventing a similar tragedy. The federal Government and oil companies have quickly acted on quite a number of those recommendations, but many remain ignored to this point.
Today, six years after the sinking of the Ocean Ranger, individuals who work on drilling rigs off eastern Canada are
February 12, 1988

still at terrible risk if they must abandon the rigs and take to the sea in storm conditions.
John Parsons, an engineer hired by the Newfoundland Government to examine safety in offshore drilling, has stated that the existing lifeboat escape systems remain appallingly inadequate. Mr. Parsons has suggested that an independent safety division be created with wide powers of enforcement within the Canada-Newfoundland Offshore Petroleum Board to minimize conflicts between the drive for energy selfsufficiency and the need for safety for people working on the rigs.
As bad as the Ocean Ranger disaster was some six years ago with the loss of 84 lives, what would be worse is if we failed to heed the advice and the lessons that we should have learned six years ago at the cost of 84 lives, and at a cost of $15 million for a Royal Commission to make recommendations to ensure that those who work in the harsh wintry conditions of the Atlantic, and elsewhere in offshore rigs, are safe, and that we have done everything humanly possible to protect them.



THE ECONOMY


Mr. Gabriel Fontaine (Levis):: Mr. Speaker, the Canadian Chamber of Commerce, a credible organization, has published the results of a poll of 904 members, 60 per cent of whom have fewer than 100 employees. What do its members think of the present economic climate? Eighty-seven per cent: Very good. About the impact of our policies announced in Spring 1985? Seventy-seven per cent: Very good. The political impact of our Government? Sixty-three per cent: Very good. Degree of satisfaction with federal policies? Seventy-one per cent: Very good. The Chamber of Commerce says that the most important factor for business development is first of all, fiscal stability. We have delivered on fiscal stability. Second, continuity and a fair corporate income tax system. We have delivered. Third, keeping interest rates under control, and we delivered on that as well. Fourth, reasonable labour costs, and our policy of letting the laws of the market place prevail has given Canadians reasonable labour costs. That is our economic message, Mr. Speaker!
[DOT] (mo)



ETHNIC AFFAIRS


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, February is Black History Month, a worth-while time to reflect upon the magnificent contribution to our nation of Canadians descended from the nations of Africa.
Great black Canadians of the past include Matthew da Costa, who arrived in Canada with Champlain in 1605; William Hall of Nova Scotia who was the first Canadian to win the Victoria Cross; Mary Ann Shadd, lawyer, teacher, fiery editor, and abolitionist in 19th Century Upper Canada; Portia White, the great opera singer; and Delos Davis, the first black King's Counsel in the British Empire.
These giants paved the way for those who excel today: Lieutenant-Governor of Ontario and former Member of Parliament Lincoln Alexander, author Austin Clarke, jazz pianist Oscar Peterson, Order of Canada recipients Carrie Best, William P. Oliver, and Alton Parker; Juno Award winners Dan Hill, Lillian Allen, and Billy Newton-Davis; the fastest man alive, Ben Johnson; one of the fastest women alive, Angela Issajenko; and such leaders as provincial ombudsmen Daniel Hill, Gordon Earle, former Nova Scotia Human Rights Commissioner George McCurdy, and former British Columbia MLA Rosemary Brown.
The list of achievers is endless and bears witness to the historic mission of black Canadians to strive for the attainment of the highest democratic ideals-liberty, justice, and equality-despite the obstacles of discrimination and bigotry that sadly exist. Yet, this month reminds us that, no matter how long the struggle, they have overcome.
Of course I want to add to the list the Hon. Member for Windsor-Walkerville (Mr. McCurdy).


Some Hon. Members:: Hear, hear!



AIRPORTS


Mr. Geoff Scott (Hamilton-Wentworth):: Mr. Speaker, I am delighted to report that, after months of working and waiting, Air Crosby Control has given us a final clearance and Hamilton's International Airport is about to take off.
The approval of the Minister of Transport (Mr. Crosbie) today for Pan Am Express to operate three flights a day to John F. Kennedy Airport from Hamilton potentially makes our airport one of the great airports in the country.

February 12, 1988
It is a major and welcome initiative by the Mulroney Government to help relieve the congestion at Toronto International Airport.
I am delighted to have received the assistance of political representatives from four levels of government and all three Parties in our area in convincing Transport Canada to give this much needed vote of confidence to Hamilton's airport. The Hon. Members for Niagara Falls, Hamilton West, St. Catharines, Brant, Haldimand-Norfolk, Erie, Welland, Lincoln, Burlington, Halton and even Hamilton Mountain and Hamilton East, and many others helped.
I know, Mr. Speaker, that we are not supposed to mention Members by name, but I will say: ''Bless you, John Crosbie; thank you, Prime Minister Brian Mulroney".



THE BUDGET


Mr. David Berger (Laurier):: Mr. Speaker, I am glad to see that the Minister of Finance (Mr. Wilson) is here, because as we reflect upon the effects of the Mulroney-Wilson Budget and tax reform package, I would like to remember the words of Frank Scott who once wrote:
Low income individuals and families pay a higher proportion of their incomes in all kinds of taxes than those with higher incomes.
The poem was entitled Cent ans d'injustice and was written in 1967. Some 21 years later we can only add:
[ Translation]
The more it changes, the more it is the same.

[English)



PROVINCIAL AFFAIRS


Mr. Barry Turner (Ottawa-Carleton):: Mr. Speaker, the Liberal Government of Ontario and its so-called saviour has abdicated a major responsibility to the municipalities- Sunday shopping. What a cowardly, shameful decision on behalf of the people of Ontario.
The Supreme Court of Canada has said that Ontario has the authority to legislate Sunday closings, and Ontario has refused. That is not leadership. That is a cop-out.
Church leaders, business leaders, politicians, and ordinary Ontarians are banding together to form the Coalition Against Opening Sunday Shopping. The Ottawa-Carleton Board of Trade Chairman, Tim Whitehead, and its President, Lisa
Hopkins, have sent a clear message of opposition to Queen's Park. They have all got my vote. This is an outrageous decision.



NATIONAL DEFENCE


Mr. Dan Heap (Spadina):: Mr. Speaker, the National Action Committee on the Status of Women has recently written to the Prime Minister (Mr. Mulroney) saying that in light of the new spirit of co-operation between the U.S.S.R. and the U.S.A., it is asking him to withdraw the Department of Defence White Paper. It says:
Instead of re-affirming our differences with the Soviet Union, escalating further the very dangerous arms race, and increasing our economic military burden, we are asking you to adopt a more rational, humane, and effective policy.
Already, we can see a decline in government services as people live on the streets and line up for food. As the accompanying chart shows, far more jobs are created in responding to human needs in Canada and around the world than in military production. We also do not believe that more weapons make us more secure. We prefer non-provocative defence and nuclear free areas, particularly a nuclear free Arctic verified by all the Arctic nations.
The deployment of expensive nuclear-powered submarines we believe endangers the fragile ecosystem and violates the spirit if not the letter of the Non-Proliferation Treaty. The cost of one submarine could radically improve life for the one million Canadian children who live below the poverty line.



THE ECONOMY


Mr. David Daubney (Ottawa West):: Mr. Speaker, nothing is more basic to a strong framework for private sector growth and job creation than responsible management of government finances.
In 1984 the federal deficit and national debt were almost out of control. The Government's first priority had to be to get government spending under control. We have done so.
This week's Budget maintains the course of consistent adherence to fiscal principles first set out in November, 1984. We are achieving the fiscal targets we set ourselves. We are achieving steady year to year declines in the deficit. The reduction projected for 1988-89 will be the first time in the post-war period that the deficit has declined four years in a row.
Canada's strong economic growth, coupled with the Government's fiscal program, has created the capacity to carry forward the Government's commitment to priority programs.
February 12, 1988

The Government is committed to ensuring an economic future that provides challenging opportunities for our children and economic security for all Canadians.



ORAL QUESTION PERIOD


Mr. Raymond Garneau (Laval-des-Rapides):: Mr. Speaker, the Minister of Finance is probably aware that, while his high interest rate policy might suit Central Canada, it is extremely harmful for the remote regions, where the major problem is not inflation, but unemployment. Yesterday, the chief economist of the research firm Data Resources joined the Canadian Chamber of Commerce and the Canadian Manufacturers' Association in asking for lower interest rates.
Here is what I want to ask the Minister of Finance: Does he intend to resume his discussions with the Governor of the Bank of Canada to try to convince him that the current interest rate policy is not necessary and that it affects mostly the remote regions of Canada and is especially harmful to the unemployed in those regions?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, 1 think 1 have responded on a number of occasions to that particular question. What I should say to the Hon. Member is that interest rates are down 3 percentage points from what they were when we came into office. They are down about one and a quarter to one and a half per cent from what they were in October of last year. The bank rate came down an eighth of 1 per cent yesterday.
In response to the Hon. Member's concerns about the regions of the country, let me say to him that we must have one monetary policy for the whole of the country, but fiscal policy can be addressed directly to particular regions.
Let me just read what we have done for Newfoundland, to pick one province. The transportation and highways ERDA agreement, $112 million; the pulp and paper ERDA agreement, $38 million; forestry resource development, $33 million; Channel of Port aux Basques water supply, $6.5 million; Newfoundland offshore development fund, $225 million; Goose Bay airport redevelopment, $93 million; the FBI equity injection of $77 million; Terra Transport and other transportation-I could go on and on, Mr. Speaker.


Mr. Speaker:: The Hon. Minister of Finance says that he could go on and on. I have no doubt that he would have.


Some Hon. Members:: Oh, oh!
Oral Questions


Mr. Speaker:: The Hon. Member for Laval-des-Rapides.


INCREASED GASOLINE TAXES
Raymond Garneau: Mr. Speaker, probably 75 per cent of the things the Minister just mentioned were signed by the previous Government. It is a very hard fact that the Newfoundland rate of unemployment is three times higher than the Ontario rate of unemployment.
Not only does the high interest rate policy of this Government hurt the regions but the new excise tax on gasoline will increase transportation costs for all Canadians, particularly for industries established in remote areas, and will hit low-income Canadians very hard. The new sales and excise taxes both will have increased the price of a gallon of gasoline by 27 cents. Why is the Minister doing that to the poor regions of Canada?


Geoff Wilson: Mr. Speaker, the Hon. Member threw a few little zingers into his preamble. First, the vast majority of the things I read out were things that were signed by this Government with the Province of Newfoundland. A very limited number which were signed by the previous Government have been improved upon by this Government.
As I have indicated with the list of initiatives taken by the Government, we have demonstrated by our actions that we are concerned about the high level of unemployment in the regions of the country. The Prime Minister himself has met with the Premiers of the provinces involved and they have, between themselves, generated a number of initiatives. The Atlantic Canada Opportunities Agency is clearly directed at improving the regional disparities in Atlantic Canada. The Western Diversification Fund is another example of this.
The last point the Hon. Member made is beyond me. How can he have the gall to stand up in the House and talk about gasoline prices when the previous Government, which he supported, was responsible for a doubling of gasoline prices during the years 1980 to 1984? That Hon. Member should be sitting in his chair with his head hanging in shame.


Raymond Garneau: Mr. Speaker, 27 cents per gallon in three and a half years is quite an achievement, and the Minister will get the gold medal in Calgary for that for sure.


HIGH UNEMPLOYMENT RATE IN CERTAIN REGIONS- GOVERNMENT STRATEGY TO HELP WORKERS
Raymond Garneau: Mr. Speaker, after six years of economic recovery, as the Minister of Finance himself stated in his Budget speech, which recovery began before he was appointed Minister of Finance, the rate of unemployment in the regions is even higher than before the economic crisis of 1981-82.
Mr. Speaker, the policies of this Government are creating two Canadas, and I would like to ask the Minister of Finance what strategy he will propose, as it is quite clear, in spite of

February 12, 1988
Oral Questions
what he said, that unemployment in Newfoundland is still three times as high as in Central Canada. The same is true in the Gaspe and several other regions. Our colleague said yesterday that the unemployment rate in Cape Breton is now 22 per cent. What new strategy will the Minister of Finance propose to help the workers and businesses of those regions?


Geoff Wilson: Mr. Speaker, if the Hon. Member had not prepared that question before the House sat, he probably would not have asked it because 1 answered that question as part of my responses to his first and second questions.
1 should point out to the Hon. Member that the unemployment rate is down in every province of the country compared to the rate this time last year. That is very real progress. It is down in every province of Canada, with the exception of Prince Edward Island where it is marginally up since we came into office in September of 1984.
Again, there has been very clear progress. As I have indicated to the Hon. Member on many occasions in the past, we have generated an over-all economic policy which has resulted in Canada being first in economic growth, first in employment growth and first in productivity performance of the major industrialized countries. Because we have that growth and that economic performance, we have been able to provide the resources through the Atlantic Opportunities Agency, the equalization programs, the Atlantic enterprise purchasing program, the Newfoundland Development Accord and the various highways agreements. That is the clear message that people in other parts of the country are understanding, contrary to the understanding of the Hon. Member.


CANADA-UNITED STATES FREE TRADE AGREEMENT- COMPLIANCE BY MANITOBA PROVINCE
Hon. Lloyd Axworthy (Winnipeg-Fort Garry):: Mr. Speaker, I have a question for the Deputy Prime Minister. On Wednesday I asked the Prime Minister a question concerning the U.S. administration's threat to demand compensation or redress if there was not full compliance by the provinces with the continental trade program. Today we have word that the Province of Manitoba will now introduce legislation that will void parts of the agreement, and the Province of Ontario is prepared to do the same.
The Government cannot duck the question any longer. The Government has put itself in a constitutional box between the provinces and the U.S. administration. It is heading toward a constitutional crisis. The Government must take a position on this matter and Parliament deserves an answer.
What is the Government going to do? How is it going to respond to the U.S. administration's demand that it pay compensation if provinces do not comply, because those provinces have no intention of complying?


Hon. Don Mazankowski (Deputy Prime Minister, President of the Privy Council and President of the Treasury Board):: Mr. Speaker, I think the Prime Minister dealt with that question quite fully. As far as the current issue he has raised is concerned, I want to remind the Hon. Member, as he knows, that never before in the history of an international treaty has there been so much consultation and dialogue between the two levels of government. Right from the very beginning this issue was the subject of numerous First Ministers' Conferences and bilateral meetings. Generally speaking, the provinces were indeed involved in this in every respect.
I think the Hon. Member should know very well that since the free trade arrangement will be good for all regions of the country and good for all the provinces, rather than joining forces with the provinces which are expressing reluctance with certain elements of it, he should show some leadership at the national level and should encourage all provinces to become party to this agreement. He should do that rather than getting on the bandwagon trying to destroy what is a good agreement for all Canadians and a good agreement for every region of the country.


THE CONSTITUTION-GOVERNMENT POSITION
Lloyd Axworthy: Mr. Speaker, that kind of answer simply will not wash any more. The fact is that the Government has put this country in a position of being subject to major intimidation by the United States administration which is demanding compensation or redress. In other words, the Americans will up the ante on the agreement. Several provinces say that they cannot go along with this and, while there may have been consultations, there was no approval.
When will the Government clearly spell out how it intends to deal with the dilemma it finds itself in with the constitutional crisis we are heading for and the major revisions of the agreement that will be required by the Americans under the circumstances if there is no provincial compliance? That is a very serious question and it deserves a proper answer, not the kind of ducking and weaving we have had so far.


Donald Frank Mazankowski: Mr. Speaker, there is no ducking and weaving. The Minister of Justice and the Prime Minister have indicated very fully that Parliament has the authority to exercise its power and it will do so consistent with tradition and convention.
I find it rather strange that the Hon. Member always tends to sidle up to the provincial Government of Manitoba. I suppose that puts him in favour of the increased insurance
February 12, 1988

premiums, the payroll tax, the income tax and all those other unpopular measures the NDP Government of Manitoba is engaged in. If you're with them, join them!


TAX REFORM
Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, 1 have a question for the Minister of Finance about fairness in taxation. The Minister has acknowledged that some 60,000 profitable Canadian corporations will pay no federal tax this year after his tax reform.
Is he aware that in 1986 companies like Hees International with profits of $170 million, Brascan with profits of $187 million, and Alcan Aluminum with profits of $220 million, paid no corporate tax? Is he aware that in 1987 companies like Cadillac-Fairview with profits of $95 million and Bramalea with profits of $51 million paid no federal corporate tax?
Why will companies like this continue to get a free ride after 1988? Why will the Minister not bring a minimum corporate tax into force?


Geoff Wilson: Mr. Speaker, the Hon. Member is on the finance committee, and he is well aware that corporate tax reform addresses many of these problems which resulted in profitable companies not paying income tax. That is being dealt with in stage one of tax reform and I know the Hon. Member is going to give us his full support to get that tax reform provision through. The result will be that $5 billion in additional taxes will be paid by corporations over the next five years.


