1988-02-29

[Stage Direction]
Prayers


Mr. Jim Hawkes (Parliamentary Secretary to Deputy Prime Minister and President of the Privy Council):: Mr. Speaker, pursuant to Standing Order 106(8) I have the honour to table, in both official languages, the Government's response to 149 petitions, Nos. 332-3538 to 332-3661 inclusive, 3323678 to 332-3685 inclusive, 332-3689, 332-3700, and 3323709 to 332-3713 inclusive.
1 would like to take the opportunity to point out that we have had parliamentary reform. It is the Government's responsibility to respond to petitions, hopefully within 45 days. In this group of petitions there are some that were presented to the House by the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart) on January 18, 1988, which is certainly within the 45 days, but they were certified on April 24 and May 8, 1986.
In the spirit of representation of constituents, I think it would be helpful if Members were to have petitions certified upon receipt and present them to the House in order that the Government has an adequate opportunity to respond.
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Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, I was seeking the floor on a point of order. It has to do with Bill C-204, coming out of the legislative committee.
The legislative committee completed its deliberations on February 11 and, after the necessary work was completed, it was prepared to report on Wednesday, February 24.
I would simply like to raise the issue. I hope that the chairman of that committee will be here at the appropriate time to present that committee report-as soon as possible. If it was to occur later in the day, I am sure that we would be able to receive unanimous consent to have it introduced at that time.
It is an important piece of legislation, it has gone through all the appropriate stages, and on a daily basis we are waiting for it to be presented.


Hon. Doug Lewis (Minister of State and Minister of State (Treasury Board)):: Mr. Speaker, 1 wish to advise the House that I have been in touch with the office of the Hon. Member for Sarnia-Lambton (Mr. James). He has been delayed in Toronto airport. He had intended to introduce the report today.
As a courtesy to my hon. friend, the House Leader of the New Democratic Party, upon the arrival of the Hon. Member or directly after Question Period, we are prepared to revert to presenting reports from committees in order to allow this report to be tabled in the House.



NATIONAL HEALTH AND WELFARE


Mr. Bruce Halliday (Oxford):: Mr. Speaker, I have the honour to present the second report of the Standing Committee on National Health and Welfare, in both official languages, dealing as it does with a reference from this House on the subject of family life education, a matter that was originally brought to the attention of the House by the Hon. Member for Scarborough West (Mr. Stackhouse).


Mr. Speaker:: Perhaps I could assist the Hon. Member for Kamloops-Shuswap (Mr. Riis) by thanking the Hon. Minister of State (Mr. Lewis) and by indicating to the House that it was conveyed to the Chair that the report would be brought forward this morning at this time. I am sure that something has come between that intention and the fact.
As long as there was consent, of course the Chair would be very much prepared to revert to receive the report later this afternoon.

February 29, 1988
Petitions


PETITIONS
Mr. Ernie Epp (Thunder Bay-Nipigon):: Mr. Speaker, it is my duty to present a petition from constituents of mine resident in the area of Red Rock, Nipigon, and Dorion, who have signed a petition protesting that the Conservative Government had no mandate from the Canadian people to conclude a free trade agreement with the United States.
They believe that the Prime Minister (Mr. Mulroney) promised, in the course of the bilateral trade negotiations, that Canadian sovereignty would not be compromised but that the trade deal negotiated by the Government actually threatens the very fabric of Canadian political and economic sovereignty by removing the power of the Canadian Government to control foreign ownership effectively, to develop Canadian energy resources in the best interest of Canadians, and to equalize opportunities among the regions.
Whereas the proposed trade agreement would deny Canada the policy freedom to determine its own economic future, the petitioners pray that the House of Commons might be dissolved so that the people of Canada would have an opportunity to accept or to reject this agreement with the American Government.


Nelson Andrew Riis: Madam
Speaker, it is my pleasure, indeed an honour, to present a petition on behalf of a number of constituents from British Columbia, pursuant to Standing Order 106.
They are concerned that the Government has no mandate from the people of Canada to conclude the trade deal with the United States. They believe that in essence the trade deal threatens the very fabric of our political and economic sovereignty since it removes the power of the Government to control foreign ownership in Canada effectively. Of course, it also limits our effectiveness to develop our energy resources in the best interest of Canadian citizens and causes real problems in terms of our ability to deal with regional economic difficulties.
They are asking Parliament to dissolve to enable the people of Canada to accept or reject the proposed trade deal during a national general election.


Mr. Rod Murphy (Churchill):: Madam Speaker, I also have the honour to present a petition, which was certified earlier this month by the Clerk of Petitions as being correct and in the proper form.
The people who have signed the petition express their concern with the Government's trade arrangement with the United States. They believe that the Prime Minister (Mr. Mulroney) did not receive a mandate from the people of Canada on this issue in the 1984 election, and they believe that the trade agreement negotiated by the Government threatens the very fabric of Canadian political and economic sovereignty
by removing the power of the Canadian Government to control foreign ownership effectively, to develop Canadian energy resources in the best interest of Canadians, and to equalize opportunities among the regions.
Therefore, the petitioners humbly pray and call upon Parliament to dissolve to allow the people of Canada the opportunity to accept or reject the trade arrangement through a national general election.


Mr. Howard McCurdy (Windsor-Walkerville):: Madam Speaker, it is with great pleasure that I fulfil my responsibility as a Member of the House to present a petition signed by a number of electors, which has been properly certified as being correct.
It, too, points out the danger to the Canadian future or Canadian destiny involved in the prospect of the bilateral free trade agreement signed by the Prime Minister (Mr. Mulroney) and the President of the United States.
The petitioners humbly pray and 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.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Frederick James (Jim) Hawkes: Mr. Speaker, question No. 250 will be answered today.


Mr. Redway: Since September 4, 1984, did the Department of National Revenue make grants and/or loans to persons or corporations, non-governmental organizations and governments within Metropolitan Toronto and, if so, in each case, in what amount and for what purpose?


Hon. Elmer M. MacKay (Minister of National Revenue):: The Department of National Revenue does not provide for nor support the making of grants and/or loans to persons or corporations, or any other entity.


Frederick James (Jim) Hawkes: Mr. Speaker, i ask that the remaining questions be allowed to stand.


The Acting Speaker (Mrs. Champagne):: The question enumerated by the Parliamentary Secretary has been answered. Shall the remaining questions stand?


Some Hon. Members:: Agreed.
February 29, 1988



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Friday, February 12, 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.
Mrs. Sheila Finestone (Mount Royal):: Madam Speaker, I should like to continue the debate on Bill C-109, an Act to provide the Government with a $25,300 million borrowing authority.
When I was addressing the Bill the last time the matter was before the House, I pointed out that the Government had failed to give arts and culture the kind of boost they need in terms of tax policy and, I would add at this point, in terms of the free trade negotiations.
Canadian arts and cultural industries deserve protection, not only for what they do in respect of our sovereign concerns but as well as for their importance to the Canadian economy and to employment. Statistics Canada has said that in 1987 the arts and cultural industries contributed $11 billion to the gross national product and that over one million Canadians drew income directly or indirectly from these industries, following a remarkable 90 per cent increase in the number of jobs in those sectors since 1971. It is mainly because of the social and cultural roles they play that these industries should have been better protected in the free trade talks.
To continue from the point where I was discussing what could have been the Government's economic thrust, I talked about the need for block averaging for artists, not just for farmers. In another area I was talking about arts organizations. They are designed to promote the arts and welfare of artists and should be accorded special status under the Income Tax Act, which would allow them to issue receipts giving tax deductions for gifts in the same way as registered Canadian amateur athletic associations do now. It is interesting that the Province of Quebec adopted a system akin to that recommended by the Standing Committee on Communications and Culture in January, 1987, but this system only applies with regard to Quebec organizations and Quebec taxation. Unfortunately no reference to this has been made by the Government in its White Paper. This issue still remains a high priority for the arts community.
In respect of money for national museums, two national museums are expected to open their facilities in Ottawa during 1988-89-the National Gallery and the Museum of Civilization. I had hoped that each of these museums would be adequately funded to meet the demands of the newer and bigger facilities and that consequently their acquisition budgets, particularly in the case of the National Gallery, would not be severely restricted. I had hoped that the Government would provide money for these important needs. Little did i expect that it would undertake to play a shell game and
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just move moneys within that pot. There have been no increases, just unfair manoeuvres which will negatively impact on other museums across the land. At the same time, the lack of concern and the lack of attention to the decision of the Cultural Properties Review Board respecting a piece of work by Gustav Klimt that the Montreal Museum of Fine Arts wished to purchase obviously indicates that the federal Government or the Minister missed the boat as they did not act on time.
In respect of Canadian programming on radio and television, it is essential to the enjoyment and development of our cultural identity as well as our sovereignty. Radio and television are the largest and most immediate distribution mechanisms for cultural products. I had hoped the Government would have provided increased funding for the CBC, the National Film Board, and Telefilm Canada for this purpose. These agencies are key to the development and strengthening of Canadian radio and television film production. The strengthening of these industries will become increasingly important as we forge closer commercial ties with the United States. Their success will depend on Telefilm Canada's reputation and stable funding.
Another aspect I had hoped to see addressed is with respect to a home for the National Archives of Canada, which is now in poor temporary quarters. It is short of space. Its archival holdings and its government records are at risk. These environmental conditions are not acceptable. We need to have a way in which to preserve our national heritage.
The standing committee has recommended that priority be given to the construction of a new facility which would meet the accommodation needs of the National Archives until the year 2010. It was the Minister's intention to move in that direction. I was disappointed to see that this was not found in the Budget or in the Minister's remarks.
In closing, I would like to quote Canadian publisher John MacFarlane who pointed out that it is important as a country to "make the distinction between importing merchandise and importing culture. Wearing foreign shoes and driving foreign cars won't make us any less Canadian, but without our own culture we're nothing more than a colony".
We cannot, it seems to me, preserve Canada's political sovereignty and cultural identity without protecting and developing our own cultural industries. They provide Canadian artists, creators and communicators with real and numerous opportunities for expressing and sharing their vision of Canada.
The closing ceremonies of the Olympics took place last evening. We all viewed its Canadian dimensions. Our Hockey Night in Canada and the Olympics are part of what make up the Canadian cultural milieu. I hope that we will give serious consideration to these matters as we look at the borrowing authority.

February 29, 1988
Borrowing Authority


Mr. Blenkarn:: Madam Speaker, in listening to the Hon. Member on the borrowing authority Bill which puts the country further in debt I was wondering if it is still the policy of the Liberal Party, and her policy as one who represents the riding of the former Prime Minister, to continue to borrow, borrow, borrow without end just because she has further demands and wants of the Government. It is as if we have a money tree out in the backyard from which we can pick further currency.
As the Hon. Member may, know there are further appropriations for culture in the budgetary figures handed down by the President of the Treasury Board (Mr. Mazankowski). I wonder why the Member demands insistently for more borrowing. Does she want the Bill raised to $27 billion or $28 billion? Is $30 billion too little for her? When will we see the end of Liberal demands to put the country into bankruptcy?


Sheila Finestone: Madam Speaker, the Hon. Member also had certain negative attitudes toward the capital cost allowance which was a way in which one could infuse risk dollars into the film industry. He did not care to support this measure to the degree I or the industry would have liked.
May I remind him that 60 per cent or more of the debt of the country has been accumulated under the management of his Government. If it would stop spending these incredible sums on nuclear submarines and put them where we need to place emphasis in Canada then we would be far better off. It is a matter of priorities. I find that the Government's priorities are not well directed.
If we accumulated a deficit in 1980, 1981 and 1982 1 remind the Hon. Member that the whole world was in a state of chaos and heading toward a depression. Canada did not have to put bread lines in place. But we now have bread lines, thanks to the management of his Government.


Miss MacDonald:: Madam Speaker, I would like to make a couple of comments. With regard to the Hon. Member's remarks, she takes a certain perverse delight in going about the country knocking Canadian arts and undermining Canadian culture. It is really a sad state of affairs when a Member of Parliament will not stand up in defence of Canadian arts, our artists and our creators.
This year in the Estimates $113 million has been added to the base budget of the Department of Communications and the portfolio. Some $53 million in additional resources will now be available to the Canadian Broadcasting Corporation. There is a 5 per cent over-all increase in the envelope of the Department of Communications and the portfolio. This means additional increases for museums, broadcasting, the National Archives and a number of other fields.
What is important to note is that since that time we have added an additional $8 million to the Canada Council so that it can meet with requests from across the country that are
coming to it. We have also allocated $8 million for the expansion of the Art Gallery of Ontario. This is a tremendous project which serves Toronto, Ontario and, indeed, the whole of Canada.
Two years ago on a five-year basis we added an annual increase of $33 million to the production of feature films and dubbing and to a series for television. This amounts to a total of $165 million over this period of time.
We have added substantially to the budget of the sound recording industry. This has allowed a great increase in the number of Canadian songs performed by Canadian artists and recorded by Canadian recording companies.
These measures are taking place. At the end of the last calendar year newspaper after newspaper made comments such as, "This is the best year we have ever had in Canadian publishing". "This is the best year we have ever had in film production". "This is the best year we have ever had in Canadian sound recordings". Artists are reiterating that all across the country.


Sheila Finestone: Madam Speaker, I suggest that the fine record that the Minister just read to Hon. Members has a great deal of substance to it. It is too bad that it was the previous Minister who brought in these measures and that this Minister has the worst record for interference and meddling in the cultural industries of any Minister in the history of the country.
I suggest that the Minister talk to representatives of the sound recording industry. She sent the Hon. Member for Don Valley West (Mr. Bosley) to defend her stand. It was interesting to note that his observations on her behalf were not well received by the sound recording industry. It is extremely unhappy with the lack of consultation and with the very poor performance of the Minister defending its place in the constellation of cultural industries in this land.


Nelson Andrew Riis: Madam
Speaker, I have been looking forward for some time now to participating in today's debate, for a number of reasons not least of which is the fact that the Government is now asking permission of Parliament to borrow $25,300 million. 1 suspect that for most people it is difficult to get their minds around what $25,300 million is. It can best be described as a substantial sum of money. I do not think anyone can begin to even comprehend the thousands and thousands of millions of dollars that we are borrowing for a variety of purposes. I would say that one of the reasons is that the Government does not have its financial house in order.
I want to explain why I think the borrowing authority simply betrays the inability of the Government to come to grips with some of the real problems facing our country. In my estimation at the top of the list is the deficit. I do not think the
February 29, 1988

Government has dealt with the deficit adequately. I do not think the Government has taken the necessary steps to reduce the deficit. This will create an incredible amount of indebtedness for future generations of Canadians. The best thing that one could say is that the increasing, spiralling nature of the deficit of Canada has at least been capped. During the Liberal administration, we saw the deficit escalate almost to the stratosphere. It just got totally out of hand. It rose out of sight and beyond all comprehension.
Quite frankly, I think that Canadians in general and even people who do not follow the fiscal, financial and monetary policies of Government closely know that we are too heavily in debt. They know that the liability we are leaving future generations is quite frankly catastrophic. I do not think we have dealt satisfactorily with the deficit and 1 simply want to point out what I think were some missed opportunities. That is why we are now having to discuss giving the Government the support to borrow $25,300 million more.


Mr. Blackburn (Brant):: Tories are always big spenders.


Nelson Andrew Riis: As my friend has indicated, the Tories are big spenders. They like to buy votes in a sense. I know that that flies in the face of what many of my Conservative colleagues in the House of Commons have said over the years, but the facts speak for themselves.
Just recently, the Government tabled its expenditure plans for the forthcoming year. Right at the top of the list was a $2.5-billion slush fund. There were no programs earmarked for that $2.5 billion. To be fair, the Tories called it by a fancier name. They did not call it a pre-election slush fund. That would be a little too obvious, 1 suppose.
The Estimates clearly earmark $2.5 billion to be used to buy votes in various parts of Canada. The Government can expand an airport here, build a new port there, relocate a prison in some constituency there in the hopes of trying to buy the support of Canadians, sort of the hooker approach to politics. I do not think that that will work. 1 do not think Canadians will be bought off by the Government. Nevertheless, $2.5 billion has been earmarked for the next year for various projects that at this point have not been identified.
What does that tell us about the Government? Surely to goodness, if the Government has some vision of the future of this country, if it has been working closely with provincial, regional and local Governments, it should be able to predict now what these major projects worth $2.5 billion ought to be. If it cannot, then that is scandalous. Any Government that says it has no idea how it will spend $2.5 billion now but will have to determine that in the next few weeks and months is not the kind of Government Canada needs. We need a Government that has some vision of the future of Canada a Government that works with the other political jurisdictions at the
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regional and local levels to determine the appropriate initiatives the Government should be taking to ensure that economic prosperity returns to all parts of Canada, not simply pockets in southern Ontario. A Government that says it is concerned about the deficit but has a $2.5-billion slush fund is being very unrealistic in its expectation of support for this initiative.
I am concerned about another missed opportunity. If the Government were serious about deficit reduction, it ought to have dealt with the matter of interest-rate policy. We all recognize now that interest rates in the United States are lower than they are in Canada, particularly short-term interest rates. The argument that if we lower interest rates in Canada, there will be an exodus of money to the United States where the returns are better is absolute folly. Interest rates in the United States are much lower than they are in Canada.
1 say why not reduce interest rates by 1 per cent, 2 per cent or almost 3 per cent to get them down to the United States rates. Can you imagine, Madam Speaker, what it would mean to the deficit of Canada, to say nothing of the assistance it would give to small and medium-sized businesses and consumers, particularly in the regions? The cost of serving the unbelievable debt the Government has now given us, a debt of nearly $300 billion, would be significantly reduced if interest charges on the debt were reduced by 2 per cent. That is why I say that it was a missed opportunity. Not to have reduced interest rates to approximate those in the United States was a serious oversight by the Minister of Finance (Mr. Wilson) and the Government of Canada. The deficit could have been reduced by another few billion dollars.
Another missed opportunity to reduce the deficit was tax reform or, as others have referred to it, tax deform. Tax deform is probably a more appropriate name for what the Minister of Finance has done to the tax system. The system remains unjust, unfair, discriminatory and biased in favour of the wealthy and the largest corporations rather than in favour of ordinary Canadians and medium and small-sized businesses.
You are probably filling out your tax return now, Madam Speaker. You have probably noticed that the tax return is no simpler than it was before. This notion of simplifying the tax system is absolute nonsense.
Over the weekend, I sat down for the first time to look at the tax return and the pages and pages of schedules. 1 do not know what on earth I will do. I think we ought to do what was done in the State of California. We ought to introduce legislation that requires Members of Parliament to fill out their own tax returns with no help from anyone. Then we would see some quick action.
I see that the Chairman of the Finance Committee knows full well that that is what should have been done. He is nodding. He knows full well that there was an opportunity to introduce a one-page or half-page tax return that would suffice for 75 per cent of Canadian citizens.