CORPORATIONS-IMPOSITION OF MINIMUM TAX-GOVERNMENT POSITION
Michael Morris Cassidy: Mr. Speaker, my supplementary is directed to the same Minister.
The Minister says his tax reform will increase corporate tax revenue. Does he realize that in the United States, tax reform has resulted in an increase in corporate tax revenue which, in relative terms, is twice the increase we will see in Canada, and that this is largely due to the fact that the United States has a minimum corporate tax?
Why is the Government reluctant to introduce a minimum corporate tax in Canada, which would introduce additional revenue that could be used in new measures to create jobs and eliminate regional disparity in Canada?
Oral Questions


Geoff Wilson: Mr. Speaker, let me give the Hon. Member some examples of the type of company that would be caught by the type of minimum tax he is proposing.
First would be a medium-sized research and development firm, say in Manitoba, that gets tax credits for investing in research and development to help improve its competitive position. Second, is a start-up business in Cape Breton that takes advantage of the Cape Breton investment tax credit in an area of the country that the Hon. Member is quite aware suffers from high levels of unemployment. A third example would be a resource-based company in northern Ontario which receives tax advantages for further developing its resource base and enhancing growth, again in a region of the country suffering from higher unemployment. The fourth example I would give him is that of a small manufacturer in British Columbia which has reduced its taxes, say in 1986, because actual, real losses incurred in previous years.
If the Hon. Member follows his thinking through he will put many of those companies out of business, costing many jobs in regions of the country which, out of the other side of his mouth, he says he is in favour of supporting.


Michael Morris Cassidy: Mr. Speaker, I listened carefully to the Minister but 1 do not recognize in his list companies like Hudson's Bay, Cadillac-Fairview, Seco-Camp, Repap Enterprises, Wardair, or Total Petroleum. Those are not companies in the categories the Minister has talked about because they are making hundreds of millions of dollars in profits and not paying any tax at all.


STATISTICS CANADA REPORT-EFFECTIVE RATE OF CORPORATE TAX
Michael Morris Cassidy: Mr. Speaker, is the Minister aware that just last fall Statistics Canada produced a report which indicated that major profitable corporations in Canada had an effective tax rate of only 11.5 per cent, half the rate paid by average Canadians in their personal income tax? Average Canadians pay tax every year and these corporations get a free ride. StatsCan judged these large corporations would see only a "modest" change through the White Paper.
Why will the Minister not take advantage of the revenues which the American tax system collects by having a minimum tax on corporate profits so that they pay every year?


Geoff Wilson: Mr. Speaker, I listened carefully to the companies that he referred to and I think that we have dealt with each case, either in tax reform or through other measures which we have taken to close loopholes in the tax system that allowed this to happen, whether it was real estate companies, tax loss trading through limited partnerships, or investment tax credits that companies were able to take advantage of in the past. In each of these we have dealt with the cause of the problem, not just applied a band-

February 12, 1988
Oral Questions
aid solution as he is proposing. We have caused a change in the nature of the corporate tax system that will deal with it in a fundamental way. That is surely the right way to deal with the matter.


THE ADMINISTRATION
Brian Vincent Tobin: Mr. Speaker, it is now five days since the Assistant Deputy Registrar General, Jean-Pierre Kingsley, without any explanation whatsoever, issued a statement exempting political loans or advances from provisions of the conflict of interest guidelines. Mr. Kingsley, who is ultimately accountable to the Prime Minister and not Parliament, has refused to give either the public or Parliament any rationale, based on a reading of the conflict code, for Monday's, to put it politely, amazing statement.
Why is it that Elections Canada officials, in the case of the Minister of Energy, are being threatened with dismissal by the Hon. Member for Durham-Northumberland unless more information is forthcoming, yet in the case of the Prime Minister and Mr. Kingsley, the Government is perfectly content to leave Monday's statement totally unexplained? Can the Deputy Prime Minister explain that double standard?


Donald Frank Mazankowski: Mr. Speaker, the Hon. Member persists in engaging in a witch-hunt. Those questions have been answered fully by the Prime Minister on a number of occasions and I have nothing further to add.


REQUEST THAT OFFICIAL BE DIRECTED TO PROVIDE EXPLANATION
Brian Vincent Tobin: Mr. Speaker, the Hon. Member for Durham-Northumberland spoke to the press yesterday, it is well publicized, threatening officials of Elections Canada with dismissal, saying they will be looking for jobs unless more information is forthcoming on the decision they took. Surely it is reasonable for Members of Parliament to expect that same information with respect to a decision affecting the Prime Minister.
Mr. Kingsley so far has refused me personally, reporters and others, any additional information. Because he is a civil servant accountable to the Prime Minister, not an independent officer of the House, surely the Prime Minister would direct Mr. Kingsley to provide a rationale, based on a reading of the conflict code, for the statement he made on Monday.
Will the Deputy Prime Minister acknowledge that fact, realize this issue will not go away, and take action this
afternoon so that all of us may know why such an extraordinary flip-flop occurred from Friday to Monday, and which sections of the code we can refer to in order to understand the amazing statement read on Monday by the Prime Minister?


Donald Frank Mazankowski: Mr. Speaker, if the Hon. Member wants to take issue with something the Hon. Member for Durham-Northumberland may or may not have said, he can certainly do so. He knows the proper course of action he can follow.


PRIME MINISTER'S POSITION
Mr. Ian Waddell (Vancouver-Kingsway):: Mr. Speaker, on the same matter, Section 38 of the code reads: "Where a public office holder does not comply with the code the office holder is subject to such appropriate measures as may be determined by the designated authority, including, where applicable, discharge or termination of the appointment".
Is it not a fact that the designated authority in this case is the Prime Minister himself? Therefore, can the Deputy Prime Minister explain to us how the Prime Minister gets out of this conflict where in fact he is the judge and jury on his alleged violation of his own code?
Hon. Don Mazankowski (Deputy Prime Minister, President of the Privy Council and President of the Treasury
Board): Mr. Speaker, Hon. Members opposite want to prolong this issue. It has been debated inside and outside the House for some time. The statement by Jean-Pierre Kingsley, Assistant Deputy Registrar General, concerning the Prime Minister's arrangement with the PC Canada Fund, clearly speaks for itself. I ask the Hon. Member to reread it. He has made a full explanation. It is here and can be tabled in the House, and I would be very glad to table it. I am not sure what more they want.


Ian Gardiner Waddell: Mr. Speaker, the Deputy Prime Minister knows full well that that official is under control of the Prime Minister.


PROFESSOR S SUGGESTION THAT PRIME MINISTER RESIGN
Ian Gardiner Waddell: Mr. Speaker, writing in The Globe and Mail today Professor lan Greene, who specializes in constitutional law and public administration, suggested that the Prime Minister should resign and that there should be an independent investigation, perhaps by a judge. It is very serious.
Has the Government considered the possibility of having an independent investigation with regard to the Prime Minister's loan as opposed to the loan of the former Minister of Supply and Services?


Donald Frank Mazankowski: Mr. Speaker, I am not going
February 12, 1988

to comment on any hypothetical conclusion that may be arrived at by an instant expert. I do not know what his qualifications are. Perhaps he does not know the difference between a service club and a political Party. If that is the case, I am not surprised at some of the conclusions he has arrived at.


PUBLIC SERVICE
Dave Nickerson: Mr. Speaker, my question is addressed to the President of Treasury Board. Frequent flier plans offered by competitive airlines give out free tickets and even hard cash. In the case of public servants travelling at taxpayers' expense benefits should accrue not to the individual but to the Crown. What is the Government's policy on this matter? What system has been put in place to ensure compliance?


Donald Frank Mazankowski: Mr. Speaker, yes indeed there is a policy in existence. Employees have been made aware that they may not accept benefits arising from the performance of their duties which are offered by third parties. When employees are offered benefits in the form of cash, equivalent vouchers, or discount coupons as a reward for patronage of a particular carrier or hotel, these vouchers shall be remitted to the Department with the employees' travel claims.


DEVELOPMENT OF MONTREAL PORT-GOVERNMENT POSITION
Mr. Jean-Claude Malepart (Montreal-Sainte-Marie):: Mr. Speaker, in the absence of the Minister of State (Transport) and the Minister of Transport, my question is directed to the Deputy Prime Minister.
The executive of the Port of Montreal is about to announce a program for the expansion of the Port of Montreal, and we in the Liberal Party fully support this program. However, a number of socio-economic groups in Greater Montreal would like to have more information and more openness with respect to this expansion project, not only on the financial side, but also on environmental issues.
Could the Deputy Prime Minister give the House the assurance that all socio-economic groups in Greater Montreal will have access to all the documents used to prepare this proposal? Furthermore, when the announcement is made in the next few weeks, could the people be consulted before the
Oral Questions
decision is finalized, to ensure that the program provides sufficient safeguards for the people of Montreal?


Mr. Blaine A. Thacker (Lethbridge-Foothills):: Mr. Speaker, 1 would be happy to refer this question to the Minister because I am not up to the moment on it. Had the Member given me some prior advice I would have been happy to have dug out the information for him. I will bring it to the attention of the Minister and we will get back to the Member as quickly as possible.


OLD PORT OF MONTREAL-QUERY WHY PROVISION OF FUNDS DELAYED
Jean-Claude Malépart: 
Hon. Stewart Mclnnes (Minister of Public Works):: Mr. Speaker, the Old Port of Montreal has been involved in a consultative process for the past two years with regard to questions relative to the environment and long-range planning for it. There are three levels of government involved; the provincial and the municipal as well as the federal. Discussions are ongoing in this regard and hopefully some conclusion will follow reasonably soon.


THE BUDGET
Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, my question is directed to the Minister of Finance and is with regard to what the Budget is not doing for child care. The regressive Budget doubles the child care expense deduction for higher income working parents but does nothing for lower income parents, students, and single moms who pay no taxes at all and need child care desperately.
Is the Minister's idea of tax fairness to discriminate against the lower income parents who can least afford child care with its very high fees? Would it not have been much fairer to take

February 12, 1988
Oral Questions
the $210 million that he is losing this year on tax revenues in the child care sector and allocate it for direct funding to good quality child care services so that all parents can benefit and fees will be brought down?


Geoff Wilson: Mr. Speaker, the Hon. Member's question illustrates a difference in philosophy between herself and the Government which has provided, through the increase in the refundable child tax credit, for low income families which have children under the age of six. We have provided, through the increase in funding, for the development of 200,000 additional quality care spaces.


Margaret Anne Mitchell: You have not.


Michael Holcombe Wilson: That will come in legislation to be presented to this House shortly following discussions with the provinces.
I believe that the program put forward on behalf of the Government by the Minister of National Health and Welfare is a much more balanced program and provides a much broader response to the needs of Canadian working women and other women than would the more narrow approach which the Hon. Member would follow.


REQUEST FOR ADDITIONAL FUNDING
Margaret Anne Mitchell: Mr. Speaker, this shows how little the Minister and the Government know about child care. One hundred dollars to a parent in the home is not generous and there is no way he can think it is.
We need funds for child care. There is nothing in this Budget which responds to the three-year-old promise of the Prime Minister that the Government would help expand quality affordable child care services. Why is there nothing in the Budget for direct services?
I might also mention that the 200,000 new spaces that are supposed to be provided over seven years is only the amount of increase that would have happened had they done nothing.


Geoff Wilson: Mr. Speaker, that may be the Hon. Member's opinion.


Margaret Anne Mitchell: It's research.


Michael Holcombe Wilson: It is not the opinion of a number of other people in the child care field.
We have put forward a child care program which amounts to $5.5 billion-


Margaret Anne Mitchell: Amounts to peanuts.


Michael Holcombe Wilson: -over a seven-year period. This illustrates again a fundamental difference between the New Democratic Party and the Conservative Government.


Margaret Anne Mitchell: It certainly does.


Michael Holcombe Wilson: We have said that this is a child care policy which the country can afford. The Hon. Member said that $5.5 billion is peanuts. We on this side of the House do not believe that $5.5 billion is peanuts.
That demonstrates that the Hon. Member would have the deficit go right up through the roof and pay no attention to the impact which that would have on interest rates, and therefore on jobs and on the ability of the same working women about whom she is so concerned to gain a job. That is the difference between New Democratic Party members, who are spendthrifts and have no interest at all in controlling spending, and us.


CANADIAN BROADCASTING CORPORATION
Robert Phillip Kaplan: Mr. Speaker, in the absence of the Minister responsible for the Canadian Broadcasting Corporation I would like to direct a question to the Minister of Public Works. He knows, or should know, how seriously the Canadian Broadcasting Corporation needs the new broadcasting centre in the city of Toronto. This is a project which was launched by the former Government and relaunched by this Government. There are now rumours that the project may not be proceeding.
Would the Minister assure us that the project on Wellington Street in Toronto, which was relaunched by the Government, is proceeding and will proceed?


Stewart Donald McInnes: Mr. Speaker, 1 would like to assure the Hon. Member that this matter is receiving all the attention it deserves. This is a very substantial undertaking and it deserves the full consideration which is now being given to it.


REQUEST THAT PROJECT BE CONTINUED
Robert Phillip Kaplan: Mr. Speaker, that is not very reassuring from a Government which has socked it to Toronto and socked it to the CBC in a number of ways. I would appreciate it if, rather than some vague statement, the Minister would say that the project, which the Government has been supporting until recently, will continue and will proceed.


Stewart Donald McInnes: Mr. Speaker, I do not know what the Hon. Member refers to. There has been no indication of any change in the attitude of the Government.
February 12, 1988


CANADA-UNITED STATES FREE TRADE AGREEMENT-POWERS OF PROVINCE TO PASS LAWS
Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, my question is directed to the Deputy Prime Minister. I want to return to what we consider a serious confrontation coming between the provinces and the federal Government over this trade deal. Despite the pressure from the U.S. spokesmen this week, will the Deputy Prime Minister confirm that Manitoba has the right to pass laws in its jurisdiction with respect to areas such as recreational land and others until such time as the trade deal is in effect in 1989?


Donald Frank Mazankowski: Mr. Speaker, the Hon. Member is a bit behind the times when he talks about confrontation between the federal Government and the provinces. That was an era of the past, during the days of the Liberal administration when they spent more time fighting with the provinces than working and cooperating with them as this Government has done.
The Hon. Member knows that there is nothing in the free trade agreement that takes away authority from the provincial Government to pass legislation dealing with property and civil rights.


Steven W. Langdon: 1 hope that actually says to the Province of Manitoba that it is quite right for it to proceed as it wishes.


PROVINCIAL JURISDICTION
Steven W. Langdon: Mr. Speaker, instead of dealing with generalities, will the Deputy Prime Minister stand in the House and make it very clear that the points that Manitoba wishes to put forward to protect its people are perfectly proper and within its jurisdiction?


Donald Frank Mazankowski: Mr. Speaker, if it is the position of the provincial Government of Manitoba to turn away investment dollars that bring in jobs, if it wants to increase taxes, impose payroll taxes, and increase automobile insurance and all those things that deter investment and business activity, it is within its God given right to do so.
Oral Questions


THE BUDGET
Gabriel Fontaine: Mr. Speaker, my question is directed to the Minister of Finance and has to do with the excellent economic message he conveyed to Canadians for the fourth time last Wednesday. He confirmed in his message that nine out of ten elderly Canadians will no longer pay taxes. He confirmed in his message that our Government will continue to assume its financial responsibilities with respect to senior citizens. Mr. Speaker, I should like to know how he can reconcile our firm commitments with the Opposition's demagogic allegations, particularly those of the Hon. Member for Laval-des-Rapides.


Geoff Wilson: Mr. Speaker, I think it is very important for Canadians to understand that the tax reform will mean lower taxes for nine out of ten individuals aged 65 or more. For example, a single person with an income of $25,000 will pay $435 less in taxes. For a couple aged 65 or more and with an income of $25,000 the tax reduction will amount to $665.
In addition, Mr. Speaker, another policy of the Canadian Government will have a major impact, and I am referring to pension plans. The Canada Pension Plan, RRSPs and the old age security regulations have been improved so that Canadians will be better prepared for retirement.



David Berger: Mr. Speaker, my question is also directed to the Minister of Finance. The Minister will know that, speaking in front of the Montreal Chamber of Commerce, in 1984, the Prime Minister promised to double the national scientific effort within his first term. Now, figures from Statistics Canada are not showing any increase but rather a slackening in research and development. My question to the Minister is this: Why has he not taken advantage of his recent budget to stimulate research and development in the private sector and to repair the harm his efforts have caused up to now?


Geoff Wilson: Mr. Speaker, let me make a few comments about that. First, in January the Prime Minister announced $1.3 billion in additional spending for research and development in order to encourage the development of excellence throughout Canada, with additional moneys being spent on science and technology.

February 12, 1988
Oral Questions
Second, I make specific reference to that, as well as to the fact that Canadian companies have the best tax regime of the major industrialized countries. That is very clear. I think the Hon. Member is well aware of that.
Third, the Government has increased its funding for research and development. I believe the current level is in the order of $4.2 billion of direct spending on research and development. We are committed to research and development and we have put our money where our mouth is.


David Berger: Those are hollow words from the Minister of Finance.


LEVEL OF SPENDING ON RESEARCH AND DEVELOPMENT
David Berger: Mr. Speaker, I suggest to the Minister that if research and development spending had gone up to 2 per cent of Gross National Product, for instance, it would have appeared in red letters in his Budget and we would have heard wild applause from the Tory backbenches.
Research and development spending has not gone up, but declined as a percentage of GNP. Does the Minister not think that the decline in R and D spending is a matter of concern to this country?