Donald Alex Blenkarn: The Fraser Institute thinks it's a good idea.

February 29, 1988
Borrowing Authority


Nelson Andrew Riis: The Fraser Institute thinks it is a good idea. I think it is a good idea. I suspect most Canadians would revel at the thought of a one-page tax return for 75 per cent of the people. Why did we not do it? I think it is because we are trying to mystify the system. Still the Minister of Finance says that we have simplified the tax system. I cannot imagine a more nonsensical statement being made. I suppose if he says it loud enough and long enough, enough people will begin to believe that there must have been some improvement at least, though I cannot see any. Again, this was another missed opportunity.
Why on earth, when we had gone through months and months of discussion, did we not make the tax system fairer? Why on earth was the Minister of Finance required to rise in his place recently to announce that, in spite of all the Government's best efforts, there will still be 60,000 profitable corporations that will not pay a single penny in income tax next year? Of course, that is to say nothing of the tens of thousands of corporations that will pay $100 or $50.
I know that my friend, the Chairman of the Finance Committee, knows that the real tax rates of the big finance companies, the big trust companies, the big banks and most of the institutions in the financial community would probably average less than 3 per cent. How many Canadians enjoy a tax rate of about 3 per cent? Virtually none. I think it is disgraceful that the tax system allows so many profitable corporations, corporations with profits in excess of $200 million or $300 million per year, not to pay any income tax whatsoever, to say nothing of those that pay only a few dollars.
As 1 say, we are not talking about the mom and pop shop or the hair salon down the street. In 1986, for example, Alcan Aluminum made profits totalling $220 million. Not only did it not pay any income tax at all, it got a tax credit for next year of $32 million. Then there is the little company Brascan with profits totalling $187 million and a tax credit of $2.3 million.
1 will not take time to go through this long list of 60,000 profitable corporations that paid no income tax whatsoever, but I would point out that if the Government was serious about deficit reduction this was an opportunity to find new revenue amounting to hundreds of millions of dollars. It did not do that. It said instead that it would allow these thousands of companies that make good profits every year to continue without paying any income tax whatsoever.
It is tragic when you think of it. Here was an opportunity, through changes to our interest rate policy and our tax system, to make the system more fair, equitable and just, but we did not do it. Instead, the Government created this big slush fund of money not earmarked for any particular project, to say nothing about a lot of peculiar spending by the Government.
In the coffee shops of Kamloops I still hear that people are outraged that they had to pay hundreds of thousands of dollars for Sinclair Stevens' legal bills. People are still outraged and ask why the Government had to give $5 million to help build the West Edmonton Mall for the Ghermezian brothers. They
did not need that money, but thousands of struggling small businesses did. That $5 million would have gone a long way for a lot of the small businesses in Alberta who are struggling to find some venture capital to establish a new product and get involved in a new creative business. They cannot get money from traditional lending institutions and could have used some of that $5 million.
There is a long list of ways that the Government decided to spend the taxpayers' money which I think people find very disappointing. I could also talk more about fiscal policy but I will move to some other areas because it has become clear that the Government is not serious in its efforts at deficit reduction. If it was, it would certainly have done things differently in the last number of months. Therefore, I want to spend the next few moments talking about the trade deal which the Government signed on January 2 with the United States of America.
A lot of people are asking what this deal will do to Canada. Is it a complete sell-out of our country to the U.S? Have we given away our economy to the U.S. multinational giants? What will it mean for jobs?
In spite of the statistics often presented to us by the Prime Minister (Mr. Mulroney) about how wonderfully Canada is doing, he forgets that while we are doing wonderfully in pockets of southern Ontario, such is not the case in most of the rest of Canada. In my Province of British Columbia, where unemployment in many communities is still in the 20 per cent to 30 per cent range, we have not noticed a tremendous improvement in the last four years of the Government's administration. In eastern Canada, where unemployment levels are as high as 40 per cent in some communities, they have not recognized any improvement, to say nothing about other parts of western Canada, northern Canada, or Quebec. It is not prosperity city in most of Canada today. Yes, indeed, in pockets of southern Ontario such is the case and we are pleased about that. However, we were looking in this most recent Budget and the Estimates for some real commitment to overcoming regional disparities.
Many of us are concerned that this trade deal will act against attempts by the federal Government to assist the regions. The American companies are going to be looking at these various programs to help our western farmers, East Coast fishermen and the forest industry throughout the regions and calling them subsidies producing unfair competition. The fact that they have the same kind of subsidies back home is irrelevant to them. All they have to do is prove there is some unfair subsidy here.
We saw this just the other day with the flow-through shares issue. The U.S. said if the federal Government, through the tax system, provides encouragement for the mining sector to explore for minerals, that is unfair. What did the Government do? It gutted the program and made it very difficult for exploration companies to raise capital to carry on their activities. This is critical, as you well know, because without that upstream investment, nothing will happen.
February 29, 1988

As you know, this exploration is usually done by small and medium-sized Canadian companies. Much of the mining operations might be done by larger companies, in some cases multinationals, but in this case we are talking almost exclusively, 100 per cent, about Canadian-owned companies out there in the trenches, in the hinterlands, exploring for new mineralization. Flow-through shares was a way in which the federal Government could encourage and support those junior Canadian companies. Now it has decided to gut the program but what is it going to replace it with?
To be fair, particularly to my friend, the Chairman of the Standing Committee on Finance and Economic Affairs, this is not the only way to assist mining exploration and show that we support their initiative. There are other more direct ways of support, if you like. However, the Government is apparently not going to do anything, just hang these small companies out to dry at a very critical time.
To go back for a moment to the trade initiative, what does it mean with respect to jobs? We have to look to the evidence to arrive at an answer. The Minister of Employment and Immigration (Mr. Bouchard), an honest man, one with integrity, a man who likes to tell it like it is, when he was asked how many jobs this trade deal might cost Canadians, had the courage to say it could be as high as 500,000. His predecessor and other cabinet Members have used figures as high as 800,000. There is no question there are going to be major adjustments. The royal commission which took a number of years to look into the whole matter of what they call free trade, which of course this deal is not, said it would cost the federal Government up to $5 billion in adjustment costs because of the tremendous dislocation that will occur in our economy. That means a lot of people are going to lose their jobs.
On the one hand we hear the Minister saying it could be as many as 500,000 jobs. Then we look at the work that the Department of Finance has done and we see that the best case scenario is that over five years it could create 125,000 jobs. That is 25,000 jobs a year. Yet in a good month, when our productivity is doing well, we can create that many jobs alone.
You have indicated my time is up. 1 just got started on this dissertation but unfortunately the rules prohibit me from continuing. Therefore, in closing, with respect to a serious situation facing this country, that being the deficit, unfortunately the most recent initiatives taken by the Government have eliminated those initiatives which could have helped reduce the deficit.


Donald Alex Blenkarn: Madam Speaker, I would like to ask the House Leader of the New Democratic Party some questions. 1 was quite interested in his desire to become associated with the Fraser Institute in terms of simplified tax returns.
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Has he had an opportunity to discuss with his colleague, the finance critic for his Party, the recent trip of the Finance Committee to New Zealand where, as he will know, a socialist labour government is in power? Has he discussed with his colleagues how that socialist labour government was in the process of selling out their national oil company to a British multinational?
Does he think we should do as they did and cancel all farm subsidies, lower farm interest rates, and all assistance to farmers completely as they did? Does he think that in order to squeeze inflation out of the system we ought to raise interest rates to 19 per cent as they have?
Does he think that in order to get the tax system down to a flat tax system we ought to disallow any contributions to pension plans or registered retirement savings plans as a deduction against taxable income?
Finally, on a sales tax issue, would he be supportive of taxes on food and even taxes on municipal taxes in order to keep the system simple?


Nelson Andrew Riis: Madam Speaker, I appreciate my hon. friend's intervention because I did forget one very important item in my presentation and this will allow me to refer to it briefly, that is, the decision of the federal Government to impose a national sales tax on all Canadians. It will make interesting election campaigning when Conservative candidates are promising changes to the tax system which will result in new taxes on everyone for virtually every business transaction with the exception of the purchase of food, as the Minister of Finance has indicated.
I appreciate that the Minister listened to the consumers of Canada who said that a tax on food and prescription drugs would be unethical and, quite frankly, unacceptable to the people of Canada, which point was raised by our finance critic on so many occasions that it became boring.
1 am not familiar with what efforts are being undertaken in every country of the world to come to grips with the challenges facing them. However, 1 am aware of what is going on in our country. I am aware of the Government's decision to cut back on support for the mining industry. This fits into an over-all program. As I see it, the Government has a program in place to depopulate rural Canada. It has not been very explicit or articulate about the program but it is a program to pull support from small communities and rural Canada.
The Post Office is the most obvious vehicle of this initiative. The Government's plan is to cut back postal services in rural Canada. In my own constituency in the last month the Government has attempted to close two post offices. We are trying to fight that. However, it is very clear that the Government has made a decision to use this method to encourage people to move into the big cities. I do not think that is right or appropriate.

February 29, 1988
Borrowing Authority
My colleague mentioned my support for the initiative of the Fraser Institute to simplify our tax returns. You bet, Madam Speaker, I see no reason why we must have the complicated, convoluted tax system which we do have in terms of the returns which people must fill out. There is no reason for it. The Member, who is the Chairman of the Finance Committee, will know that work had been done on a one-page tax return which would have been sufficient for the vast majority of Canadian citizens. People are subjected to trauma in their efforts to determine how much tax they owe or how much tax they have already paid the Government in hopes of a small refund. This ought not take place in the case of most Canadians. This is one page out of the many volumes of the Fraser Institute which I would have to support. I do not support many of their pages, but this would certainly be one which I do support.
With regard to the Member's points on initiatives taken by the Government in New Zealand, 1 am afraid that I am not equipped at this time to comment intelligently on those.


Frederick James (Jim) Hawkes: Madam Speaker, the Member opposite brings to our attention that his riding is being depopulated. I presume the people are going to the cities for jobs. If the people of his riding were to get a little wiser and elect a Conservative Member who believes in job creation in the private sector and economic opportunity, perhaps people would stay in the riding.
I simply offer that as a suggestion. We would be happy to see a conversion and have him come across the floor.
The Member's speech, in a somewhat uncharacteristic way, contained a lot of sophistry. I want the people who are watching to recall and perhaps read in Hansard what the Member said about the Minister of Employment and Immigration (Mr. Bouchard) with regard to 500,000 or 800,000 jobs. The Member attempted to leave the impression that that would produce 500,000 or 800,000 unemployed Canadians. Those numbers are used in reference to the capacity of the free trade deal to bring about adjustments in the Canadian economy so that people will have better jobs in the future than they have today. They will have higher paid and more highly skilled jobs.
The Member started with the figure of $10 billion and then said that it would cost the taxpayers $5 billion for adjustment. He left the impression that these would be unemployed people. The purpose of adjustment funds, be it $5 billion, $10 billion, or $20 billion, is for ordinary Canadians to attain increased skills and increased job opportunities with better working conditions and higher salaries.
The absolute minimum economic analysis is that the first five years of the trade deal will produce 125,000 additional jobs. That is the critical part which the Member very cleverly slides over. We are not talking about creating 25,000 jobs a year in Canada. The Government's economic policy is producing more than 30,000 jobs a month and has been doing so for three and a half years. How do we get 1.25 million more Canadians employed than were employed three and a half years ago unless we are producing jobs at that rate? The free trade deal will produce an additional 125,000 jobs. People now on the unemployment rolls will have jobs. It will produce
better quality jobs for Canadians and the adjustment fund will ensure that that happens.
I suspect that the Member was in a conflict of interest with the reality that labour union leaders provide so much of the funding for the New Democratic Party and have a desire to protect the jobs which they already have in their unions. They have no commitment to the total Canadian mosaic and the twelve and a half million people employed in Canada but are trying to do that which they were elected to do, protect the selfish interests of the members of that particular union.
That is what unions are about. They do that very well and are useful in Canadian society, but it is a tragedy that a political party in the Chamber is so clearly a captive of that single mentality on behalf of this very privileged group which controls the supply of labour and fights very hard on behalf of its members. However, the total Canadian society will be well served by the free trade deal.
We are on the borrowing Bill and perhaps the Hon. Member would like to tell us what justification he has for the use of tax credits? He brought up the issue of tax credits. Everyone who donates to a political Party receives a tax credit so taxpayers pay part of the contribution to the Party. What justification does the Hon. Member have for giving free trips to socialist countries. That is one of the things the New Democratic Party is doing. What justification does he have for the tendency to take campaign expenses and move them over to the column called "election expenses", receiving a larger rebate from the taxpayers of Canada, to fund the Party on the longer term?
If the Hon. Member is concerned about tax credits that are devoted to the creation of jobs for ordinary Canadians, how much concern does he have about the use of the tax credit system by his own political Party to service its political ends?


Nelson Andrew Riis: Madam Speaker, I have a long list of inaccuracies presented by the Hon. Member. I do not know where to begin. First, the suggestion that the Government has created an additional one million jobs is a very inaccurate statement. There are not, as the Hon. Member knows, an extra million jobs in Canada today.


Frederick James (Jim) Hawkes: There are.


Nelson Andrew Riis: There are not. We can look at any list. Let me just say the Hon. Member has given us an untrue statement. He has also given us an untrue statement when he talked about all these jobs that are going to be created. Let us recognize what kind of jobs these are. I want to relate to my hon. friend that in the constituency of Kamloops-Shuswap over the years we have seen jobs in the mining and forest industry paying decent wages. A person could actually earn a decent living. But people have now lost those jobs and are in the service sector earning one-third of what they were earning before. They are eking out a mere existence. That is the Tory agenda in terms of creating new jobs. A person who was in a position to raise a family decently and in dignity had to go to a job at the poverty level in terms of income. That is the Tory idea of new jobs coming out of this trade deal.
February 29, 1988

In closing, I simply want to say that there is much yet to do,
I found it of some interest that the Government, looking for new ideas, new suggestions and new ways of doing things with respect to a change in our tax system, went to the socialist country of New Zealand to seek out better ways and means of changing our tax system and government economic development policy.


Hon. Lloyd Axworthy (Winnipeg-Fort Garry):: Madam Speaker, in the spirit of this Chamber, of being able to provide a proper exchange of views, 1 would like to begin by looking at the assertions made by the Parliamentary Secretary to the Deputy Prime Minister (Mr. Hawkes) who is a well known expert in the art of sophistry. He was commenting on the views of my colleague. It is certainly well known within the boundaries of this House that if there was ever a practitioner of that particular art, the Parliamentary Secretary deserves the full accolades of this House.
The Parliamentary Secretary talks about the so-called economic benefits of the proposed trade arrangement. Let us examine what those are on the basis of the Government's documents, not some of the other analyses or studies. Let us look at what the Government says. The Department of Finance produced its own document trying to put the best face possible on the trade arrangement. One would have assumed that the promises and expectations held out by the Prime Minister (Mr. Mulroney), that there will be this incredible gravy train of growth and jobs sort of sloshing over the country, would have been confirmed in the figures. However, instead we received a projection of an incremental growth rate of one-half of 1 per cent per year. That is so marginal, so meaningless, that in terms of computer forecasting, no analyst worth his salt would not even take that into account and provide it as a legitimate proposition. It simply does not add up. When our own growth rate varies, depending on the time of year, between 3 per cent, 3.5 per cent and 4 per cent in a good year, to say that we expect, on the best possible scenario, a growth rate of one-half of 1 per cent is hardly going to provide comfort and solace to all those who will be losing their jobs.
Of course, what the study also predicted was that the jobs will come only through increased consumer spending, primarily in the service sector. It is also well known that that is the lowest paying sector of the economy. It is a sector where there are far higher incidents of temporary and part-time work. The question of what the service sector will do under free trade has never been studied, itself. So we are really flying blind. We are being asked to accept a set of economic forecasts in which the analysis has not been done, and the large macro studies have a marginal Mickey Mouse interpretation to them.
That study, that was highly cited by the Parliamentary Secretary, did not include the increased tax costs the Canadian people will have to bear. They will have to pay $450 million in the next year, an extra cent on every litre of gas they buy, adding up to a $2 billion additional tax grab in the fifth year of the agreement. That was not put into the computation, nor was
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the question of additional adjustment costs that someone will have to pay. We know the stingy federal Government is not going to pay them, so that means it will fall upon the private sector or the provincial Governments to pay.
It is even more ironic when the Government talks about the new jobs and new skills training when in fact its own job strategy is in absolute shambles. It is in total disarray. The community colleges across Canada are having to close down their courses because they are not receiving sufficient funding. The money that is supposed to be going for training in the private sector is not being monitored, so that the money can be used to train someone to push a broom, instead of to train them on the computer. No one knows because they are not being monitored properly.
There is no money to deal with the problem of illiteracy, to bring Canadians who have low job skills and lack of basic English and mathematics to the point where they can get into a training position, because the Canadian Jobs Strategy has cancelled all these programs. The Canadian Jobs Strategy has abandoned hundreds of thousands of Canadians, forcing cancellation of community college programs, supporting unmonitored, unevaluated programs in the private sector where the quality of training is questionable. Yet the Parliamentary Secretary has the nerve to say, "We are going to be training skilled workers for the future". The National Training Act, which was one of the best training programs in the world, has been turned into one of the worst, all in a matter of three and one-half years. That is a great accomplishment.
I challenge any Conservative Member of Parliament to stand up and argue the case for the Canadian Job Strategy, to put facts and figures on the table as to what it is doing. They can challenge what 1 have just said if they think it is wrong, but I have the evidence right here as to how it is working. I have taken some time to study it, something I am sure Tory Members have not because they refuse to face that kind of calamity.
In the Province of Manitoba, in the next year alone, the amount of money going into job training and Jobs employment will go from $75 million to $48 million, an almost 30 per cent cut in one year.