Geoff Wilson: Mr. Speaker, the Government has indicated where its priorities lie by increasing the amount of funding-


David Berger: The bottom line.


Michael Holcombe Wilson: The Member is waving some papers at me. I do not know what are on those papers-


David Berger: The bottom line.


Michael Holcombe Wilson: Let me say that it takes two to tango. It is important for the private sector to respond, and one of the primary objectives of the conference on research and development which the Prime Minister chaired in January in Toronto was to encourage a change in attitude on the part of Canadians in general and on the part of Canadian companies.
The Hon. Member referred to hollow words. They were facts, which I will give to him again. This Government has increased total spending on science and technology by 6 per cent. The granting council budget will be $1 billion higher than the previously approved levels. As I indicated to him, the tax regime in Canada is better than any of the other major industrialized countries.
We are clearly indicating through our actions, through our words, and through the leadership that the Prime Minister is providing, that science and technology are a very important part of the future of our country.


PROVISION OF MONEYS TO GRANTING COUNCILS
Howard Douglas McCurdy: Mr. Speaker, my question is also addressed to the Minister of Finance. The fact is that the rate of expenditure on science as a percentage of GNP has fallen and real expenditures by the Government have fallen. The words of the Government are never clear. We had the Prime Minister and the Budget indicating a $1.3 billion increase in R and D expenditures over the next five years, much of which, in the Prime Minister's words and in the Budget, were specified for centres of excellence and merit scholarships.
The Minister of State for Science and Technology now says that some portion of that will go for the granting councils. Will the Minister of Finance tell us if money is to go from that $1.3 billion to the granting councils? And will it go to the basic budget? Or will $400 million of it go into the overruns for the space program?


Geoff Wilson: Mr. Speaker, the answer to those questions will come in the fullness of time. We have indicated the $1.3 billion of additional spending that will be dedicated to science and technology. 1 will not go through the litany of other indications of the commitment of this Government to science and technology, but when the decisions have been taken for the specific recipients of the $1.3 billion, the Hon. Member will be the first to know if he is in the House when an announcement is made.


LORTIE REPORT RECOMMENDATIONS
Howard Douglas McCurdy: Mr. Speaker, that litany will be very short if we left out fora, general discussions and rhetoric. The scientific community is waiting for an answer from the Government. Will the Government respond to the Lortie Report and fulfil the promise of the Minister of State for Science and Technology and put money into the granting councils as the Prime Minister's own advisory council demands that it do?


Geoff Wilson: Well, Mr. Speaker, I indicated just a few minutes ago with respect to the granting councils that the budget will be $1 billion higher-


Howard Douglas McCurdy: That's not an answer.


Michael Holcombe Wilson: -than over the previously approved levels. Clearly that indicates what this Government has done and what it intends to do with the commitment it has made to science and technology.


David Berger: What is the bottom line?


Michael Holcombe Wilson: clearly getting leadership that was totally lacking from the previous Government-


David Berger: What is the bottom line?


Michael Holcombe Wilson: -and was indicated by where the Liberal Party stood-


Howard Douglas McCurdy: Where is the money?


Michael Holcombe Wilson: -as well as the New
Democratic Party-


Howard Douglas McCurdy: Where is the money?


Michael Holcombe Wilson: -on thwarting a major initiative to encourage science and technology in the pharmaceutical Bill. Both Parties voted against that. Both Parties voted against 4,500 jobs for science and technology. Both Parties voted against the $1.3 billion in additional funding from the private sector.


Mr. Deputy Speaker:: There will be one question from the Hon. Member for Algoma and one question from the Hon. Member for Yorkton-Melville.


FINANCE
Mr. Maurice Foster (Algoma):: Mr. Speaker, my question is directed to the Minister of Finance as well. The Minister knows his Budget contains no new assistance for regional development even though those regions of our country, without exception, the resource regions, have higher unemployment today than they did in 1981 after six years of growth in the country generally.
Will the Minister reinstate the earned depletion allowance for mining that has provided hundreds of millions of dollars for mineral exploration and development, as well as thousands of jobs, in those resource rich areas of our country which are still suffering from high unemployment? Will the Minister reconsider, change, and bring back that incentive for mineral exploration and development?


Geoff Wilson: Mr. Speaker, I cannot let go by some of the totally misleading statements made by the Hon. Member in his preamble. This Government has increased its funding on research and development from $490 million when we came into office in 1984-85-


Maurice Brydon Foster: Exploration and development in the mining areas.
Oral Questions


Michael Holcombe Wilson: The Hon. Member is not going to get away with his interjections. He talked about regional development in total.
We have increased the budget from $490 million to something over $800 million, and that is before the Atlantic Canada Opportunities Program, the Western Diversification Program, the Northern Ontario program and the Quebec program, take hold. In addition, in 1988-89 the Member will see in the Estimates that are coming up in the next couple of weeks that there is a further commitment to research and development there.
As it relates to the flow-through shares, we have responded and improved the provisions for flow-through shares from what had been announced in the June tax reform statement, when 1 made my statement on the position of the Government on tax reform in December. We have improved the regime for flow-through shares. 1 have indicated to my colleague, the Hon. Member for Timiskaming, that I am prepared to meet with people from the industry, and arrangements are being made for that right now.
I do want to caution the Hon. Member that one of the key reasons for the concerns of people who have been recipients of the benefits of flow-through shares is the state of the securities markets today. There has been a major drop in equity financing. That has affected flow-through shares as well as all other forms of equity financing.


Mr. Deputy Speaker:: The last question, the Hon. Member for Yorkton-Melville.


EXTERNAL AFFAIRS
Lorne Edmund Nystrom: Mr. Speaker, my question is directed to the Deputy Prime Minister. I am sure he is aware that yesterday the Secretary of State for External Affairs announced that some $20,000 would go out to each of the nine victims of a CIA-funded brainwashing experiment that took place in the Allan Memorial Institute in Montreal in the late 1950s and 1960s.
In light of the fact that in May, 1986, a report by Mr. Cooper, who is a former Conservative Member of Parliament, recommended that the federal Government make an ex gratia payment of $100,000 to each of the victims, why did the federal Government send out only $20,000 to each of those people?
I am sure the $20,000 is appreciated. However, in light of the fact that $100,000 was recommended by the Minister's own report, why is $20,000 being sent out instead of $100,000? Or do we consider the $20,000 as only the first installment?

February 12, 1988
Motions


Donald Frank Mazankowski: Mr. Speaker, this assistance is being provided to help these individuals defray their expensive legal costs. 1 find it rather strange that the New Democratic Party would take issue with this-


Lorne Edmund Nystrom: No, no!


Donald Frank Mazankowski: -when it was its own Leader that asked that a financial contribution to defray the huge legal costs be made. He certainly did not ask for an exorbitant amount but simply asked that consideration be given. The Leader of the New Democratic Party himself asked for precisely the kind of assistance we are now offering. I find it rather strange that the Hon. Member would take issue with it. This was done with the full knowledge that this is a very difficult situation. We hope it will help in some way to assist these individuals in defraying their huge legal expenses.



ROUTINE PROCEEDINGS

[Stage Direction]
[ Translation]

Hon. Doug Lewis (Minister of State and Minister of State (Treasury Board)):: Mr. Speaker, pursuant to Standing Order 106(8), I have the honour to table, in both official languages, the Government's response to petitions Nos. 332-3703 to 3323708 inclusive, 332-3721 to 332-3728 inclusive, 332-3754 to 332-3761 inclusive, 332-3783 to 332-3786 inclusive and 3323800.



THE CABINET


Donald Frank Mazankowski: Mr. Speaker, last week I undertook to provide information to the House pertinent to the federal Government's contracts involving companies associated with Mr. Laberge. I am today prepared to table the preliminary analysis of the information which has been gathered to date, in both official languages.



CANADIAN INTERNATIONAL TRADE TRIBUNAL ACT


Stewart Donald McInnes: that Bill C-110, an Act to establish the Canadian International Trade Tribunal and to amend or repeal other Acts in consequence thereof, be now read the first time and be printed.


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


Stewart Donald McInnes: that Bill C- 111, an Act to amend the National Housing Act and the Canada Mortgage and Housing Corporation Act and to repeal certain enactments in consequence thereof, be now read the first time and be printed.


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


Hon. Charles Mayer (Minister of State (Grains and Oilseeds)) moved: for leave to introduce Bill C-112, an Act to amend the Canada Grain Act and other Acts in consequence thereof.


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


Some Hon. Members:: Agreed.


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


Douglas Grinslade Lewis: Mr. Speaker, there have been discussions among the Parties and I think Your Honour would find that there would be unanimous consent for the following motions. I

February 12, 1988

Petitions
will deal with them one at a time. They are to be placed immediately and to be voted on.
The first motion is as follows. I move:
That the Standing Committee on Fisheries and Oceans be authorized to travel to British Columbia from February 22 to 26, 1988 inclusive for the purpose of their ongoing study of the condition of aquaculture in Canada, and that the necessary staff accompany the committee.


Mr. Deputy Speaker:: Does the Hon. Minister of State and Minister of State (Treasury Board) (Mr. Lewis) have the unanimous consent of the House to move the motion?


Some Hon. Members:: Agreed.


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


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

['Agreed.']
Douglas Grinslade Lewis: Mr. Speaker, I have also had consultation with the Parties with respect to the second motion. I move:
That the Standing Committee on Justice and Solicitor General, and necessary staff, be authorized to travel within Canada for the purpose of continuing their ongoing study of sentencing, parole and correctional facilities, and visiting correctional facilities and holding public hearings in the following regions and during the following weeks:
(i)	British Columbia-week of February 28, 1988
(ii)	Toronto - week of March 20, 1988
(iii)	Prairie Provinces-week of April 17, 1988
(iv)	Quebec-week of May 1, 1988
(v)	Atlantic Provinces-week of June 5, 1988


Mr. Deputy Speaker:: Does the Hon. Minister of State and Minister of State (Treasury Board) (Mr. Lewis) have the unanimous consent of the House to move the motion?


Some Hon. Members:: Agreed.


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


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Audrey Marlene McLaughlin: Mr. Speaker, 1 have the honour and duty under Standing Order 106 to present petitions signed by 150 residents of Eskimo Point, Rankin Inlet, Spence Bay, and Fort Simpson, Northwest Territories.
The petitioners are concerned about the possible detrimental environmental effects and the contribution to nuclear proliferation that might be occasioned by flying plutonium over northern Canadian territory as is proposed in the U.S.-Japan agreement.
Therefore, the petitioners pray and call upon the Parliament of Canada to recognize the dangers of such flights and to say no to the transport of plutonium over northern Canadian territory.


Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, it is my privilege and responsibility to present a petition duly certified.
It is from a number of Canadians who point out that the very fabric of Canadian sovereignty is threatened by the proposed Mulroney-Reagan trade deal, that the Government has no mandate to negotiate a deal, such as this with the United States, that the Mulroney-Reagan trade deal would reduce Canada's ability to plan the economic, social and cultural programs that we need, and that the deal would integrate Canada further into the North American defence industrial base.
Therefore, they ask the House of Commons to ensure that a national debate take place on the trade deal and that this debate results in a national general election before the agreement is finalized.


Daniel James Macdonnell Heap: I have a petition duly certified by the Clerk of Petitions. It is from Canadians living in Toronto and in Halifax.
They are concerned with the trade deal negotiated by the Prime Minister (Mr. Mulroney) with the President of the United States because the Prime Minister had no mandate for that deal. In fact, he even promised that Canadian sovereignty would not be compromised. Yet he has signed a deal that weakens the economic and political sovereignty of Canada by removing the power of the Canadian Government effectively to control foreign ownership, or to develop Canadian energy resources in the best interests of Canadians, or to equalize opportunities between regions. It also fails to secure for Canadians access to the U.S. market which was the key objective in the stated negotiations.

February 12, 1988
Questions on the Order Paper
Therefore these people call upon Parliament to dissolve, to allow the people of Canada the opportunity to accept or reject the proposed free trade agreement during a national general election.


Geoff Wilson: Mr. Speaker, I have the honour to present a number of petitions on two different topics. The first relates to Bill C-54, the antipornography legislation. It is from a number of residents of Robsart, Consul and Swift Current, Saskatchewan.
The second petition is from a number of residents of Swift Current, Saskatchewan.
They express their concern that pressures exerted by various permissive minority groups may cause Government to waterdown and weaken this legislation. The petitioners support the Bill which will make it illegal to manufacture, import, sell or rent pornographic material as defined in the Bill.
They call upon Government to pass Bill C-54 without dilution in the belief that the Bill gives recognition to the inherent dignity of individuals, particularly women and young people.


Geoff Wilson: Mr. Speaker, I have a further petition from a number of residents of Eastend, Saskatchewan. They note that farmers and fishermen for many years have enjoyed the right to block average their income and that the Minister of Finance on December 16, 1987 indicated his intention to eliminate block averaging.
Therefore, the petitioners humbly pray and call upon Parliament to take the necessary steps to retain block averaging for farmers and fishermen as recommended by the Standing Committee on Finance and Economic Affairs in its report on the White Paper on Tax Reform, Stage I.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Douglas Grinslade Lewis: Mr. Speaker, I ask that all the questions on the Order Paper be allowed to stand.


Mr. Deputy Speaker:: Shall all questions be allowed to stand?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson (Etobicoke Centre) that Bill C-109, an Act to provide borrowing authority, be read the second time and referred to a legislative committee.
Mr. Deputy Speaker:: The Hon. Member for Yukon (Ms. McLaughlin) has the floor.


Audrey Marlene McLaughlin: Mr. Speaker, I am pleased to continue my comments on Bill C-109. Before Question Period I was discussing the idea that the necessity for such a large borrowing Bill would not have arisen if there were some indication in the Minister's Budget that there would be innovative measures to deal with regional disparity. For example, the Minister did not mention in his Budget speech that the Government has cut back $3 billion in regional development since 1984.
Looking at the current Budget from the perspective of regional development, which I am interested in because of the area 1 represent, it indicates that there will be $3 million cut in non-statutory programs. It is not defined in the Budget just exactly what these non-statutory programs will be. The nonstatutory programs deal with the operation costs of federal Government subsidies to industry, payments to Crown corporations, capital spending, grants and contributions. This leaves the field wide open as to where the Government might decide to make these cuts.
My concern is that because we do not have the Estimates and we do not have any specifics about where these cuts will be. certain areas of the country, in particular the regions to the east, the north and the west which are most vulnerable, could be seriously affected by these cuts in non-statutory programs. Vulnerable is defined as those with the least votes in this instance.
As an example I mention a particular program in the Yukon and the Northwest Territories that has led to increased economic activity there. I refer to the economic development agreement with such sub-agreements as the one that deals with tourism. This has helped the small lodge owner to increase and to develop their businesses. It has enabled them to do some advertising to bring in the tourist dollars. This is but one example of the economic development agreement. These are non-statutory programs and it is therefore of great concern to us that these not be programs from which the Government will choose to cut. I refer to programs which stimulate investment in development in the more isolated regions of the country. These are vulnerable programs and give us great concern. They are the ones easiest to cut because of the fewer number of voters.
February 12, 1988

I would also point to programs oriented to the aboriginal people, the Native Economic Development Program and the special ERDA which have helped people in those aboriginal communities to develop small business and become selfsufficient, which should be an objective of all of us. We will be looking closely to see if the cuts in the non-statutory programs do in fact increase regional disparity, which is a very important issue for all of us across Canada.
I mentioned earlier in my remarks that it is my view and my Party's view that in presenting this Budget there were places where the Government could have looked to raise revenues. We have heard much about the increase in the corporate tax, and the corporations that do not pay taxes. One area where the Government systematically looks to raise revenues is from the pocket of the ordinary taxpayer. The Government has projected that this will be done again with the one cent increase on gasoline. This seems to be a repetitive theme, and that is part of the problem with this Budget and why under this borrowing Bill we are asked to approve such a large sum. All of the ideas of the Government are repetitive; there is nothing innovative or new.
For example, there was an increase in the tax on fuel in November, 1984 which amounted to almost 10 cents a gallon at the pumps. In the May, 1985 Budget there was an increase of two cents per litre or nine cents per gallon at the pumps. On June 27, 1985 there was another increase of one cent per litre on gasoline. In February, 1987 there was another one cent per litre increase, and in February, 1988 another one cent per litre. It seems to me that the Government is in a rut, and there must be other ways that I will suggest where that money could be raised.
I wish to say a few words about how this one cent per litre on gasoline affects the more isolated regions, regions like my own, the Yukon, the Northwest Territories, northern parts of the provinces, and the Atlantic provinces. That is where this type of tax hurts.
For example, in the far north our costs are very high. Our cost of living is anywhere from 30 to 50 per cent above that of Edmonton. An increase in fuel prices, even excluding diesel fuel, which I understand is excluded, really affects small business, or the person who has to make deliveries around the territory, where he or she may travel 1,000 miles to make a delivery. It is a serious problem for us. Every increase like this to the cost of living for the northerner is an exponential increase compared to that for people who live south of 60. It is still tough on them, but for us it is doubly tough.
Another aspect of the fuel tax is the thinking behind which the Government decides to raise revenue. Perhaps, as much as anything, this sums up the philosophy of the Government, and it is something that Canadians taxpayers will want to take note of. This one cent per litre tax will apply to aviation gasoline for propeller aircraft, for example, the Twin Otter, and the small aircraft used by bush pilots and charter companies, not only in
Borrowing Authority
the North, but in many small areas throughout Canada. However, the tax will not apply to jet fuel. Everyone knows that the revenues that could have been raised from jet fuel would be far in excess of those raised from taxing the small one or two person business or the small airline. This is an example of how the Government once again wants to hit the little guy, but it is hands off the jet set.
Northerners and those who live in more isolated areas are much more severely affected by these measures, for example, a simple thing in one sense like one cent on a litre of gasoline, will have very serious affects for a number of families and small businesses.
Another example of how the Government might have looked at some innovative measures that would reduce the need for the $23.5 billion that we are asked to approve on this borrowing Bill is to look at its priorities and its development.
In the Yukon the Alaska Highway is our one vital and key link for transportation, investment, and development. If that highway is not in a reasonable condition, and we are not asking for a four lane highway but a reasonable highway that can be travelled, our tourism and our ability to attract investment are significantly impacted. What is this Government's priority? It is to cut the budget by 50 per cent for this highway, our one link to the outside.
We heard the Minister of Indian Affairs and Northern Development (Mr. McKnight) say, "If you want to develop constitutionally, become self-sufficient". We are being told to become self-sufficient at the same time as funds are being cut which would have helped us to increase our self-sufficiency. It does not make sense, and that seems to be the thrust of much of this Budget.
The other area I wish to mention is what I referred to as the peekaboo sales tax philosophy of the Government. In the Budget report the Government talks about future reforms of sales tax. Anyone can read between the lines on that one. Between the lines it says, After the election, we will tell you what will happen. We have already felt the effects of the 10 per cent increase in the telecommunications tax. That again hits the isolated regions and the people who have to maintain contact with southern Canada for professional, business and family reasons, particularly in the riding that I represent. How does this help development? How does this help to raise revenues in order that we do not have to borrow as much as we do at this time?
I do not want to appear ungrateful, because I did note in the Budget that there was a removal of duties on model glider kits and burial shrouds. That will benefit northerners as well as other Canadians, and we are certainly pleased that this innovative measure has been taken at this time.
The introduction of the northern allowance was another way that the Government could have redressed some of the disparities that I have mentioned.