Mr. Hardey:: Look at the results, though.


Lloyd Axworthy: Some unknown voice opposite tells me to look at the results. I can tell him the results in terms of some of the private business sectors where they are training people to push a broom. I met last weekend with people at Rossbrook House, which used to have training programs for young native kids so they could get into the job force, and those programs have been cancelled. Those are the results. I tell the Hon. Member that it is a national tragedy what the Government is perpetrating upon Canadians. If it had any guts or courage it would start admitting it and change the program or throw the Minister of Employment and Immigration (Mr. Bouchard) out of his job. He is not only fumbling on the immigration side but he is fumbling badly on the job creation and employment side.

February 29, 1988
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It is terrible what is going on. The Government says, "Oh, we are going to prepare for the bright new future. We will have highly skilled Canadians", but we have a job training program which is in shambles, where the whole foundation is dissolving around us. Yet the Government tries to defend that kind of program.
Another area where sophistry has become the order of the day as opposed to results is in the area of regional development. I could think of no more important priority for a federal government than to ensure equity in the country. Because of our geography and the nature of the population being spread across 8,000 kilometres and a large northern span of territory, a primary responsibility of any federal government is to ensure that people are treated the same, that there is a sense of equality and fairness. The expectation should be that the federal Government will have standards in which all receive a fair meting out of resources.
In the early 1980s we brought in a new economic regional development program. It was designed to work in co-operation with the provinces. We would sit down and work out priorities with each of the provinces and then use federal funds to invest in those regions. It was not based solely on indexes of poverty, but also on what would be the primary focal points of growth and development, region by region.
In my own region we sat down with the provincial Government and the City of Winnipeg, invested in downtown development where we felt that the improvement and enhancement of the urban environment would be a major incentive to private capital investment. For an investment of $30 million in the north of Portage, the result has been that we generated $450 million of additional private capital. That is good leverage by any judgment; the major renewal of the downtown area.
We sat down with the province and felt that transportation would be a major focal point of growth. It is the largest supplier of jobs in my home province. We began to invest in the infrastructure, development of the Port of Churchill, new research facilities at the university, proposed new maintenance base for VIA Rail, a computer centre for CNR, the development of new hopper cars to deal with the prairie grain trade in the Transcona Shops, and improvement of the airports to provide for international trade.
We also concentrated on the cultural communications area, in an attempt to build up in the City of Winnipeg and the Province of Manitoba an increased capacity for growth in the cultural areas. We then added supplementary programs in agriculture and minerals. All of those were designed in full cooperation with the Province of Manitoba and with the municipalities and the groups involved.
Those agreements were signed and they amounted to half a billion dollars' worth. I am not saying that they were perfect, but it was the beginning of a co-operative approach to economic development, and an attempt to bring all the parties together to ensure that the federal Government was a major player on plans that were developed and blueprints organized in the local region.
After the 1984 election what happened? The new Government cancelled many of the transportation projects. It cancelled the development of the major robotic research centre which would have given the country, not only western Canada, a major, first-class, world-class research centre for robotic technology. In this area we lag far behind. The Japanese out-gun us 10 to 1 in the development of robotic technology, but we cancelled a research centre which would have provided the private sector with an inducement or incentive to develop in that area.
In the Port of Churchill there was a slow-down. The projects are still waiting to be funded. There was cancellation of a major renewable energy resource corporation. We also had the famous incident of the CF-18, and withdrawal of that major opportunity for western Canada to get into the new frontiers of the aerospace business. Those actions were undertaken unilaterally, without consultation, and in contradiction to the economic development plans that had already been developed.
That runs against the spirit of federalism. It also shows that there is no economic development priority based upon equity or fairness. We are now told that there will be a new Western Diversification Fund. In looking at the estimates of that and the projects, what do we find? Of the projects already announced, not one includes any major project in the Province of Manitoba.
Is that because the Province of Manitoba does not support the Government on its trade proposals? Is it because it has an NDP Government? Whatever the reason, how does one explain a pattern where there was very clear, very significant co-operation between federal-provincial governments in 1984, and since 1984 nothing but warfare, confrontation, withdrawal and subtraction of federal assistance?
Is that what one would call a fair system? Is that what one would call a system in which the federal government is seen to be an equal provider of its own investment? Is that seen as a way of ensuring that one million people who live in a significant province in this country in terms of opportunities that it can provide are being totally ignored by the Government? Does it suggest a weakness around the Cabinet table of the Manitoba representatives? Does it simply say that one of the provinces of Canada is being frozen out, is deliberately and politically being isolated? That is what I suggest is the reason.
February 29, 1988

When we are asked to talk about a borrowing authority, one goes on the basis that there will be some level of fairness applied to it. If the Manitoba taxpayers are asked to support further expenditures by their own Government in Canada, one would assume and expect that perhaps they would want some return and that they would feel they were part of the system and going to be calculated in in the same way.
In the last two or three weeks, what do we find? In total contradiction to a signed agreement, the Minister of Transport (Mr. Crosbie) is breaking that agreement by withdrawal of 300 senior employees in the CN headquarters in western Canada, particularly in Winnipeg. The agreement itself clearly states that the Crown corporations of Canada involved in the field of transportation will make every effort to enhance and augment their employment and their research and development. This Government is acknowledging its withdrawal.
Let us look at a very crucial area of rail line improvement. One of the most important areas that we have known in western Canada to maintain our smaller communities is the maintenance of the rail line network. In 1984 when I was Minister of Transport we signed a major agreement with the railroads which required that each year they would follow a clear program of rehabilitation. This is the last year of the program, and the Minister of Transport is committing $25 million, leaving $125 million still in the bag.
Do you know how many communities that will affect, Madam Speaker, how many smaller places in western Canada will find that they will no longer have a rail line in two or three years?
I find it difficult to believe that a Government that states that it wants national reconciliation, which in 1984 based its election mandate on there being an end to confrontation, is engaging in the very same and more extreme forms of antifederal initiatives. It is clearly discriminating against certain provinces of this country. It is withdrawing federal presence, federal investment, and federal activity. That has connotations and repercussions far beyond the immediate area of economic growth or jobs. It will weaken the linkages of this country. It will undermine the connecting links across Canada in a very fundamental manner.
Let us look at what disturbs those of us from western Canada who are Members of Parliament. When we look at political surveys from that part of the country-and they may not be printed in the central Canadian or eastern press-we see western Canadians being asked whether they would support a legitimate western Party and some 30 per cent to 40 per cent saying that they would. The reason is that in the last three or four years, rather than foster a greater sense of participation in Canada, the Government has succeeded in pushing western Canadians further away with the kinds of actions that I have outlined so far.
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This brings me back to the topic with which I opened, that is, the proposed trade agreement. There is an implicit assumption that somehow-and I think the Prime Minister spoke about it in Calgary before Christmas-this will be a bonanza for western Canada, when in fact the hard figures show no such thing. In fact, a number of very essential western Canadian industries will be put in jeopardy. The food processing industry, one of the largest industries in my own province, will be forced to shut down, or the supply management system will be forced to shut down. This is the dilemma faced by the Campbell Soups, the McCains, and the other major food processors in my province. That could be repeated for many of the smaller industries. The trade agreement will not mean alternate growth; in many cases it will pull away the growth. However, the Parliamentary Secretary says that we do not need adjustment or any help for the workers and communities affected, that it will take care of itself in the market-place.
We in western Canada know better. We know that the way to develop is through a partnership of the public and private sectors. It is a partnership which has made western Canada grow, and the Government is withdrawing from that partnership. For that reason this request for a borrowing authority is really the height of sophistry.


Frederick James (Jim) Hawkes: Madam Speaker, the Hon. Member opposite said that I said that we would not need adjustment. I have never said that in my life, nor would I ever say it. The labour force constantly needs adjustment, and when we have a major positive initiative, such as free trade, we will need more adjustment than at other times. I very much resent people trying to put words in my mouth that 1 have never uttered. I want to make crystal clear that the pattern of the Hon. Member opposite in doing that kind of thing is well known in the House, but perhaps not well known to Canadians, so I simply wanted to point it out to them.
He began with an attack on the Canadian Jobs Strategy, which took a great deal of courage from that particular Hon. Member. Canadians may have forgotten the Liberal approach to unemployment problems in Canada. I stood in the House, when he was Minister and I was critic on the other side, and asked repeatedly in Question Period for an explanation of why a Liberal cabinet Minister would be receiving government employment creation grants which averaged out at $586 for every unemployed person in his or her riding, while unemployed people in my riding of Calgary West received employment creation funds at the rate of $12 per unemployed person.
It was a policy approach, his policy approach, that consistently created first-class unemployed Canadians and second-class unemployed Canadians. Year after year there was no fairness to the system. This unfairness was clearest in western Canada, and he was the Minister for western Canada. He talked about adjustment. Well, the National Energy Program was a program that required adjustment in my region. We moved from a 4 per cent unemployment rate to 13 per cent and

February 29, 1988
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14 per cent unemployment rates. That was the adjustment. They took 4 per cent unemployment and made it into 13 per cent or 14 per cent unemployment through one simple policy initiative which he supported and promoted. It threw people out of work. We must couple that with the use of employment creation grants of $12 per year per unemployed person. They create the problem, and then they take the money and put it in another part of the country, not where the unemployment was created. That is the Liberal idea of adjustment.
Let us refer to what our Government did. I see the Minister of Communications (Miss MacDonald) is here. She replaced that Hon. Member as Minister of Employment and Immigration and very quickly looked at the 50 some odd programs which he had created to parcel money to Liberal partisans and constituency organizations. One had to be a Liberal to get help under that Government. It was not enough to be a Canadian; one had to be a Liberal Canadian. Our Minister reduced them down to six programs. She restored some sense of local choice in terms of local unemployed people and local labour markets. She devoted all the money, not to partisans of a political Party but to the recipients to help them gain more skills, and started working on the adjustment concern right from the start of the life of this Government. With all that money that was parcelled out for cleaning river banks, or doing things which sometimes did not even exist-la table de pique-nique dans la province de Quebec-we must never forget the Liberal approach to this problem. It has been replaced by an educational approach. Taxpayers' dollars go to individuals to help them gain more skills for their future, and if their future as Canadians improves, the country's economy improves. It is working.
The unemployment rate for young people, the most difficult group, in three short years has dropped from nearly 19 per cent to 12 per cent. We have solved one-third of the problem in three years, and if we get four more years we will halve the problem. That is what will happen, because we have a philosophy of investing in Canadians, taking the skills and drives which already exist, and helping them to improve their skills and to retain the drive to succeed. When individual Canadians work together to look at economic opportunities and to be productive, the economy improves and improves. It is a combination of policies which has provided those one million, one hundred and some odd thousand Canadians with jobs today who did not have jobs three years ago.
The Hon. Member talked about hard figures. The hard evidence is the capacity of Canadians to produce, to sell, and to prosper if government stays out of their road and provides assistance in the background where needed.
I simply say to the Hon. Member opposite that Canadians do not want the Liberal approach to employment creation where one must be a Liberal to get money. They want a fair program for all Canadians dedicated to the adjustment skills issue.


Lloyd Axworthy: Madam Speaker, the Hon. Member talks about what Canadians want. I just cite the recent poll in the Province of Manitoba where we are 14 points ahead of the Tory Party federally. It seems to me that they know what they want an awful lot more than what the Hon. Member seems to know. I would only remind him that they know what happens when they have a Liberal Government. They know how federal investment can be used to generate growth.
Let me give the Hon. Member an example. I am glad that he is practising to be the employment and immigration critic again, because he will have to employ those skills in a very short time. Let me tell him about something that happened last Friday. I visited a place called Rossbrook House, a drop-in centre for young people. It primarily services native youth and is located in the downtown area of Winnipeg. It is run by a group of Catholic nuns. They were recipients of community employment programs when I was Minister. They used those programs to hire young native kids who did not have any job skills and who had left school in grade seven or eight. They brought them into the job market and gave them some employment as counsellors. This enabled them to develop some rudimentary skills. This was used as a way to develop a transition between that and going on to future training.
Under the vaunted Canadian Jobs Strategy, about which the Hon. Member talks, there are not those programs any longer. They have been cut off. The group of young Canadians about which he talked are being told that they do not rate anymore. That is an example of what is being duplicated right across the country. If one is in a low income bracket, out of the market or suffers from illiteracy then the Government does not care. Its jobs strategy is not designed for this person.
I would now like to deal with the fact that we are short of several thousand job training places in the western Canadian provinces because under the vaunted Canadian Jobs Strategy the Government has not put money into this area. It has not created a single new training space in the country. Under the Canadian Skills Growth Program we were investing in the community colleges, including those in the province of the Hon. Member, to provide new spaces, new equipment and new opportunities. The Canadian Jobs Strategy does not provide any investment of that type whatsoever.
Let us talk about the question of the special needs groups in our society. There is no doubt that one of the important reasons for our job creation programs was to support the social service system of the country since it was being clobbered by provincial Governments and municipal Governments. They could not afford the extra programs to provide the extra services to battered women, displaced kids or homeless families. Our job creation programs went to those groups directly so that they could hire people and provide services. Those programs have been cut off. They have been withdrawn.
February 29, 1988

Is the Hon. Member saying that, yes, the strategy is designed to support the friends of the Government in the business community who are receiving all types of grants which are not being monitored or evaluated and which are certainly not being used for training? They are being used as a way of subsidy back into some of those businesses. The quality of the training is so pathetic that it makes one weep.
That is the Tory way of doing it. That is fine. I am glad that that is the approach that they take. I think that Canadians know that there is an alternative. There is the skilful use of the public sector.
It is interesting to note that in the provinces of western Canada, about which the Hon. Member talked, in 1987-88 in Manitoba in particular job funds dropped from $75 million to $48 million. In Saskatchewan the funds went from $58 million down to $39 million. Even in the Province of Alberta the figure went from $141 million down to $103 million. Who is talking about increases when those provinces are experiencing cuts of 30 per cent? I think that the Hon. Member had better start to look at the Estimates of the Department of Employment to find out who is trying to serve the people of western Canada. He might start to look at the figures rather than to continue on in the fantasy in which he lives perpetually.


The Acting Speaker (Mrs. Champagne):: The period provided for questions and comments has now expired. Resuming debate. The Hon. Member for Humboldt-Lake Centre (Mr. Althouse).