February 12, 1988
Borrowing Authority
If the Government had made this a tax credit rather than a tax allowance, lower income and lower middle income people would have benefited to the same degree as higher income people. Certainly, it is a good measure, and I am not criticizing the measure, but it is a half measure. If it could have been made a deduction more people would have benefited, more people who now pay very high housing costs would benefit. But again it is only directed to those with higher incomes. The people with lower incomes have the toughest time raising their families in the North.
What about the other innovative measures that we have seen from the Government on raising revenues? Since the Government took office in 1984 personal income taxes have gone up a whopping 38 per cent, while the tax paid by corporations has increased only by 28 per cent. This leads me to one of the glaring inequities of the Government's philosophy of raising revenues.
We know that there are 60,000 profit making companies which still pay no tax. Last year there were more than 500 Canadians listed as making more than $200,000 a year who paid no tax. This is not very much comfort to the single parent who is raising two children, for example, on earnings at about the poverty line, somewhere slightly under $20,000, and has found her taxes going up each year from 1985 to 1987. Total taxes dropped from about $1,800 in 1987 to $1,355 in 1988 thanks to tax reform. However, the 1988 amount is still higher than the tax bill paid by that same single parent of $1,200 in
1984.	It will be very difficult to explain to that person how the Budget will help her and that there is sound rationale for the amount of borrowing we must do at this time.
As we have said before, a minimum corporate tax would certainly have served to address some of these issues and to raise revenues in a fair manner and consistent with what we in the New Democratic Party feel, that is, that the burden of taxation should be spread across society, not just applied to the average person who is trying to raise his or her family. Each time a new Budget comes out, we see that that is who has been hit.
I should like to refer to one comment in The Budget Speech of the Minister which I think is quite important. It reflects on the amount of money that he is seeking approval to borrow. The revenues projected in the Minister's Budget are based on a very optimistic and rosy view of the economy. The Government says that in 1989 the rate of economic growth is expected to rebound with consumer expenditures buoyed by refunds from tax reform. I have just mentioned the situation of a single parent. It may be that the shareholders of companies that do not pay taxes will be out buying a bit more. It is a very hopeful scenario and, as a Canadian, I hope it comes true. However, we must look at what is realistic. It appears from the Government's figures, as I mentioned earlier, that there will be reductions in unemployment insurance contributions. We can expect more unemployment and reduced incomes. If they are
making and contributing less, how can they possibly consume more?
The Canadian Manufacturers' Association and other investment counsellors have a less optimistic outlook for 1989. We hope that they are wrong, but perhaps they are looking at the Government's own figures and predicting more unemployment than the Government wishes to predict. Obviously many hopes and dreams are built into the Budget, and we will see what will happen.
I want to support my Party's point about minimum tax for corporations. What the Budget shows is that we must look at how to realign our spending priorities and our revenue raising priorities. There is a possibility to do that. It is not something that is pie in the sky; it can be done. We have certainly made a number of suggestions in that regard.
In summary, I want to refer to what is in the Budget for different groups, for example, women and families. There are increased travel costs. We see that money has been put into regressive tax measures which do not help average families who need child care. We do not see increased child care spaces so that those members of families who want to work know that while they are working their families are in safe, quality child care, and that the children of the future receive the break they need. We do not see anything in the Budget for these people.
1 would also like to refer to what is not in the Budget for aboriginal people. We know that the first nations have many problems such as poor housing. They have a need for economic development, a need to receive assistance to establish a good economic base, and a need for social programs. We do not see any recognizable, targeted measures for aboriginal peoples.
What about the North? The North is only mentioned once in the Budget in reference to the northern allowance being excluded from the tax preferences which are subject to minimum tax. Certainly that measure is consistent with the principle of recognizing the extra financial burden of living in the North, but in fact it will only affect those with incomes of over $50,000. It will not affect the average northerner or the average single parent who is trying to pay for child care. Some men and women are looking for and want jobs. They do not want part-time or temporary ones. They want full-time jobs that are meaningful so that they can contribute to Canadian society, which will raise tax revenues and help decrease the amount of money it would be necessary to borrow.
Surely the deficit is of concern to every Canadian. However, I am suggesting that a rethinking of priorities is needed. We must all work toward reducing the deficit, but corporations and taxpayers alike should share the burden. At the moment individual taxpayers are carrying an unfair share of the burden. All the Budget does is underscore that with a one cent tax on fuel and a decrease in certain programs.
Do we really need to spend billions of dollars on nuclear submarines? It seems to me that that is a very good question. Often child care people and defence people are fighting it out
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for the money. Spending on nuclear submarines, which fortunately the Government has said it will not use for any offensive purpose, is a very skewed priority and does not contribute in a meaningful way to our economy, to the North where many of these submarines would be located, or to reducing the deficit about which we are all worried.
Perhaps the Budget was designed to do nothing. In some ways it meets that criterion. Some people have called it a preelection Budget. I guess it was a pre-election tranquilizer so that we would not notice some of the more serious ramifications of the philosophy behind the Budget. Once again they will make sure that the little guy pays. They are not going to tax jet fuel. No, they will not touch the jet setters, but they will touch the small guy or the small business. On reflection, the Minister has not really presented us with a "do-nothing" Budget, in that it is an indication of the Government's philosophy and priorities with which my Party and I have great difficulty agreeing. We do not feel that it addresses the major outstanding issues in Canada today.
On that note I should like to conclude by saying that Bill C-109 under discussion today is simply a reflection of the state we are in, the necessity to approve the borrowing of a large amount of money without knowing-we do not have the Estimates-exactly to what it is said to be directed and without knowing who will be vulnerable to the proposed cuts in the Budget.
The Government must take a serious look at its priorities. I can assure its Members that in the next election Canadians will be watching very carefully.


Mr. Deputy Speaker:: Resuming debate. The Hon. Member for Laval-des-Rapides (Mr. Garneau).


Raymond Garneau: Mr. Speaker, I would like to take a few minutes to comment on Bill C-109, legislation that, if passed, will allow the Government to increase the national debt by $25.3 billion during the financial year starting April 1.
Mr. Speaker, the charge on a loan of $25.3 billion, if calculated according to the medium and long-term interest rates in effect today, will cost over the next financial year, and 1 am referring to 1989-90, a total of $2.5 billion. If interest rates continue to rise, this may well entail additional expenditures that will spread to future budgets.
Mr. Speaker, at the end of this financial year, Canada's national debt will have reached nearly $300 billion. Nobody has ever had that much money in his bank account, let alone his billfold. This is a lot of money, a little over $12,000 per Canadian man, woman and child. This money is largely owed to other Canadians, but nevertheless, the federal Government has to pay a certain amount of money annually just to pay the interest on the national debt, and these annual expenditures are now as high as $30 billion per year. This means that every Canadian man, woman and child would have to pay an
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average of a little over $1,000 per year in taxes just to pay the interest on the national debt. Obviously, when we realize that children, for instance, and some people who may or may not be in the labour force do not pay income tax, this is an enormous burden.
Mr. Speaker, on the Government side there is a tendency to say that the deficit and the debt we have today were created by the previous Government.
1 would like to take a few moments to argue this point. The Conservatives are saying: "When you Liberals were in power, you had deficits, and now we are trying to deal with them". I may remind the Conservative Government that although we had quite substantial deficits in 1981, 1982, and 1983, it was because the world economy, so not just Canada but the entire Western world, was in an economic recession. It was the worst recession since the Great Depression in the thirties.
1 hear businessmen, merchants say: "Deficits are always bad". Here is my usual question to those business people: What would you have done in 1982, 1983, 1984, when the recession caused high unemployment, what would you have done had the Government decided, in order to avoid any deficit, to cut most social programs, unemployment insurance, etc? Clearly, the first victims would have been people in need, but the second victims would have been merchants, businessmen, industries producing the goods that were bought by people who, even though they were depending on unemployment insurance or welfare thanks to that State intervention, had the financial resources to buy some consumer goods, which allowed a hurting economy to go through that period. Now, and this is what I am blaming the Conservatives for, if it is acceptable to accumulate deficits in times of economic depression and large unemployment in order to help unemployed workers survive a difficult period, this had practically no justification any more once economic renewal ensured that the rate of growth of the economy had gone up, and especially when after six years of economic growth, we found ourselves in a situation that is just as bad and even a lot worse than the 1981, 1982 and early 1983 recession.
Mr. Speaker, looking at the figures, we see that this Conservative Government promised wonders but did not deliver. Let me recall that during the elections, the Conservative Party made a lot of promises. Maybe two or three people referred to the deficit, but one of them, the Leader of the Liberal Party of Canada, Mr. Turner, raised the problem during the election because he knew the depression was improving, renewal had started since the middle of 1983 and this concern had to be addressed if we were to get out of the depression. But the Conservatives promised wonders. What did they promise for instance?
I shall now read what the Conservatives had promised. 1 have quoted this a number of times, but as the Minister of Finance (Mr. Wilson) seems to indicate that I am quoting out of context, I went back to Hansard, and instead of reading only one sentence, 1 shall now read an entire paragraph to

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show that the Conservative Party had made very firm commitments to the Canadian people when in Opposition.
The population believed the promise made by the present Minister of Finance, who was then a member of the Opposition representing the Etobicoke Centre riding. On March 6, 1984, the Elon. Member for Etobicoke Centre stated what follows in this very Elouse, and he may even have been sitting in the seat I now occupy myself.
I shall quote him in English, as the text I have before me is in English.
When the Minister of Finance (Mr. Wilson) was in Opposition and made a speech about the Budget, he asked himself questions and answered his own questions. Fie said:
Then the question is: How would you cut; would you cut by raising taxes or by cutting government spending? Again the answer is very clear. We would cut spending. We would not raise taxes. Tax levels in Canada are already too high. Spending cuts are important for another reason. If we raise taxes, we provide more funds for politicians and bureaucrats to spend.
Can you imagine that, Mr. Speaker? When the Minister of Finance was in Opposition, not only did he say that a Tory Government would not increase taxes but he said that the reason for that was that the taxes were too high. I think I agree with him about that. He also said that raising taxes would give more money for politicians and civil servants to spend.
After three and a half years of this Tory Government, can we say that the Minister of Finance and all the Tory backbenchers who repeated his words during the election campaign lived up to their promises? Certainly not.
I have said on other occasions and will repeat once again, because it is so important in this debate, that this is a question of credibility. Can we trust this Government? Can we trust this Minister of Finance? He said in 1984, a few months before the election, that he would not raise taxes and that he would cut expenses. That was a commitment he made on behalf of his Party. Probably many Canadians thought that his Party was serious.
After three and a half years of administration by a Party which said it would not increase taxes, here is the list, not an exhaustive list but just a few examples, of the broken promises. Those broken promises go to the heart of the question of credibility. Can we trust this Party if it now says that it will not increase taxes in the future? Can we believe it? Are we prepared to vote for this Party? When this Party says it will cut the deficit completely or will reduce it to the level of $20 billion, can we trust it now? It lied to us in the past. I believe that when it does that once, it can do it again.
Here is the list of the new taxes imposed by this Government which said that it would never increase taxes to cut the deficit. Soon after it was elected, on October 1, it increased the federal
sales tax by 1 per cent, from 9 per cent to 10 per cent. On January 1, 1986 it increased the manufacturers' sales tax by another percentage point to 11 per cent. On April 1, 1986, there was another increase of 1 per cent to 12 per cent. That is three increases in less than two years in the manufacturers' sales tax.
This Government which said it would never increase taxes increased the manufacturers' sales tax by 3 per cent and now more companies have to pay sales taxes, thus increasing prices to the consumers. The first extension to it was on July 1, 1985, and the second on July 1, 1987, for an additional half a billion dollars.
The sales tax increased from 8 per cent to 12 per cent on paint, wallpaper and toys on January 1, 1988. There was an increase in the gasoline tax, and the Minister deserves the gold medal for the gasoline tax.
The Tories say that when the Liberals were in power they increased taxes on gasoline. 1 ask the Tories, do they know why? It was part of a policy to Canadianize companies in the oil and gas industry, to make sure Canadians owned the resource, not foreigners. It was to make sure Canadians manage their own economy and to be both les locataires et les proprietaires. We had a policy to make sure Canadians own their resources but the Government cancelled that policy and retained the tax on gasoline. Not only that, it increased the tax to an almost unbearable level.
On September 3, 1985, that Government and that Minister put in place a two cent per litre tax on gasoline and diesel fuel. They added another cent on January 1, 1987. Another cent in February, 1987. Can you imagine, 4 cents in a very short period of time. A few days ago they added another cent to reach 5 cents per litre. Translate that into a gallon. A lot of Canadians are more aware of the Imperial system than the metric system. People my age understand the gallon but have difficulty with the litre. My children have no problem but I am getting old and I have a problem; that is why I want to translate it into gallons. Five cents per litre is 23 cents per gallon. When we take into consideration the 3 per cent increase in sales taxes, it adds up to 27 cents per gallon.
Can you imagine, in three and a half years that Party which said publicly it would help the resource industry, help the gas and oil producer, has increased the price of gasoline by 27 cents a gallon. I was not a Member of this Parliament in 1979 when the Hon. Member for St. John's West (Mr. Crosbie) tabled a Budget on behalf of the Tory Government which included a tax increase of 18 cents a gallon tax. The Government was defeated on that increase. If a Tory Government was defeated over an 18-cent tax increase, can you imagine what will happen with 27 cents?
That is not the end of the broken promises. That Minister, who said on March 6, 1984 that he would not increase taxes, has increased taxes on tobacco on four different occasions: the
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first was on May 24, 1985, for S340 million, the second was on February 27, 1986, for $150 million, the third was on February 19, 1986, for $75 million, and the fourth was on January 1, 1988, for $175 million. For a Minister who said he would not increase taxes, that is quite a record.
That is only on the consumer side, though there are a few others. After having increased sales taxes, enlarged the base of the sales tax, after taxing gasoline, tobacco and alcohol, he had to look for something else. He decided Canadians were making too many long-distance calls and added a 10 per cent tax on those starting January 1, 1988. When you live in Toronto or Montreal you can reach two or three million people without making long-distance calls. The population is large and for your monthly fee you can reach millions of people. However, if you have the luck to live in remote areas like the Gaspe or the Northwest Territories you have to call long-distance much more than when you live in Toronto or Montreal. This 10 per cent tax on long-distance calls has a big effect on people living in the regions. The Government will raise close to $1 billion through that tax every year.
As well, on the consumer side, the Government has decided to shift the sales tax to the wholesale level and the same rate of 12 per cent will raise a lot more money than the 12 per cent at the manufacturing level. So much for consumption taxes.