Mr. Vic Althouse (Humboldt-Lake Centre):: Madam Speaker, I am surprised that none of the government Members wish to defend their application to the House for some $25,300 million. Perhaps the proposition is so hard to defend that they find it easier to sit in their seats.
These funds apparently are to be used, as the Bill states, as may be required for public works and general purposes and shall expire March 31, 1989, to the extent that the unused authority exceeds $3 billion. In other words, once again we will carry into the next fiscal year some $3 billion. This means that something in the order of $28,300 million or thereabouts is being carried by the Government as a borrowing authority. We presume that this will be used basically to cover the deficit that is being projected at slightly higher than that amount of money.
This is the type of measure that a great many small businesses and farmers undertake at the beginning of every year. They go into the bank to obtain a lending authority from the bank. They establish a line of credit. Essentially, that is what the Government is attempting to do with this particular Bill. It is attempting to get that authority from the House of Commons, the body which is supposed to monitor Government expenditures and without whose consent Government could not spend the money. The Government comes to us and asks for the right to borrow money to the extent that I have just noted when tax revenues fall short of meeting the current expenditures.
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Habitually, we find that there is usually a big lending authority requested early in the year, as is this one, and then there will be a series of smaller ones made later on. We will not know until later on just how large the next series of expenditures will be. However, I do note that in reviewing the Estimates for 1988-89 that expenditures will continue to climb. In the fiscal year that we are about to finish I note that budgetary expenditures went up 7.7 per cent at a time when the Minister of Finance (Mr. Wilson) was telling us how carefully he had reduced expenditures and how he had control of the Budget and how he had the deficit in hand.
In going through the Budget papers that were presented a couple of weeks ago, I wanted to find out just how much in hand this budgetary deficit was. I found that it is not quite as well in hand as the Minister leads us to believe.
When he became Minister of Finance in mid-1984-85 we had a gross accumulated deficit of about $200 billion, according to the papers that he presented with his Budget. It is listed as $199,092 million. Today, in the 1986-87 year, we have a net public debt of $264 billion. This means that in the period of time that the Minister of Finance has been in charge of the finances of the country the deficit has increased more than 30 percentage points. In fact, more than 30 per cent of the accumulated debt of the country since 1867 has been accumulated in the three and one-half years that the Minister has been the Minister of Finance. He says that we have the deficit in hand. He says that he is staying the course. He leaves the impression that the course is to get us out of debt and to get the public finances in some order.
I mentioned the extra billions of dollars, some $165 billion, that he has left future generations to carry. Some people say that it does not really matter. They say that what is really important is how large the deficit is in relation to the Gross National Product. So let us look at how he has managed under that set of rules.
When he became the Minister of Finance we had just shifted from 39.6 per cent of our national debt to Gross National Product. In other words our national debt was accumulated debt and equalled 39.6 per cent of that year's Gross National Product. At the end of 1986-87, which is included in the Budget papers, we find that our net public debt accumulated over all the years is now 51.8 per cent of our Gross National Product instead of the 39.6 per cent. I am afraid that staying the course will not solve the problem the Minister has defined as being one of the main problems the country faces.
We note that the Government has reduced the Public Service by a considerable amount. There are many fewer employees now than there were before, yet expenditures have not dropped as a result of this tactic. The first Budget of the Minister of Finance (Mr. Wilson) had budgetary expenditures in the neighbourhood of $111 billion. This year's expenditures are expected to be $132.25 billion, some 20 per cent higher than they were when this Minister became the Minister of Finance.

February 29, 1988
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Staying the course has not really changed the direction taken by previous administrations. Expenditure are still up and they are rising more rapidly than inflation. In fact, last year the forecasted percentage increase in expenditures was 7.7 per cent while inflation was at about 4.7 per cent or 4.8 per cent. This Minister who was so critical of previous expenditure programs is continuing to follow the same route as the much-maligned Liberals who preceded him.
1 would like to comment on some of the Government's expenditure policies which affect western Canadians and farmers across Canada. Other speakers have noted the job-creation plans of the Government. I wonder if there were plans. How can there be plans for job creation by a Government that claims to be opting out of all economic activity and leaving it to the private sector? I do not understand that, but perhaps the argument that is being made is that the private sector, thanks to being unleashed through less onerous taxes, has created jobs. I suppose that is the rationale the Minister is proposing to use for the job creation of which he boasts.
I note that most of the jobs that have been created have in fact been created in the Province of Ontario and most of those in the vicinity of Toronto, a very hot market at the moment. Those in the regions where most of the farmers for whom I speak live have not noticed that things have improved greatly.
Those who incurred debts during the time when interest rates were very high have not seen interest rates drop markedly under this Government. In fact, over the last six or eight months they have risen. This past year they were 1 per cent to 1.25 per cent higher than they were before. The farmers and small business people who make up most of the population of my riding are finding things actually worse than they were a year ago at Budget time.
A great many of the producers in my riding are in the export business. They export grain, beef, pork and light farm machinery. They find that the amount of money they receive for their product is down as well. At the same time as the Government has allegedly been fighting high interest rates by allowing them to rise another 1.25 per cent, it has also permitted the dollar to float higher.
Last year at Budget time the dollar was worth 72 or 73 cents. It is now floating at around 78 or 79 cents. This is bad news for the export industries in my riding. It means that they receive about 10 to 12 per cent less from their exports, in American dollars which are now bringing in fewer Canadian dollars. The Government's policies on interest rates and the dollar have not been good for the farmers and small businessmen of my riding.
Those people who have had problems carrying old debts have been attempting to refinance through the Farm Credit Corporation. They have found that it is even more difficult to get an FCC loan than ever before. The amount of business FCC has generated over the past year is down considerably. The Government has instructed the corporation to limit loans
to the amount of repayments. In other words, it is not proposing to give the FCC any new money. The only money it has to loan out is money from recycled loans that were paid off.
The interest rates that the Government has insisted the FCC use have been so high that very few people have used the services of the corporation. It has actually built up a small surplus of repayments over new loans. FCC interest rates rose a few months ago from 11.75 per cent on long-term loans to 12.25 per cent at this time. This was in the face of a policy goal presented to the corporation at a federal-provincial conference some time ago of having long-term credit rates to farmers at 9 per cent. After setting that goal, interest rates went from 11.75 per cent up to 12.25, not exactly a move toward the goal.
I note that the rail line rehabilitation program is away behind schedule. The program is due to end at the end of this year. Hon. Members know that some $125 million should have been expended in previous years on that program but that money is still left uncommitted. In fact, the Minister of Transport (Mr. Crosbie) apparently has no intention of committing those funds to comply with the agreement that was supposed to exist between the people in my part of the country and the Government of Canada to bring branch lines up to permanent standards so farmers could move their products to market.
There seems to be a real distaste on the part of the Government to complete its commitment. There are a number of lines in my own riding which very clearly meet the criteria. Lines are ranked on the basis of cost-to-benefit, and the ones that would provide the most benefit to the whole economy, not just locally, at the least cost are the ones that meet the criteria. However, some of those lines which meet the criteria are having difficulty getting funds. Civil servants have clearly stated that those are priority lines and have ranked them accordingly, but the final decision which is made at the ministerial level has been delayed, and why there should be disputes from the Ministers, I do not know.
We find these decisions delayed because the Ministers involved apparently have some plans for the funds to go to other lines which happen to be in ridings held by very prominent members of the Government side. However, the return ratio of these lines is less than half of that of the lines that have been designated priority by the civil servants, some of which are in my riding.
I find it very strange that the Government would not move to improve the high-priority lines. If the lines were improved, costs to the producers in the area would be reduced. It would reduce costs by freeing up more than 500 hopper cars annually. That is the extra number of cars that will be available to the whole system if these lines are upgraded. Yet the Government has been dragging its feet on the matter. Instead of putting in the funds it talks about freedom to move and all the benefits that can accrue to a local community and economy if there is freedom of choice, to use the Government's words.
February 29, 1988

The Government seems to think this will somehow be a job-creating kind of scheme. I suppose it would be if it did not upgrade the line which of itself would be a job-creating scheme. Some Conservatives seem to think if they do not upgrade these lines what we will have instead is a lot of local employment with truckers moving grain 30 and 40 miles to the new railway points. This will employ more people driving trucks and maintaining and building roads. Unfortunately, it will also create a much higher cost system for local farmers and local communities. They will have to pay higher local taxes to maintain the road system. Local farmers will have to pay more for getting the grain trucked to the railway. It is a very shoddy type of economics and the worst kind of attempted political patronage 1 think I have witnessed in my eight years in politics. Yet this seems to be the direction the Conservatives wish to take this country.
Perhaps it also explains the manipulation of expenditures, with an attempt to create jobs, and may also explain why we have forecasted increases in expenditures in the last two years of the mandate of some 7.7 per cent and 5.5 per cent, while at the beginning of the mandate the actual increase in expenditures was 1.9 per cent. The Minister attempted to establish his credibility as a cost cutter in the first years. While he still believes in laying off the Public Service he continues to spend more money. 1 think that is in part caused by replacing civil servants with contracts to private corporations or individuals who in fact provide the same service at higher cost.
That seems to be the case with respect to public research, particularly in the Department of Agriculture. Since the Government took over there has been a cut-back of some 500 person-years in the research capacity of that department. Many of those positions are for professionals, some are technicians and other back-up services.
This I suppose represents the philosophical approach the current Government seems to have that research should be conducted by private rather than public entities. I think that is a grave mistake. I know of a number of instances where public research has resulted in great savings for individual farmers and consumers. This kind of research would never be conducted by private firms because there would be no reason to engage in research that would find ways of avoiding buying their products, for example. I think public research has to continue. It has a very good role to play and I hope the expenditures in future Budgets take that into account.
I see you are signalling that my time is up. I will close by remarking that I find it very difficult to understand how we can continue to have these very high debt loads going into our fiscal year, $25.3 billion being borrowed up front, knowing we will have to come back to the House for more, at a time when the Minister says he is reducing the deficit. Yet, as I pointed
Borrowing Authority
out, it has gone up phenomenally during the course of this Minister's tenure in office.