Mr. Speaker, apart from consumption taxes, there have been income tax increases as a result of discounting the first 3 per cent of inflation. Without saying a word about it, without passing any legislation, without referring to it in his Budget speech, the Minister of Finance will take this year just under $750 million from Canadian taxpayers. This was not mentioned in the Budget speech. It is not without reason that I stated in my comments that the Minister of Finance had not kept his promise. Not only did he fail to do so by adding new taxes in each successive Budget, but he has also failed in his promise in a roundabout way, through the back door, by partially deindexing income tax tables, which is bringing the Government $750 million a year without a single word being said about it!
Mr. Speaker, there have been a whole series of measures: The partial deindexation of family allowances, the partial deindexation of the child tax credit, lowering the ceiling for the child tax credit, and so on. Mr. Speaker, I would like the Minister to explain something to me. When you add up all those measures, you get something like $22 billion in tax increases. Why is it, after having increased taxes by $22 billion and after the six years of economic recovery mentioned by the Minister, that he still needs to borrow $25.3 billion for the coming fiscal year?
If I were involved in a boxing match, Mr. Speaker, I would tell the referee to keep his eyes open, that someone is hitting me hard, for this Minister has increased the taxes. He claims that he has cut Government expenditures and that he has to seek $25.3 billion in borrowing authority. Yet, Mr. Speaker,
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we do not have the estimates, only total figures. We do not know just how much will go to this or that department or agency. We have nothing of that.
Mr. Speaker, we are certainly not going to let the House adopt Bill C-109 unless we get at least some information about the manner in which this Tory Government intends to spend not only the money it is now borrowing, but also all the old and new taxes which the Government is collecting every year. That is why we will certainly continue this debate as long as possible, because we believe that a Bill authorizing the Government to borrow $25 billion is important enough for us to wait until the estimates are tabled, I imagine, sometime at the end of this month.


Mr. Deputy Speaker:: Questions and comments.


Aideen Nicholson: Mr. Speaker, I would like to ask the Hon. Member if he has any ideas thus far about where the Government is going to get the money for some of the programs it announced but which are not shown in the budget papers? Over the past year it has announced $1.3 billion for research and development, and defence expenditures which could go as high as $12 billion to $16 billion even though they are supposed to be phased in over five years. Those are not described in the Budget papers. The borrowing authority Bill before us requests $22.3 billion for financial requirements forecast in the Budget plus a $3 billion contingency allowance.
Has the Hon. Member any idea of how this $3 billion might be expended or how the Government can make it stretch to include all the other things announced, or does he anticipate that we will be seeing a lot of supplementary estimates and perhaps a supplementary borrowing authority Bill before the election?


Raymond Garneau: Mr. Speaker, I would like to thank the Member for Trinity (Miss Nicholson) for her question. I would be in a better position to answer the question if I knew when the election will be called. In my response to the Budget speech 1 talked about the slush fund for which Tory Members were crying. Just as I mentioned it, there was a lot of noise on the government side. I think I touched upon a very important aspect of the debate.
I am not suggesting that the $3 billion will be used for that, but we are informed that some of the Tory Members are trying to get information on what they can pay at the municipal level to help build roads or bridges. They are suggesting to the mayors that they may have a $5 million slush fund for the riding. That smells of election time.
In the old days the Minister would come clean with the Canadian people and the House and announce the programs from the ministerial benches. However, this Government has decided to go the sneaky way, just as it did with the deindexation of personal income tax. The Government is going through

February 12, 1988
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the back door, saying that it will have a lump sum of $3 billion and will see whether it cannot use part of it for a slush fund to help Tory Members buy their elections.
However, there can also be other reasons for this $3 billion. In any Budget there is provision for things which are very difficult to budget for. However, the Government has announced close to $2 billion worth of new programs and there was nothing in the Budget about them. That is why we say that it would be imprudent for any member of this Parliament to adopt Bill C-109 before we see the Estimates. Then we will know into what programs the money will go. It may be easy for us to entertain you, Mr. Speaker, for a few hours more on this same matter.


Aideen Nicholson: Mr. Speaker, all through the self-congratulation of the Budget papers the Minister said that he is on the right track in reducing the public debt. I wonder whether the Hon. Member who has just spoken had occasion to look at the November-December issue of the Business Review of the Bank of Montreal. That issue stated that far from being on the right track the deficit is in the process of going completely off the rails. That article suggested that if it were not for the creative bookkeeping used in the Budget papers, the 1987-88 Budget might in fact be almost $4 billion more than the figures presented to us.


Raymond Garneau: Mr. Speaker, I did have a chance to look at this report and I referred to it in my response to the Budget speech. As well as the Bank of Montreal saying that, La Presse of February 11 -

-under the byline of Mr. Alain Dubuc, refers to these accounting devices used by the Minister of Finance (Mr. Wilson). This article by Mr. Dubuc reminded me that shortly after being appointed Minister of Finance-something my friend the Hon. Member for Trinity (Mrs. Nicholson) will certainly remember, he decided to change the accounting procedures across the board. Not only did he do that, but he changed also the manner in which the tax collectors remit the money to the Government. Before that, they had to do it every month; now, it is every 15 days; from now on, they will have to remit it every week.
If this Government were unfortunate enough to get reelected, I suggest it would ask them to do it on a daily basis. Mr. Alain Dubuc compared the situations and said: "The deficit in 1988-89 would be $31 billion compared to $36 in 1983-84", which means that on an identical accounting basis, following six years of economic growth, after having increased taxes by $22 billion, the deficit has been reduced by approximately $3 or $4 billion. It is surprising enough for a Government which had used deficit reduction as its favorite campaign theme.
This is why I said earlier that the debate is important because it proves one thing. It proves that the Conservative Party does not deserve our confidence after the solemn commitments they made: first they promised they would not
raise taxes and, second, they promised they would lower the deficit by slashing expenditures. After three and a half years we can see for ourselves that the deficit has remained roughly at the same level through six years of economic growth, and that taxes have gone up considerably. To that extent I believe it is a question of credibility. I should think this is why polls show that their Party's popular support has dropped to 27 per cent. Come next election, people will vote for the Liberal Party because they have already indicated in the latest poll that it would get 41 per cent of their support. To put it another way, if an election were called their Party-it has failed to honour its election promises-would vanish from the front benches.


Ian Gardiner Waddell: Mr. Speaker, it is with a great deal of pleasure that I rise on behalf of the New Democratic Party to speak on this particular Bill. This Bill seeks to borrow the sum of $25.3 billion over the next fiscal year. The figure comes from $22.3 billion in the Budget, which the Minister of Finance (Mr. Wilson) announced on Wednesday, and a contingency fund of $3 billion on top of that for a total of $25.3 billion.
In my speech I will combine my remarks on this Bill and on the Budget since they are intertwined. I will also put forward the views of my constituents in Vancouver-Kingsway. However, that riding is to be eliminated in redistribution and if the election is held after July of this year, that riding will no longer exist. Therefore, I will also try to articulate the views of people who live in the area of Port Moody-Coquitlam in Vancouver, those wonderful people in the riding in which I will run if indeed we go on the new boundaries. Many of the same problems are shared by those people. Indeed, the people of Port Moody-Coquitlam share problems with many people all across the country with the present economy and the present policies of the Government.
We in the New Democratic Party believe that the Government's 1988 Budget is a Budget of lost opportunities. It was not the time to stand pat but a time for action. The Minister of Finance had a real opportunity to move to greater regional fairness, to stop the rising interest rates, and to make the tax system fairer. The latter is of particular concern because, except for the large corporations which do not pay any taxes at all, Canadians pay taxes which are taken right off the top of their wage packets. They are the ones who wanted a fairer taxation system. Instead, the Minister of Finance chose to have a stand-pat Budget that does little for the average Canadian family.
The Budget provides for an increase in the gasoline tax of one cent a litre, which will cost the average family $50 a year.
1 want to begin by referring to that gasoline tax. Since I have been the New Democratic Party energy critic for some seven years, I have seen a seemingly endless increase in this tax. The Government appears to consider the Canadian motorist as a milk cow because it seems to add another cent a litre gasoline
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tax in every Budget in order to raise another S3 or $4 million from the motorist.
I visited Toronto last weekend where, we are told, the economy is booming. It is one area of the country where the economy seems to be pretty high, but once one scratches the surface and considers the average family, one sees that most families cannot afford to live in downtown Toronto but must live in the suburbs and drive to work. The same situation is faced by many Canadians who live in the larger cities, including Vancouver where many people live in the Coquitlam area and must drive to work. One of the problems there is that they need additional rapid transit to help them get to work.
While the Government put a tax on gasoline, there is no quid pro quo, an earmarking of $300 million, for example, to upgrade the rapid transit system.
Some of the local mayors in the riding of Port Moody- Coquitlam, particularly the mayor of Port Moody and the mayor of Port Coquitlam, have been advocating that Canadian Pacific Railway permit the upgrading and the use of its lines, with some help from the federal Government, to support a rapid transit system into Vancouver. This would save money and travel time for their residents.
However, what action did the Government take? It added another cent a litre tax at the pump without earmarking that money for improvements. Many Canadians live close to the border and know that our price for gasoline is almost double that in the United States. There are two reasons for this. The first is that the Government continues to add taxes at the pump, to which provincial governments add the so-called ad valorem tax.
The second reason is that oil companies make too much money and have too great a profit margin on their gasoline. The five big companies that control the gasoline market in Canada represent a classic oligopoly. They continue to increase the price of gasoline, sometimes at the same time as the Government increases its tax. We may see the oil companies tag on an increase to the price of gas as a result of this recent tax.
Eventually Canadian motorists and consumers will say that enough is enough. We in the New Democratic Party suggested that one approach to energy policy would be to reinvest money as a result of an additional cent a litre tax at the gas pump into such things as rapid transit or possibly to help small Canadian-owned oil companies by establishing a floor price for them, for example, so they will still be in existence when we experience our next energy crisis. This would also prevent the oil industry from being taken over completely by the multinational oil companies, as is happening now.
The Government continues to increase gasoline tax. This is the fourth increase since the Conservatives were elected in 1984 and the cumulative impact has been $350 for every family that uses a car. This Budget gave the Government an opportunity to correct the unfairness in the tax reform package
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of last year. However, the Government did not take advantage of that and the result is that in 1988 the average family will be paying more than $1,100 in additional taxes than in 1984. Only the richest 2 per cent of taxpayers will pay less.
The rich will get a break and the middle class, who are basically assuming the tax burden in this country, will be paying an additional $1,100. During Question Period today the finance critic for the new Democratic Party, the Hon. member for Ottawa Centre (Mr. Cassidy), asked questions about a minimum corporate tax. Even Ronald Reagan can do that, so why cannot the Government in Canada impose such a tax?
Let me give some figures which we have compiled. Under the Conservative tax regime, the following very profitable corporations paid no taxes in the most recent year for which such information is available. In 1986, Alcan Aluminum had profits totalling $220 million and even received a tax credit of $32 million. Brascan had profits of $187 million in 1986 and received a tax credit of $2.3 million. Hees International had profits totalling $117 million in 1986 and did not pay any taxes. In 1986, Power Financial had profits of $132 million and received a tax credit of $1 million. Xerox Canada had profits totalling $115 million in 1986 and received a tax credit of $10.8 million. In 1986, Total Petroleum, on profits totalling $40 million, received a tax credit of $2.2 million.
In 1986 Wardair had profits of $70 million, with no taxes paid. In 1986 Pacific Western had profits of $39 million with no income tax paid. Repap Enterprises had profits totalling $34 million in 1986, with no taxes paid. Union Carbide had profits of $28 million in 1986, with no taxes paid.
Bramalea had $51 million in profits with no taxes paid. In 1987, Cadillac Fairview had profits of $95 million and received a tax credit of $12.4 million. In 1987, Carena-Bancorp paid no taxes on profits totalling $37 million. In 1987, the Hudson's Bay Company had $50 million in profits and received a tax credit of $15.7 million. SICO Camp had profits totalling $43 million in 1987, with no taxes paid.
The average worker in this country has taxes taken directly off the pay cheque. I talked to a crane operator recently who got a terrific job and made $2,000. He received a cheque of $1,000. He does not get a tax credit because it comes directly from his cheque. That is what the average Canadian family is saying is unfair.
The Government continues to resist meaningful tax reform in this area. The Minister of Finance had an opportunity to bring in a minimum corporate tax that would ensure that all profitable corporations pay their fair share. It is not meant to tax them out of existence, but to have them pay their fair share.
The revenue generated from such a tax could be used for such things as regional development. Yet, with this Budget,
60,000	corporations will continue to pay no tax.
That raises the other problem of regional development in this country. There are essentially two Canada's. One is the

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area in the Golden Elorseshoe in Ontario which has a booming economy, even though there are housing problems. The second Canada includes the rest of the country where the boom has not arrived. My own province has an 11 per cent unemployment rate. That is too high.
In an afternoon news broadcast in my province yesterday, it was reported that the school board received permission to apply to the federal Government for funds to feed hungry children. Hopefully, there will be no more hungry children in the schools. There is desperation in our province. We have food banks in Vancouver. Some people are better off, but many people are still unemployed. It affects the vast majority of people in the workforce as well because it is difficult for them to move from one job to another or to seek higher wages. It is difficult for them to make any kind of changes at all. It is difficult to commit themselves to a high interest, long-term mortgage to buy a house because they may get dumped from their jobs, and it is very difficult to find another job in the labour market in British Columbia.
The Budget also ignores that half of the jobs created since the Government came to power have really been in one province with about one third of the population of the country. The Government is well intentioned in trying to create jobs. We all want to see that. But when the Government throws out figures of how many millions of jobs it has created, it should remember that those jobs tend to be in a certain region of the country. We are not against that, but we want to see some regional fairness. Second, the jobs which have been created tend to be lower paid jobs in the service industry. One should realize the kind of jobs the Government has created.
My Party and I believe that Canadians were looking for fairness in the Budget, but nothing is offered to close the growing disparity between people in central Canada and those in the outlying regions of Canada, in the east, west and north. The Prime Minister (Mr. Mulroney) warned us last year that we are in the process of building two Canadas, one which is rich and promising and one which is underdeveloped and underemployed. It seems to me this warning remains true today. But the Minister of Finance has lost the opportunity to do something about it.
Major improvements in job creation, I believe, are being held back because of the preoccupation of the Bank of Canada with interest rates. In order to get the economic growth to continue in the regions, we need a policy of regional fairness and development and we need a policy of lower interest rates.
The Economic Council of Canada has said that a cut in interest rates would be the single most job creating initiative the Government could undertake and that it would provide for far better growth for the economy than the proposed trade deal. Economists like Michael McCracken of Informetrica have argued for lower rates to stimulate the growth and counter the possibility of economic decline following the stock
market slide in October. But the Finance Minister continues to support the stance of the Governor of the Bank of Canada and has done nothing in his Budget to stimulate regional growth or lower interest rates which are, in my view, the most pressing economic problem in Canada.
The Canadian dollar has gone up so the Minister need not worry. He should forget about the old argument that we have to keep interest rates high to get foreign capital to come in and keep our dollar from falling. The time is right now to lower interest rates. That would help suburban families, the kind of family who lives in Port Moody or Coquitlam, who could afford a house and have more money left over because they would save on their mortgage payments.
I would like to conclude by addressing two further matters, first, the trade deal because it is tied in with the Budget. I cannot go into great detail about it, but I would say that many people in British Columbia were hoping that the trade deal would provide some answers for them. Many still assume that the deal provides the answer they wanted, that is, access to the American market. There would be unrestricted access to the goods and raw materials of British Columbia to the American market. But I say to them and to you, Mr. Speaker, that the fault with the Mulroney-Reagan trade deal is that it does not secure that access. In fact, it was a bad deal. Congress can still put countervails on our shakes and shingles and potash. It can still interfere with our logging and wood product exports. That is going to happen after the trade deal. So we have to ask ourselves, just as Canadians in British Columbia are asking themselves, what did we gain from this trade deal when we look at what we supposedly gained, access to the American market, which we did not, and compare it to what we gave up? We have entered into a continental energy policy. We have given away all our ace cards, all the control over our resources.
I think it is a bad deal. That is a developing debate in British Columbia.
What we are going to need instead is for Canadians to do it on their own with a regional development program and a Canadian national development project so that we can provide full employment in this country. We in the New Democratic Party have put out a paper written by my friend, the Hon. Member for Essex-Windsor (Mr. Langdon), our trade critic. It is called "A Time To Choose, the New Democrat's Trade Option in Canada". I do not have time to go through it right now but I will say that we believe there are other ways of keeping what we believe in strongly, of stimulating the economy and providing jobs, than joining in an economic union with the United States, which will ultimately lead to a political union.
I mentioned some corporations which did not pay taxes. I mentioned the gasoline tax which is hosing the consumer again. I want to conclude by going through some figures to show what has happened to the average family since this Government took power. I am talking about an average family with two children earning an income of $35,000.
February 12, 1988

In November 1984 in the Government's economic statement there was an increase in the oil and gas prices. That cost $200, unemployment insurance premiums another $102, and sales tax increases another $150. That totals $450. In May of 1985 we had a Budget. There was an elimination of federal tax reduction. That was $100. Indexing was modified for $115. There was a cut in family allowance payments, $22.50. Cigarette and alcohol increases cost $75. Sales tax was broadened, which cost $150. There was another gas tax increase, $50. That was another $512.
In 1986 we had another Budget. There was a 3 per cent surtax, $170, a sales tax increase, $150, a cigarette and alcohol tax increase, $20. That is $340. In 1987, another Budget with another gas increase, $50, sales tax broadened, $15, cigarette and air tax increased, $35. So we are up to about $80 there.
On June 18, 1987, the tax reform comes in. There are changes in the tax categories, so we have to subtract $310. Now we have this Budget with the increase in gasoline tax, another $50. All this totals $1,124.50. That is the increase for the average family since this Government took office. I challenge the Government to deal with that and I challenge the Government to go to the country and face the average Canadian family who wants to see some fairness in taxes and in regional disparity. The Government should make this the kind of fair system that Canadians have come to expect.


Mr. Henderson:: Mr. Speaker, I just want to make a brief comment and ask the Hon. Member to respond to it. 1 want to express my satisfaction with the Hon. Member's speech. He clearly outlined the problems that the one cent per litre increase in tax on gasoline would present to the people in the suburban areas of Vancouver, an area he represents, as well as people living in other large cities.
I would like to point out how it really hits areas such as the one I represent in Prince Edward Island, which is a rural area, where farmers and fishermen and those who can find jobs have to drive 30, 40 and 50 kilometres one way to and from their work or their place of shopping. Indeed, just to attend church services these people have to drive that many kilometres. An automobile is not a luxury anymore in those areas. It is a necessity. It is something that the citizens of the country have to rely on.
Another point that came out in the Budget was that farmers and fishermen will be exempt from this one cent per litre increase. I would like the Hon. Member to comment on this point as well. It is a very misleading statement because farmers and fishermen are also consumers. While they are exempt in terms of their on- farm activities and their fishing industry activities, they are still consumers. They still have to travel miles to and from their shopping areas and to all the other activities that they as ordinary citizens have to do.
I just want to set the record clear today. It is not quite right to say that farmers and fishermen are exempt. While they are
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exempt in their own farm activities, they are not exempt anymore than anyone else when it comes to their ordinary daily lives. Will the Hon. Member please make a comment on that point?


Ian Gardiner Waddell: Mr. Speaker, I agree with the Hon. Member with respect to farmers and fishers. He is exactly right. He also brings out the point that Canadians drive to work. In that respect 1 mentioned the suburbs. But in some cases such as in Prince George, British Columbia, if someone has to drive to a mill it is often out of town. In Pouce Coupe people have to drive to their work there. I will not advocate cheap gasoline prices. I think the American prices are too low. There is room for some taxation there and there will be some. The Americans will eventually get around to it.
There is also an argument for conservation when consumers have to pay a great deal for gasoline. Environmentalists will make that argument. There has to be a bit of a trade-off. I often find that the environmentalists who make that argument live right next to the Bloor Street subway line in Toronto. They do not live in Prince George where they would have to drive 30 miles to the mill. So we have to need a fair saw-off if you like.
What is happening is that the Government has reached the point where the consumer, the motorist, has become a milk cow. In every Budget it seems that there is another one cent per litre tax imposed. When I was energy critic, I used to know what I was going to say even before the Budget was tabled. I did not even have to see it. If someone asked me to comment on it, I could say that this is what they will be doing to the motorists. It was right all the time.
I think that at some point in time the Government will see rebellion from the motorists who will say, "Look, it is just too much". Motorists may be prepared to pay more if they thought that the money was going for something, not just for a Tory slush fund for an election or a pay-out here to let Grant Devine win an election. If they thought that it was earmarked for energy development, for conservation, for regional development or for rapid transit then they would probably agree to it. But the consumers, including the fishermen and the farmers, will not be fooled anymore. They will start to rebel on this point.
The former Minister of Finance, the Hon. Member for St. John's West (Mr. Crosbie) had a nasty experience when he tried to hose Canadians at the pump too fast. This time the Government is stretching out the agony. Canadians will be in agony nevertheless at the pumps. They will rebel at this point.


Daniel James Macdonnell Heap: Mr. Speaker, I listened with interest to the Hon. Member on his comments on the Budget and on the borrowing Bill. I notice that he was concerned with interest rates and with the need to reduce interest rates. I also noticed that he made reference to a program of the NDP, our Party, as an alternative program, particularly emphasizing regional development.

February 12, 1988
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1 am wondering if the Hon. Member would comment further on the regional development program, including how that relates to the matter of lowering the interest rates. What is the connection between lowering the interest rates and building up regional development in a way that the trade deal with the United States would not do?


Ian Gardiner Waddell: Mr. Speaker, there a number of matters that could be included there. High interest rates make it harder for us in British Columbia to compete with the United States. The cost of financing our new investment now is 30 per cent higher than it is in the United States. Thus companies are locating south of the border rather than in Canada.
There have been a number of bankruptcies as a result of the high interest rates. The number of families who could not afford mortgages to buy homes has meant that economic development has not progressed because of the high interest rates.
The Government has to make a decision. Does it choose between ordinary Canadians who would benefit from low interest rates or does it protect its friends, whether it is in the oil industry or a certain group of Canadians who feel that inflation is the big problem and they want those particular investments protected? With our policy, which advocates lower interest rates, it would stimulate development. It would use the Government and not leave everything to the so-called free market. It would use the Government in partnership with private industry. It would use the tools of the Government to help in regional development to encourage it rather than putting all our eggs in the American basket. This would give us an independent economic policy and an independent foreign policy as well as an independent cultural policy.
Those are all part of our vision of Canada. We in the New Democratic Party think that that is the real alternative for Canada. We think that the place to start is in the economic arena. We will keep up pressure on this. The Government should tackle the Bank of Canada on the interest rates and force them down. It seems to us that this would be to the benefit of ordinary Canadians. The economy needs this or else we will go into another economic slump.


Daniel James Macdonnell Heap: Mr. Speaker, the Hon. Member has given a good answer to the question of how lowering the interest rates would benefit the regions of Canada. Can he be more specific about the region in which he has his representation, that is, within British Columbia?
What I have in mind is that in downtown Toronto, which I represent, we have two kinds of banks. We have the banks on Bay Street, which are the beneficiaries, as he said, of the high interest rates. We also have the food banks a little further away from Bay Street where the people who do not benefit by the high interest rates have to go to eat if they are out of work. I believe in British Columbia they do not have bank head offices, but they do have some food banks. I understand there is a seriously high rate of unemployment in British Columbia.
I would ask the Hon. Member if he has examples of how lower interest rates could be used by people in the free market, as well as with the aid of Government, to meet directly the employment needs of some of the people of British Columbia.


Ian Gardiner Waddell: Mr. Speaker, I thank the Hon. Member for his question. Our big problem in British Columbia is that we have not diversified our economy which is still concentrated in mining, forestry and so on. We also export raw materials. When those industries are all right we have boom times, but when times are bad that is when we have bust times.
Increasingly, with other competitors across the world, those good times will not come back. We have to diversify our economy. We have to produce some of our mining machinery at home and sell it to the world. Similarly, with our forest industry, and so on. We have to develop some type of manufacturing industry to provide for our local people, and to use our raw materials and export those raw materials, especially to the Asia-Pacific market. There is a regional strategy for the Pacific region that makes sense.
It cannot be done when high interest rates are skimming off money and investment, and basically putting it in the hands of the big banks on Bay Street. We know that the Prime Minister and the Leader of the Opposition (Mr. Turner) are basically two boys from Bay Street, both corporate lawyers who represent the interests of the big banks and the big companies. Whether it is a Liberal or a Conservative Government, that is why we will always have high interest rates and policies that will not be for regional development. With the policies that we prefer, led by lower interest rates and by encouragement for regional development and stimulus in using the powers of the Government of Canada, we can have development in the riding of the Hon. Member for Spadina (Mr. Heap), and we think we can also have it in my riding in British Columbia.
If there was a New Democratic Government in this country, there would be a fair system of taxation, and there would not be one food bank left in the country.


Mrs. Sheila Finestone (Mount Royal):: Mr. Speaker, in taking part in the debate today on Bill C-209, which is an Act to provide a borrowing authority, I am somewhat amazed that the Government would expect those of us in the House, and Canadians in general, to accept the fact that it was going to ask to borrow $25.3 billion without even telling us what it is for. When most individuals in this House, and most Canadians throughout the land go to a bank, they do not get a blank cheque until they have some reason for borrowing the money. We should not be offering the Government a blank cheque until we have seen the Estimates and know exactly where it intends to spend this $25.3 billion.
Debate on this Bill coming directly after Wednesday's Budget heightens my disappointment with the performance of the Government, its spending, and taxation proposals. The Budget is certainly one of missed opportunities. It could
February 12, 1988

certainly have done some good for Canadians in promoting job creation and in fairness, the types of things that we think would be fair and equitable from a balanced Canadian view, and which would enable people to live with a great deal more security in this country.
Through this Budget, the Tories have demonstrated their lack of deep commitment to the cultural community activities. Today that is what I wish to focus on in attacking and asking the Government to take a look at where it will be spending the $25 billion extra that it will borrow. 1 want to know where it will be put, and in particular I would like to address the whole area of the cultural community. That is a very large constituency. They are the people who help to define us, explain us, and speak to us and for us in a very significant way.
I wish to point out that, for the cultural sector of our society, the November, 1984 economic statement presented us with $122.5 million in major cuts to all levels of federal expenditures. If that wasn't bad enough, and indicated their strong and deep commitment-if you pardon the sarcasm-to the cultural industries, let us take a look at what was done in May,
1985.	I guess the Government was embarrassed because that community was spared any further cuts. However, in February, 1986, the Government started to repay for some of its sins of omission and it gave an allocation of $75 million over the next five years through dedicated programs. In 1987 there was absolutely no attempt at restoring the Government's earlier cuts. Now in 1988 in this Wilson Budget, we are told that there will be further reductions of $300 million in annual expenditures, but we do not know exactly where.
We do not have any details or explanations. The question is, will it be straight cuts and reductions across all programs and agencies? Will that be the fair approach, or will the Government pick and choose its friends, its winners and losers, or will certain agencies and programs be singled out to receive higher cuts? I think that Canadians will have to look very carefully'at these Estimates and find out what the BBC boys and girls will be saying.
When I say the BBC, I am talking about the Back Bench Club who have some very interesting views of society. I would say dinosaur views.
Let us look at one particular area that seems of concern. The Government announced its intention to remove the provisions in the Income Tax Act that currently apply to the withholding tax to payments for the use in Canada of film and video tapes used in connection with news material gathered by foreign sources in our television programming.
At first glance this provision does not seem dramatic. It is the removal of a 10 per cent tax which provides the Government with somewhere around a million dollars. We do not have the actual figure. But this action will allow broadcasters an opportunity to obtain foreign news cheaper than at present.
Was this provision one that would assist the private sector in its bid for an all-news licence? I wonder if this was instituted
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as part of a side deal made with the Americans during the free trade talks in order that we could gather in more and more information from an American perspective. It is not American bashing, Mr. Speaker, that I am concerned about. It is the assimilation of American lifestyle, thinking, and action as the only way to look at the world. We are not Americans. We are Canadians. We have our own perspective. We have our own sense of what is right and wrong. That is what we want to see on our film screen. When we turn on the television set to watch the news, we want to see Canadian news from a Canadian perspective.
By removing the 10 per cent tax on films and videos that come from the United States, instead of encouraging an indigenous Canadian industry to flourish, in essence the Government has not contributed in any way to Canadian culture. It has only promoted the whole eyes and ears of Americans focusing in on Canada, absorbing their perspective, their viewpoints from their history and from their values. If that is a contribution to Canadian culture, then I believe that it is not the way that one would want to serve Canadians and Canadian values, and particularly Canadian sovereignty.
If the Minister of Finance (Mr. Wilson) was asking to borrow $25.3 billion and he included some expenses for some of his Party's commitments, then perhaps it would not be so discomforting or incompatible with the verbiage and the rhetoric to which we have been subjected since 1984.
Let us take a look at what the Tories had to say to us during the 1984 election when they made those wonderful strong commitments to Canadian culture. I would remind all Members who were Progressive Conservative candidates that six commitments were made in this area, together with the 360 some odd that were made in general.
The first was to maintain federal funding of cultural agencies in line with inflation. The second was to provide real growth in federal contributions to the cultural sector. The third was to look for other sources of funding for the arts councils and the cultural agencies such as tax credits. The fourth was to look for further financial assistance for the cultural sector by widening the sorts of enterprises which qualified under investment incentive criteria. The fifth was a thorough examination of cultural agencies such as the CBC, Telefilm, and the National Arts Centre. That was done through the Nielsen study and a few other studies, which I will come to. The sixth was the commitment to traditional arm's length relationships between Government and the cultural agencies. Let us see how the Government met its promises, its rhetoric, and its commitments.
First, in respect of the maintenance of federal funding and the provision of real growth, neither of these commitments has been met. In fact, the reverse has happened. In the 1984 economic statement there was a total loss of $122.5 million to the sector, and cultural agencies parliamentary appropriations

February 12, 1988
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have not kept pace with inflation to this day. In 1987 the National Arts Centre received an actual 4.1 per cent decrease in real terms in its parliamentary allocation. In 1987 the Canada Council received a .1 per cent decrease in its appropriation. The CBC, our major cultural agency, suffered a staggering decline of 13 per cent in its spending since this Government took office. The amount of money available to the CBC today is only 87 per cent of what it was in real terms when this Government took over.
Instead of trying to stab it, snub it, or snuff it, I would suggest that the CBC be looked at and accredited with the incredible growth and development of all arts and cultural personalities and products in the country. Where else was there to grow and to be a national instrument which encouraged the development of Canadian talent in all sectors of cultural interest and all key support sectors such as film crews, editors, writers, creators in every field?
In that sense we can forget about the first two commitments. Let us turn to the third and fourth commitments, incentives to new funding sources. To this I can only say that instead of looking for new sources of funding, once again they have chipped away at existing provisions. This time it was at the 100 per cent capital cost allowance for films, which was finally enabling risk capital in a productive way. I have heard some people say that they were producing schlock or high art. Well, we should have the right to do all that here in Canada. If there are people who have the ability and foresight to see that this is a very good industry for Canada, they should be encouraged to do so. Instead the 100 per cent capital cost allowance for films was reduced to 30 per cent. That is no incentive. We can do better with mining shares.
Along with this situation we have the Government's inability to produce Canadian film legislation that will recognize Canadian film rights and give us an indigenous industry. This cut, along with some of the other things the Government has done, is putting the nail in the coffin of ever being able to develop a film industry indigenous to Canada. It is bending to American will, the voice of Jack Valenti whispered strongly into the ear of Ronald Reagan.
Turning to the fifth point, they wanted to do a thorough examination of cultural agencies, such as the CBC, Telefilm, and the National Arts Centre. Well, they have done that. The former Minister of Communications certainly went out of his way on this promise. Let us remember the task forces-the task force on broadcasting at a cost of $2.8 million, the task force on national museums at a cost of $425,000, the task force on funding of the arts at a cost of $833,000, the task force on the film industry at a cost of $134,000, the task force on the National Arts Centre for $319,000, and the task force on the status of the artist at a cost of $50,000. Of course these are in addition to the Nielsen task force. In three and a half years of Conservative Government, there have been six major task forces and many other studies undertaken at a total cost in excess of $4.5 million.
What have been the results? Not only did the task forces make very credible suggestions to the House for consideration and action, but the Standing Committee on Communications and Culture tabled approximately 11 reports in the House. We have talked to the federal museum policy, the National Archives issue, and the Canadian broadcasting policy, but the Government has not cared to look at a single issue that we addressed. They have been ignored. If some of the Government's borrowing funds go toward meeting the needs addressed in the $4.5 million worth of study, not to speak of the cost of running the parliamentary committees and the open hearings we have had, at least then I would feel that we were a little better protected.
What about the last commitment, the commitment to the traditional arm's length relationship between government and cultural agencies? If the recent interference in the CRTC licensing of the CBC all-news service is arm's length, then I would suggest that the shoulder is moving down to the wrist. We have seen the most interventionist action ever in respect of the independent Board of Directors of the CBC, careful research, open hearings, and decision making of the quasitribunal members of the CRTC.
If. instead of spending some $11 billion or $12 billion on nuclear submarines, the Government could have taken action in a few really concrete ways, we would have had something more exciting to present to the cultural sector.
I have a few suggestions for the Minister of Finance before he prints his Estimates for artists and individual creators. 1 would suggest that the Income Tax Act be amended to define the term "professional artist" in line with the criteria set out in Revenue Canada's interpretation bulletin IT-504 and to define such other related terms as might be required. The standing committee made this recommendation to the Government as has. the arts community over past years. The basis of the recommendation indicates that we should recognize artists in a defined class. We should not leave them to the whims of the court. They should be given special recognition under the Income Tax Act, and the definitions in IT-504 should be used as they are acceptable to the arts community and to Revenue Canada. They could certainly be used to have force of law protection for the artists instead of having them subject to whims and interpretations which are not always fair and well guided.
For the Government to do this would not be very difficult. The work has been done. The definitions are there. Current administrative criteria and recasting them for inclusion in The Canada Gazette would entail no new policy decisions. It would just be an adoption of new language which is seemingly difficult for the Department of Justice to put together. However, none of it is really that technical. From the point of view of the arts community, this approach would mean that the definitions would have status and would have far more authority than mere administrative guidelines. Further, the applicable guidelines could be cited in a court and could then
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be used in decisions which might be difficult to arrive at under present guidelines, if they were embodied in the statute.
Frankly I find unacceptable the removal of the right of professional artists to use block averaging and the modified accrual basis of accounting. In June the Government proposed abolishing all averaging provisions. Mr. Speaker, are you indicating that I have one minute left?


Mr. Deputy Speaker:: Today.


Sheila Finestone: I will finish this thought and I will continue with pleasure the next time the matter is before the House. Also the Government proposed to erode significantly the ability of farmers to use the modified cash basis of accounting. It was able to do that for farmers and able to allow them to block average up to another five years with blocks starting in the 1987 taxation year. Unfortunately the rationale for abolishing averaging was based upon the argument that since there were only three tax brackets under the proposed system, averaging would not be needed. However, minimal calculations indicate that taxpayers in general and artists in particular with fluctuating incomes will fare much more badly under the new system than those with stable incomes.
The arts community feels strongly that it needs some sort of averaging system in the name of equity, but the Government has not seen fit to take any concrete action. I would be pleased to return to these issues; thank you very much.


Mr. Deputy Speaker:: It being 2 p.m. the House will now proceed with the consideration of Private Members' Business as listed on today's Order Paper.


PRIVATE MEMBERS' BUSINESS-MOTIONS   PEACE-MAKING ADVISABILITY OF ESTABLISHING TAX CREDIT
James Douglas Manly: That, in the opinion of this House, in pursuance of a stated policy of peace and peace-making, the government should consider the advisability of establishing a 100 per cent tax credit which would allow residents of Canada who pay income tax, to transfer a portion of their tax to recognized Canadian or International agencies which conduct peace research, peace education or development projects aimed at promoting peaceful understanding in regions of conflict, such credit to be 100 per cent of the amount so transferred up to a maximum of the percentage of the national budget allocated to defence which is projected at 9.39 per cent for the coming year.
He said: Mr. Speaker, I appreciate the opportunity to speak on Motion No. 112. The effect of this motion would be to allow Canadians who pay income tax to transfer the portion of it which normally would go to defence purposes to a fund or
Peace-making
series of funds that would be recognized by the Government and devoted to peace purposes, peace education, peace research or some kind of development program that would encourage the peaceful resolution of conflict in other parts of the world. This is the third time I have raised a motion similar to this for debate in the House of Commons.
Is is an idea that will some day be turned into reality. I hope that someday we will be able to turn it into reality in this House of Commons, perhaps even today if Members opposite are willing to consider this on its merits.
It is an idea that is being considered by people around the world as an alternative to the unacceptable measures of militarism which are not leading to peace and security in the world today. It is an idea that we recognize is never particularly popular with the Government. It was not acceptable to the Liberal Government-


Mr. Dick:: Has anybody passed it in the world yet?


James Douglas Manly: Nobody in the world that I am aware of has passed it. That does not mean that it is not an idea that has merit. The fact that nobody before Galileo and Copernicus recognized that the world was round did not mean that it was flat, did it? The fact that nobody in the world has passed this yet does not mean that it is not a worth-while idea.
There are two reasons behind this motion. First, it is to give effect to the concern of Canadians for freedom of conscience. Freedom of conscience is recognized in our Charter of Rights and Freedoms. Second, it is to provide an alternative to militarism. I would like to speak about both of these in turn.
Freedom of conscience is the first freedom that is guaranteed in the Charter of Rights and Freedoms. Yet we have never really defined what it means to Canadians. There is no question of conscience that is more central to people in Canada or anywhere else in the world than the relationship of individuals to the state, particularly with regard to the question of waging war.
This particular relationship of conscience has a long history. Dr. Jerilynn Prior is one of the people who is in the forefront of the struggle for freedom of conscience. She has appeared before the courts on this issue and has laid before the courts a document entitled Peace Testimony of the Society of Friends, a declaration the harmless and innocent people of God called Quakers presented to Charles II in 1660. This declaration reads:
WE UTTERLY DENY all outward wars and strife, and fightings with outward weapons, for any end, or under any pretence whatever; this is our testimony to the whole world. The Spirit of Christ by which we are guided is not changeable, so as once to command us from a thing as evil, and again to move unto it; and we certainly know, and testify to the world, that the Spirit of Christ, which leads us into all truth, will never move us to fight and war against any man with outward weapons, neither for the kingdom of Christ, nor for the kingdoms of this world.
This declaration made before Charles II was backed up by the lives of the Quakers, the Society of Friends, who refused to

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Peace-making
go to war. Many of them were willing to go to prison rather than to go to war.
There are other historic peace churches including the Mennonites and the Hutterites who have had a long history of refusing to be involved in militarism. Canada has recognized that right over the years, particularly during the First World War and the Second World War when we recognized the status of conscientious objector. People who, on the basis of conscience, declared that they could not go to war were able to register as conscientious objectors and were put to some other useful work in the world. These people made a great contribution. No one can accuse them of cowardice or of not being good citizens. Rather, they are the very best of citizens because they see that good citizenship entails acting within the dictates of one's own conscience. They refuse to let their conscience be commanded by any state.
We are now dealing with an extension of the principle that people should not be forced to go to war against their conscience. We extend that to the principle that they should not be forced to pay for war or militarism against their conscience. In order to give effect to that, there is an organization called Conscience Canada which, over the last five years, has set up a peace tax trust fund in which people are encouraged to put that portion of their taxes which would normally go for defence purposes. Over the last five years, some 370 people have placed over SI09,000 in that trust fund.
Perhaps we could get a better idea of what these people are thinking if 1 read from letters written by some of them. Mr. Wolfgang Blach of Montreal writes:
I am doing this because I cannot agree to participate financially in the preparation of war, even indirectly through taxes. I also hope that this will press your government and mine to legislate provisions which would make this procedure official. Until that time 1 have to base my action on the Charter of Rights' freedom of conscience guarantee.
Proposals to this effect have already been tabled in the House of Commons. It has not been taken seriously, probably because it came from across the floor. Please do not play war games in the house. If you think the proposal is inadequate, suggest amendments, but I urge you to at least consider such a bill with all the seriousness this non-partisan issue warrants.
Another letter came from D. Craig Summers of Kingston, Ontario, who writes:
Nuclear weapons scare me. They have made our continued existence on Earth more precarious than when there were none. The present push by our "neighbours" to the south for a Star Wars safety shield also escalates our danger. Furthermore, the testing of US submarines at Nanoose Bay, BC, and the production of Cruise Missile components at Litton Industries in Toronto exemplify Canada's involvement in preparations for mass destruction. This is unacceptable, and the list goes on and on.
Peace and international security will be found in equally sharing the vast resources of our earth, not through the most powerful nations coercing people into paying for military systems which threaten to destroy all of us, in order to maintain their political advantage and control. By paying taxes to the military,
I feel as if I am killing people myself. In good conscience, I cannot allow my taxes to support such madness.
Dr. Jerilynn Prior who, as I mentioned earlier, is involved in a test case before the courts right now, said:
As a person of conscience who would refuse to fight in a war on moral and
religious grounds, I also refuse to pay for war on the same grounds. My
constitution allows me freedom of conscience.
As I mentioned earlier, this is an international movement. It involves Canada, the U.S., Australia, Japan, and a number of western European countries. The people involved are not seeking to evade their responsibilities as citizens of nations where the peace tax movement is growing. Rather, they want to meet their obligations as citizens in a way that does not do violence to their conscience.
Second, I want to speak to this motion as an alternative to the growing militarism of our world. There is no reference in the motion to questions of conscience. It is an open-ended motion and if the Government wants to take a very strict approach to this, it could bring in legislation that would make a peace tax credit available only to people of conscience who, on that basis, could not pay taxes that would be used for military purposes. It would be a measure that limited a peace tax credit only to people who objected on the grounds of conscience. That would be a noteworthy first step which I would welcome. Indeed, I would prefer to see a much more open proposal from the Government. There are people like myself who are not opposed on the strict level of conscience to any payment of taxes used for the military. I am not opposed to that personally. However, I am concerned about developing alternatives to the growing militarism that we see in Canada and around the world.
One of the concerns I have about the Mulroney-Reagan trade agreement is found in Article 2003 which exempts so-called essential security interests from the provisions of the deal. What that means is that Canadian programs to help the different regions, economic programs for the Maritimes, for example, or the North, can and will be subject to American pressures and could be ruled to be unacceptable subsidies. The American tradition of providing help for the regions through defence procurement contracts will be completely exempt from the provisions of the deal. That means that if Canada wants to offer some kind of help to its regions, it is going to be more and more pushed into taking the same approach and using military procurement contracts and defence industries as the one acceptable way under this trade agreement of getting aid out to the different regions.
This is one more way in which we see the growing militarization of the Canadian economy. We can see the same sort of thing on a global scale. In an address as President of the United States, Dwight D. Eisenhower said:
Every gun that is made, every warship launched, every rocket fired, signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and not clothed.
He continued:
This world in arms is not spending money alone; it is spending the sweat of its labourers, the genius of its scientists, the hopes of its children.
February 12, 1988

If anyone knew the reality of war it was President Eisenhower. He had been Supreme Commander of the Allied Forces during World War II. He spent his life in the American military. Yet he thought it necessary to warn about the danger of the military industrial complex and point to the danger of growing militarization.
We can look at what that kind of militarization does to the world's economy. The Brundtland report entitled "Our Common Future" has a whole chapter on peace and security. It points out that in 1985 the world spent well over $900 billion for military purposes. Today it would be over $1 trillion, or more than $2.5 billion a day. The report says:
The real cost is what the same resources might otherwise be used for:
An Action Plan for Tropical Forests would cost $1.3 billion a year over the course of five years. This annual sum is the equivalent of half a day of military expenditure world wide.
Implementing the UN Action Plan for Decertification would cost $4.5 billion a year during the last two decades of this century-the equivalent of less than two days of military spending.
One of the greatest environmental hazards in the Third World is lack of clean water for household use, contributing to 80 per cent of disease. The UN Water and Sanitation Decade, although given only a small fraction of support needed, would have cost $30 billion a year during the 1980s. This is the approximate equivalent of ten days of military spending.
To supply contraceptive materials to all women already motivated to use family planning would cost an additional $1 billion per year on top of the $2 billion spent today. This additional $1 billion is the equivalent of ten hours of military spending.
That is a distortion of world spending and it does not bring peace or security any closer. Quite the reverse. In the meantime, these other urgent needs are being neglected.
Surely there has to be some way for individual citizens to stand up and say to Governments that this stupidity has to stop. That is what this peace tax is all about. Militarism does not contribute to global security but to global insecurity. The intermediate missile agreement under which the U.S. and Russia agreed to scrap missiles contributed more to the peace of mind of the people of our world than all the billions of dollars spent to create those missiles in the first place. They are destroying something they built in order to guarantee peace in the world, yet the destruction of those missiles is the best move toward peace we have seen in recent years. Surely we should be able to grasp the irony of that situation. Yet we madly continue on this thrust to spend more money on militarization.
Veterans Against Nuclear Arms have emphasized the need for our world to develop an approach to common security. They have pointed to the folly and futility of our Government's policy of purchasing nuclear submarines. This is just not the answer to Canada's security needs. We need alternatives. No Party and no Government has a monopoly on stupidity or folly. Whatever Party is in Government, there has to be some provision so that individuals across Canada can suggest alternatives. That is what this motion does. It gives people a chance to vote with their money for some reasonable, sensible alternatives to growing militarism.
Peace-making
In conclusion, some people have raised the floodgate argument. If we have a peace tax provision, they say, it will open the door to all kinds of other special interest groups who will want an exemption from the tax. I would like to suggest two answers to that. First, we are talking about specific legislation for the peace tax. How many other issues would arise causing this particular kind of crisis of conscience? Perhaps one or two, I do not know. However, let them be debated and treated on their merit. Let us treat this issue on its merit.
Second, what would be so wrong in building flexibility into our tax system? We already do it for businesses. We do it for political Parties which get tax credits. We do it for charities. Why not for issues of conscience? We are talking about a policy of small steps where the people of Canada who believe in this approach would want to take the small step of working with some peace group to develop alternatives to militarism. In place of the present system I urge the Government to recognize the rights and conscience of the Canadian people and to recognize the contribution they could make to Canadian security if this measure was enacted.


Pierre H. Vincent: Mr. Speaker, I am pleased to have this opportunity to express my views on the motion of the Hon. Member for Cowichan-Malahat-The Islands (Mr. Manly), especially after having heard his arguments and comments on the motion. I might start with the suggestion that a 100 per cent tax credit be given to individuals, so that they can contribute part of their tax to peace organizations. Maybe we could start by having a look at the present tax system which allows charitable donations up to a maximum of 20 per cent of taxable income. Starting in 1988 the new system will allow a tax credit of 17 per cent on the first $250 given and 29 per cent on any amount above that.
As you know as well as I do, Mr. Speaker, for Canadian taxpayers a tax credit is preferable to a deduction, I would even dare say "more profitable". We know that charitable organizations will profit from these tax credits the same way they were benefitting from deductions. I would venture saying that peace is an objective, if not the first at least a secondary one, of several charitable organizations.
We also know that, if they so wish, Canadian taxpayers can contribute to the United Nations. There again, such contributions will be treated the way I mentioned. There is no doubt in my mind that the basic principle behind the United Nations, and its main objective, is the promotion of peace. So I think that Canada is very well covered in that respect.
I heard my colleague talk about extending that amount to peace organizations and maybe two or three other about which we do not know yet but they will eventually be identified. At the same time, he asked for more flexibility into the Canadian

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Peace-making
tax system. Instead of flexibility, Mr. Speaker, I believe that when introducing his tax reform last December, the Minister of Finance (Mr. Wilson) has brought us more simplicity. If ever this Governement or this Parliament decided to strike a peace tax, plus other taxes concerning the two or three other elements that my colleague talked about, saying he did not know what they were but that, at some point, suggestions would be made to that effect, we would embark in a tax system that instead of being simplified would be once again far more complicated, and that is precisely what we do not want and precisely why we have been presented a corporate and personal tax reform.
As you know, Mr. Speaker, the previous Liberal Government used to enjoy bringing into every Budget seven or eight new measures that would further complicate the system, and introducing into the Income Tax Act all kinds of social measures, measures affecting culture, regional development and so on, none of which would properly fit in an income tax legislation.


Marcel Prud'homme: As a future Minister, try to be more generous.


Pierre H. Vincent: Mr. Speaker, I am happy to see that my colleague-and I will not say that he is the only Liberal Member present in this House, but my colleague the Hon. Member for Saint-Denis (Mr. Prud'homme) is listening with interest to what is being said and is eager to take part in the debate. I therefore invite him to join the debate-


Marcel Prud'homme: As a future minister, you might show some degree of elegance!


Pierre H. Vincent: -I am inviting him, Mr. Speaker, to join the debate immediately after I have completed my comments on the motion by the Hon. Member for Cowichan-Malahat- The Islands (Mr. Manly).
Mr. Speaker, as I was mentioning, the Income Tax Act is meant to raise money, however distasteful that may be; I know that it is not something you like, and I do not like it either! However, income must be collected so that it can be redistributed to Canadians.
The Act is not meant however to foster cultural or social development-that is not the purpose of the Income Tax Act. There are departments and ministers of the Crown working just for that purpose, with budgets just for that.
Mr. Speaker, once again, we are opening a door without knowing where it will lead us. Even my colleague mentioned that there might be other sectors, two, three, four or five, and for what purpose? Mr. Speaker, I do not think that this is something we can afford.
And there is the other question which my colleague has not discussed and which I would have liked him to address: How would these organizations which promote peace be defined?
Mr. Speaker, you can readily appreciate that confronted with this kind of question the Canadian Parliament would be hard pressed to define "organization representing or promoting peace".
There are 282 Members in this House, Mr. Speaker, and I am convinced that if they were asked to come up with a definition there would be just as many answers. You can imagine the mess we would be in!
Again, Mr. Speaker, keeping in mind the fact that you may make a tax deductible contribution to United Nations-registered charitable organizations and claim a tax credit beginning in 1988 . . .
Yesterday, Mr. Speaker, I had the pleasure of meeting with 120-odd students from Trois-Rivieres' Keranna School. These young girls came to Ottawa to see their Member of Parliament, of course, and we exchanged views concerning weapons, Cruise missiles and other issues of great interest to them. I told them that Canada's policy is to promote disarmament. I think that Canada is making a worthy contribution to support disarmament on the international scene, and hopefully time will come when people the world over will be talking about peace.
That is pretty well along the line of the motion introduced by the Hon. Member. We have accomplished a lot of work on the international scene, and we will continue to make progress in that field.
The Hon. Member advocates a special tax or a deduction for peace, it does not matter how he calls it, but the system is already in place. When it comes to disarmament Canada has made a name for itself in international quarters, Mr. Speaker, and I would suggest that we should not make any attempt to change a system which operates quite well and gives good results.
Mr. Speaker, instead of adopting the motion I think it might be a good idea to enquire whether the Hon. Member might have questions or comments concerning the point I have just raised.


Dave Nickerson: Mr. Speaker, the proposal put forward today by the Hon. Member for Cowi-chan-Malahat-The Islands (Mr. Manly) has an amazing principle involved with it. What he is really saying is that the Government should have the right to set tax rates and to determine how much might be payable by any one taxpayer. It is that taxpayer who is to determine how that money is actually to be spent. The taxpayer will instruct the Government how his or her tax dollars are to be spent according to his or her wishes.
The administrative problems alone, Sir, would be almost insurmountable. This is against the very purpose of the state's existence.
February 12, 1988

Why we as human beings have arranged our affairs so as to have various countries, varies states and provinces is so that we can undertake collective action on behalf of us all. In the perfect scheme of things, I suppose one would not need the state. The state would wither away, as has been suggested by people at certain times. But the simple fact of the matter is that, particularly for reasons like national defence, we need the institution of the state. I will return to this idea a little later in my dissertation.
If we were to let the Member get away with his suggestion this afternoon, what about the other side of the coin? Can we apply it vice versa? The Government of Canada spends a lot of money in the promotion of peace right now. A lot of our diplomatic efforts are designed for that end. We spend over SI billion on things like CIDA to try to promote peace and development throughout the world. What if someone objected to that and said they did not want their money spent on diplomatic peace initiatives or on CIDA, but preferred to have their tax money spent on armaments? Would we allow that? It is exactly, precisely the same argument.
In the very unlikely event that the NDP ever forms the Government of Canada, which I do not think will happen, what would happen? As I understand it, one of the first things that the NDP would do is institute a system of abortion clinics throughout Canada, paid for by the state. This is the goal that the Hon. Member supports. I do not know how he squares that with his conscience, but it is something that I could not support, in my conscience.
He spoke at length about freedom of conscience when he proposed his motion. If, God forbid, the NDP did come into power and did institute that, would it be possible for people to refuse that their taxes be used for that purpose and to declare that they want their taxes used for research on better methods of birth control? Is that what the Hon. Member or the New Democratic Party wants?
I understand as well that if the New Democratic Party ever got into office they would like to implement nationalization programs. I understand they would like to nationalize banks and oil companies. That is completely contrary to the way I think, but should I, as an individual whose view at that time would not represent the majority, be able to say that I do not want my tax dollars used for that purpose? I do not think the Hon. Member for Cowichan-Malahat-The Islands would agree with that.
Let us consider the Canadian Broadcasting Corporation for a moment. I understand it uses about $800 million a year of taxpayers' money. Not all of us like all the programs that are put on CBC.


Marcel Prud'homme: Talk about the motion.


Dave Nickerson: I am talking about the motion, precisely those principles that are contained in the motion. If the Hon.
Peace-making
Member would care to listen more attentively he would find that out.
Should it be possible for someone to say: "I don't want certain of my tax dollars to be used by CBC to put Archie Bunker on TV because I would rather look at something else". Is that what the Hon. Member is suggesting? I am sure that he would say no. In a way, perhaps the answer to a question like that should be yes. I think there is a way that can be accomplished.
This leads me to the second point of my argument. I said before that the Government and the state is, of necessity, an instrument of coercion. It has to be in order to perform its function. It is important in areas such as national defence that all should bear a fair share of those necessary expenses.
However, when it comes to things like broadcasting, it seems to me that in those areas this is not necessary. If we have a free market in the maximum of areas, that is where we can have our individual choice. In my opinion, the state is involved in far too many things. The state should remove itself from many areas of human endeavour where it intervenes at present. That is how we can get an individual choice and have the concept of one dollar, one vote.
If the state was not involved in broadcasting a person could use his or her tax dollars that presently go toward the CBC to subscribe to the pay TV channel of his or her choice. In my opinion, that would be a good idea rather than letting the CBC and the state decide what is good for us to watch. People, themselves, can then choose. If people had the real choice, I wonder how many would prefer that their donation go to REAL Women, for example, rather than the National Action Committee where many tax dollars are spent at the present time.
How do we maximize individual freedom of choice, individual freedom of conscience as the Hon. Member supposedly would want to do? In my opinion, it is by minimizing the presence of government. That is the difference between the Conservative philosophy and the socialist philosophy. If the Hon. Member was really true to what he is saying, he would be running over to join us on this side of the House rather than sitting there with his socialist friends.


Marcel Prud'homme: Mr. Speaker, 1 must say that the considerations on this important subject have also given us a general overview of all other issues that attract the concern of Canadians.
I would like personally to congratulate the Hon. Member who presented this motion. The Hon. Member is a practical man, and he realizes his motion will probably never be implemented.
However, my reason for commending his proposal is that the Hon. Member gives us an opportunity to air our thoughts and consider some very important current issues. I agree there is a

February 12, 1988
Peace-making
vast difference between his views and the views of the Hon. Member for Western Arctic (Mr. Nickerson) who spoke earlier.

He said that is the difference between Conservatives and socialists. You may say that there is a difference between a progressive and a conservative. I do not understand why we should put abortion in this debate because to go through an abortion is such a painful and agonizing decision for a woman. I do not see why we should put that into a debate of the kind we have this afternoon, even though I totally disagree with the people who, after the Supreme Court judgment, celebrated with champagne because they won. I do not know what they won. I think this question is too painful to celebrate the decision of the Supreme Court of Canada.
On the subject matter raised by the Hon. Member, I want to say that I am extremely interested. That is why I stayed this afternoon.

-because the Hon. Member has once again given us an opportunity to reflect-as I am very fond of doing myself-on issues that should be very important to us, and I am referring to peace and security.
The Hon. Member for Trois-Rivieres (Mr. Vincent) said that Canada made its mark thanks to similar initiatives. 1 knew Mr. Pearson. I was elected under Mr. Pearson. I was elected under Mr. Trudeau. I am not a disciple of either man, even if I was a Member of Mr. Pearson's Government, but I have great respect for these two great Prime Ministers who have left their mark on the people and the youth of my generation by stressing the importance of these concerns.
In fact, I was Chairman of the Committee on Foreign Affairs and National Defence which had the privilege of reporting to the House on the last day the previous Liberal Government was in power. On Mr. Trudeau's last day as Prime Minister, I had the honour of reporting back to the House-in time, I may add-on a Bill he was very anxious to see adopted, and I am referring to the Bill to establish the Canadian Institute for International Peace and Security. 1 would urge Hon. Members to read Hansard, both for the remarks made by the Hon. Member-I will call her Ms. Jewett, because you know I don't like calling people by their riding, although I realize it is against the Standing Orders

 and for what Mr. Trudeau had to say that day.
So if young Canadians would like to read an interesting debate, they should look at what was said on June 27, 28 and 29, 1984. These are approximate dates, Mr. Speaker. These debates led to the establishment of the Institute for Peace and Security. For the benefit of the Hon. Member who spoke before me, I would say this proves that the previous Government was concerned about both security and peace problems in the world.
I do not see why the Hon. Member should be blamed for forcing us, on a Friday afternoon when most Members have already made a hasty return trip to their ridings, I hope, not on holidays ... I for one will be in my riding all week .. . but to meet with our constituents during the mid-winter break. Like you, Mr. Speaker, I will go to my riding, but I know one thing, namely that the issue is important enough to justify my staying here late into the afternoon, to force us together openly in front of Quebecers who are listening to me-

-in front of Canadians who should be interested in this question of peace and security and how to achieve it. So I am certainly not going to blame the Hon. Member for obliging some of us to reflect on how we could help to find a solution to the problems of tomorrow.
We live in a world of pure madness where more and more and more we believe we can create jobs by spending billions of dollars on ammunition. When we talk about a few million dollars, a few hundred thousand dollars, we should reflect on how to use the money to find solutions so that people in the world can live with each other. We must find solutions in the Middle East so that the Palestinians can also be recognized as men and women with a passport, so that Iran and Iraq can stop this unbelievably stupid war provided so gently by the billions of dollars of armaments they buy in the west.
Therefore, I will not blame the Hon. Member for obliging me to reflect on how we can find a solution. He is putting forward a very good resolution. He knows it will not take place, I regret to say, but at least he is putting something forward. He is obliging us to reflect and admit that the world is going crazy. Money, money, money. Nuclear submarines. Everyone says they want them built, but one person will say to build them in Quebec and another will say to build them in the Atlantic provinces.
As I look at my hon. friend from western Canada, the Hon. Member for Capliano (Mrs. Collins), who I know would like to participate in the debate, I think she would say: "No, no, they should be built in my part of the country''. But there should be some young people who say: "You politicians, instead of asking where will they be built, is there not one of you who will say, should they be built?"

That is important to me, Mr. Speaker. You see, they argue to find out who will build more and more, always more and enough to kill one another 1,000 times over. Well, I like people who say: Is there no alternative, could we not get together and try to find fresh approaches just so people will get better acquainted? I am one of those who passionately believe in what Mr. Gorbatchev is trying to do-and many of my colleagues will probably be shocked. Mr. Gorbatchev is advocating a major policy of glasnot, a policy of openness. I have very cynical colleagues in all political parties who tell me:
February 12, 1988



All this is bluff. I said last night to someone from the Soviet Embassy that if it is bluff, I call his bluff and we will see. If it is bluff, if it is not genuine, there will be politicians who will revert to the good old days of the cold war. But a Member of Parliament on a Friday afternoon before adjournment asks us to reflect on a proposal that is quite complicated-he must admit that himself. In order to force us to reflect, he has to propose something. This is what the Flon. Member has done. We could attack each other and be partisan about it. I did not want to answer Hon. Members who spoke point by point because, after all, we live in the British parliamentary system where people can and should have strong views on many issues. I, for one, instead of being partisan, want to thank the Hon. Member who made me stay here on a Friday afternoon, although in good company. Your company, Mr. Speaker, is always delightful, and I include the staff, the young pages and all my colleagues. I will reflect with the Hon. Member. We will pursue our journey toward a better understanding of the world in order to achieve a better world. That kind of proposal is the kind of proposal that deserves at least to be studied, and I thank the Hon. Member.


Daniel James Macdonnell Heap: Mr. Speaker, I am very glad to have a chance to speak in support of this motion. 1 recognize that the time is running short, and I will do my best to leave a share of the time for the Hon. Member for Capilano (Mrs. Collins) who, 1 understand, also wishes to speak.
The first point I wish to make is simply to reiterate the focus of this motion, which is 100 per cent tax credit to be transferred to a recognized international agency for peace. If it were enacted, this would be a democratic decision supported by a majority of Parliament, if it so decided, presumably with the backing of a majority of people in this country, and channeled into things that were recognized as peace activities. It would not be the whim of a private individual. However, what this proposal does is to raise a principle of the individual conscience, and of the right of the individual, which has a long history in western culture and in what we call our democratic tradition
In 1709, for example, the Quaker colony of Pennsylvania was ordered by the British Crown to provide funds toward the cost of an invasion of what we might have called French Canada. The Quaker colony of Pennsylvania refused to provide the money. I do not know the details, but I would imagine that in 1709 some Canadian lives were not lost because the Quaker colony of Pennsylvania refused what was then a lawful order of the monarch of Britain. What happened to the Quakers when they did that, I do not know. A couple of generations later there was a revolution in the Thirteen Colonies. I believe that Canada benefited because those Quakers disobeyed the British monarch.
Peace-making
Earlier there is the tradition that St. Hugh of Lincoln disobeyed one of the most famous British kings, Richard the Lion-Hearted, because Richard wanted money to go and make war against France. Whatever money St. Hugh of Lincoln did not give to Richard the Lion-Hearted, although he was disobeying the law and the king, probably saved some lives. We do not know whose ancestors those were, but I am glad that he did it. I am glad that there are those examples, and there are many others in history.
They have continued to the point where Archbishop Hantausen of Seattle in the United States has been charged with refusing to pay his taxes. He looks out of the window of his archiepiscopal office at the Trident submarine in the bay in front of him and he states, "That is offensive to human beings and to God. I will not give my share of my money to finance such an offence". He is breaking the law, but he is prepared to suffer for it. I thank God that there are people like that. Some people are in a position to do that directly. Many of us with tax deductions do not know how we could do it if we so decided, but at least this suggests the beginning of a development of that principle.
I want to move on to point out why people in a modern society may feel that the only equivalent they have to refusal to bear arms-which is a tradition that we do honour. We do exempt people who conscientiously refuse to bear arms-and why others say that their way of being forced to share in the killing is through their taxes.
This week many of us had the benefit and the pleasure of meeting with Veterans Against Nuclear Arms. This is an organization of Canadian veterans, many of whom served with distinction as officers, some of whom were decorated in World War II and in other wars.
They have asked us to consider the principle that the defence paper of the Hon. Minister of National Defence (Mr. Beatty) leads us into serious errors, for example, when it talks about having stable mutual deterrence through nuclear weapons. They point out that, with the airborne sea-launched and ground-launched long range cruise missiles, the Trident II and Typhoon submarines, the MX missile, and the planned Midget Man missile, the BI bomber, and so on, we do not have stable deterrence. We have more and more unstable deterrence. The refusal to help in building those is an act in defence not only of the safety of some foreigners, it is an act in the defence of the safety of Canadians. We would be the meat in the sandwich if there was a nuclear war.
The Veterans Against Nuclear Arms have also pointed out that the defence policy proposed completely ignores the United Nations. It abrogates blind support of NATO, ignoring the fact that NATO in its foundation undertook to be subordinate to the United Nations. One of the principles in its charter is that differences shall be negotiated rather than settled by force. That peaceful principle of negotiation has been ignored

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Peace-making
by NATO, and the United Nations is ignored by Canada's defence policy.
This week those veterans spent their time coming to Ottawa to remind us of some of our basic peace traditions. I believe that, whether they agree or not with this peace tax proposal, they are recalling us in the same way as did the Hon. Member for Cowichan-Malahat-The Islands (Mr. Manly), and the Hon. Member for Saint-Denis (Mr. Prud'homme). On one point, I would even agree with the Hon. Member for Western Arctic (Mr. Nickerson). If somebody stated that they did not want their money to go to an abortion clinic, but that they wanted it to be spent on family planning education or family planning facilitation, I could accept that. I think that that would be a sound way of allowing serious differences of conscience on important matters.
I hope that this peace tax proposal will be given serious thought by Members of Parliament on all sides.


Mrs. Mary Collins (Capilano):: In the few minutes left this afternoon to speak on this Private Member's Motion, I would like to make a few comments. In putting forward the motion, the Hon. Member for Cowichan-Malahat-The Islands (Mr. Manly) deals with two different issues. The first would allow for individual taxpayers to reallocate some portion of their income tax which would ordinarily go for defence purposes, and instead give it to peace organizations or those involved in overseas development.
In that respect, I cannot agree with the motion. We are all in agreement with finding ways to promote peace around the world. For many of us, that was one of the underlying reasons that we wanted to serve the Canadian public and be part of the parliamentary process. To provide a system such as the peace tax, as the Hon. Member proposes, would, in my mind, lead to financial chaos.
In our parliamentary system, usually once every four years, Parties put forward their programs, and suggest what their priorities will be and how they plan to allocate funds during the time that they are in office. The public is then aware and participates in a whole variety of ways in the development of legislative processes, as we had with the Budget yesterday, and that is the way that we decide on these types of issues and on the appropriate priorities.
1 know that my hon. colleagues from another Party will have different ideas about how we should allocate tax money and
have different priorities, as perhaps would Members on this side of the House. But to allow individual taxpayers to make their own decision, to have a shopping list on the income tax form where they check off if they believe in agricultural payments, or that they do not like this item, would not be a workable solution.
The recent court decision mentioned by my colleague upholds that point of view. In that decision, Federal Court Justice George Addy stated that this type of approach would lead to chaos. He told Dr. Jerilynn Prior:
There are practical obstacles to allowing Prior to withhold payment of taxes for defence purposes.
One can easily envisage government actions and policies-to which certain taxpayers and possibly a great number of taxpayers might conscientiously and out of deep and sincere moral and religious convictions, consider to be totally wrong, reprehensible, unjustified and even evil-
Justice Addy further stated:
One such issue on which public attention is being focused today is the extremely divisive question of whether public money should be expended for abortions.
If each taxpayer who might be conscientiously objecting to this policy was entitled by law to withhold a percentage of income tax, complete chaos would result and orderly government would break down.
Justice Addy went on to say:
-even if someone found that Prior's freedom of conscience was infringed by paying taxes for military purposes, the infringement would probably be justified as reasonable under Section 1 of the Charter, which guarantees the rights set out in it subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society.
Certainly, in my mind, this is an instance where that provision would come into play.
I had hoped to have a chance to talk about my own view of peace-making, but perhaps there will be a further opportunity to debate that issue.


Mr. Deputy Speaker:: The hour provided for consideration of Private Members' Business has now expired. Pursuant to Standing Order 42(1), the order is dropped from the Order Paper.

It being 3 p.m., pursuant to Standing Order 4 this House stands adjourned until Monday, February 22, 1988 at 11 a.m., pursuant to Standing Order 3(1).


[Stage Direction]
The House adjourned at 3 p.m.
[Stage Direction]

Monday, February 22, 1988
[Stage Direction]
Prayers