Frederick James (Jim) Hawkes: Madam Speaker, 1 have listened with great interest to the Hon. Member opposite. I have two very critical questions to ask him.
He was not in the House, nor was I, during the last minority Government of 1972, 1973, and 1974. However, we know that the current Right Hon. Leader of the Opposition (Mr. Turner) was then the Minister of Finance. As such he raised expenditures in two successive budget years by 30 per cent and more. His Government put in place policies that reduced the growth of income. The debt problems we are talking about today are a direct consequence of the NDP support for that minority Liberal Government which tried to bribe the voters through increased expenditures without any sense of fiscal responsibility concerning raising offsetting revenue.
My first question is this. If faced with a similar situation in the future, will he and his Party behave in the same way? His Party argued consistently for spending and we hear very little about revenue raising. He did not mention in his speech that the recent Budget would require no borrowing, we would not be standing in this House today asking to borrow $25.3 billion if we did not have to pay interest on money borrowed because of policies supported by the NDP in partnership, as usual, with the Liberal Party. We would have a surplus of well over $3 billion this year which we could use to reduce the debt Canadian taxpayers owe. We are just borrowing money to pay interest on the debt that was created, starting back in 1972, 1973, and 1974. That is my first question. Will they in future act in the same fiscally irresponsible fashion?
My second question is this. In 1979 the NDP moved a motion of non-confidence in the Conservative Government. The Hon. Member for St. John's West (Mr. Crosbie) was the Minister of Finance. Every reputable economic group in the country said that his 1979 Budget was the fairest Budget to the poor people of Canada in the entire decade. When the NDP had clout in a minority Government they did not produce Budgets that were fair to poor people. This Party produced one in 1979 and they threw us out of office. We have a right to know, as do Canadian taxpayers, whether they will act in that fashion in the future to punish the poor of the country? Will they act in a fashion designed to increase the debt load for future generations instead of being fiscally responsible?


The Acting Speaker (Mrs. Champagne):: The Chair realizes that the Hon. Member for Humboldt-Lake Centre (Mr. Althouse) would very much like to reply to the comments made by the Parliamentary Secretary. To make sure that he does get equal time, 1 think the best way to do it would be after Question Period.

February 29, 1988


Victor Fredrich (Vic) Althouse: Madam Speaker, 1 have a plane to catch at three o'clock. If I am going to be able to answer it, it will have to be now, and I can be very brief.


The Acting Speaker (Mrs. Champagne):: It being one o'clock 1 need unanimous consent. Is there unanimous consent?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


Nelson Andrew Riis: They do not want to hear the answer.
[ Translation]


The Acting Speaker (Mrs. Champagne):: Order. It being one o'clock, I do now leave the Chair until two o'clock this afternoon.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine East):: Mr. Speaker, I find it totally and completely objectionable when Premier Bourassa of Quebec suggests that Quebec Anglophones prefer what he calls social peace to language justice. In effect, what Mr. Bourassa is saying is that if a minority demands justice and the majority resists, then the minority should hold back to pacify the insensitive and inflexible majority.
By that logic South African blacks should peacefully accept apartheid because their demand for justice upsets the white racist Government, or perhaps we in Parliament should back down on Bill C-72 because it upsets some Neanderthal Tories.
The Quebec Superior Court and the Quebec Court of Appeal have unanimously rejected those provisions of Bill 101 which ban English on signs, and Mr. Bourassa himself promised to remove that prohibition. Let Mr. Bourassa act to provide linguistic justice and then he will have social peace in Quebec.



ABORTION


Mr. John Oostrom (Willowdale):: Mr. Speaker, "Thou shalt not kill" is a universal law adhered to by all societies since the dawn of civilization. In the aftermath of the Supreme Court decision Canada has been left without a law on abortion. However, we now have the opportunity to enact a law which will define life as beginning at conception.
For a long time our religious and moral teachings have been questioned by the scientific community. However, science is now confirming the religious teachings on when life begins. Fred Byfield writes:
When is a life defined? The answer of all genetic science is now unchallenged: It is decided at the instant of conception. The fertilized egg is like a computer chip. The genetic "program" to produce the person is already there.
Our decision on abortion will have an impact on Canada's future. Respect for life is the only choice.

[ Translation]



ENVIRONMENTAL AFFAIRS


Ms. Lynn McDonald (Broadview-Greenwood):: Mr. Speaker, I congratulate the task force for their report to the effect that public scrutiny is neither a judiciary nor a political process, but a forum which is vital to the future of our environment. Well done!
The task force endorsed the approach advocated by Canadian ecological interest groups, namely public hearings held in informal and flexible proceedings fully consistent with the principles of fairness.
A recommendation that ecological groups be eligible for public financing was approved in the body of the report, but strangely enough it was omitted from the conclusions at the end of the report. It so happens that implementing this recommendation is essential if volunteer groups are to participate fully. If the Government wants active participation and an adequate process it has to provide the funds required.
I urge the Minister of the Environment (Mr. McMillan) to begin without delay to implement the measures proposed in this important report.
February 29, 1988



POLITICAL PARTIES


Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, "free beer for all the workers" is passe. Today's NDP is much more sophisticated. The latest gimmick is to offer Party supporters the chance for an all-expenses paid vacation to-you guessed it-that socialist paradise, Hawaii, U.S.A. Thence the lucky winners will travel to Australia and New Zealand where they will be able to study the prosperity brought about by the free trade agreement between those two countries.
New Zealand's burgeoning economic health due to deficit cutting, tax reform, privatization, grant and subsidy elimination, and public service reduction-exactly the opposite of NDP policy-will round out the education.
The NDP should be careful. Any socialist taking this trip is likely to come back a committed free enterprise Conservative.



AGRICULTURE


Mr. George Henderson (Egmont):: Mr. Speaker, I rise today to bring an important issue to the attention of the House. The federal Government's potato stabilization formula for calculating payments to Prince Edward Island farmers is unacceptable to small and medium-sized potato producers.
I speak on behalf of the many potato producers in Prince Edward Island who have contacted me regarding their opposition to the federal Government's decision to deduct the 1985 diversion payments from the recently announced stabilization payments.
When world over-production resulted in rock-bottom prices these farmers participated in the diversion program to take their potatoes off the market to enhance the return for potato producers in all of eastern Canada. They had no idea at that time that they would later be subject to penalties under a future stabilization program.
Because of the formula in place the small producers will be hit the hardest because they diverted all or most of their potatoes off the market. Some will not receive any stabilization payments at all.
I now urge the Minister of Agriculture (Mr. Wise) to listen to the voice of Island farmers and change the stabilization formula to ensure that the most disadvantaged farmers get their fair share.



SPECIAL CANADIAN GRAINS PROGRAM


Mr. Bill Gottselig (Moose Jaw):: Mr. Speaker, the first cheques for the 1987 Special Canadian Grains Program are now on their way to western grain producers. This marks the second year the Government has put this program in place to assist hard-pressed producers.
The program for 1987 has been improved substantially by recognizing summer fallow and the additional costs of production for farmers who irrigate. Specialty crop production, processed alfalfa, and honey producers are also recognized as suffering as a result of the depressed prices in the international market-place.
What a change from the previous Liberal Government whose Leader pitted one region of Canada against the other. The Government has provided assistance through the Special Canadian Grains Program regardless of whether the grain is produced on the Prairies, in the Okanagan Valley, the Maritimes, or any other region of Canada. That's performance, Mr. Speaker; that's performance.



SIKH ORGANIZATIONS


Abram Ernest Epp: Mr. Speaker, Canadians have been surprised in recent days to see the Secretary of State for External Affairs (Mr. Clark) advising the provincial Premiers not to meet with three Sikh organizations. They have been told that the activities of these organizations have been a significant irritant in our relations with India. The Indian High Commission, however, denies having complained about officials meeting with these organizations.
Canadians have reason to be concerned about the Minister's action. Are there precedents for such a request to discriminate among organizations? Has the Canadian Government responded before to the concerns of foreign Governments and asked provincial Premiers to boycott certain Canadian organizations? Have other organizations, regarded by foreign Governments as being hostile but never found guilty of any seditious activities, been subjected to such actions by any Canadian Government?
It is one thing for governmental agencies to ensure that the laws are not broken, that violence is not encouraged, and that Canadian resources are not used to foster terrorism anywhere. It is quite another for Premiers and provincial Ministers to be discouraged from meeting with organizations of Canadians linked to and supporting a minority in another country.
If the Department of External Affairs were as sensitive to the Canadian policy of multiculturalism as it is to the representations of foreign Governments, this would be a

February 29, 1988
stronger and more united country. I would urge the Secretary of State for External Affairs to reconsider his discriminatory and divisive action and withdraw his letter to the Premiers.



WINTER OLYMPIC GAMES


Mr. Barry Turner (Ottawa-Carleton):: Mr. Speaker, on Saturday night, February 27, 1988, at the Saddledome in Calgary, during the magnificent Fifteenth Winter Games, a small part of Canada and a major part of Gloucester took a giant step forward on a silver podium.
Katarina Witt of East Germany and Debi Thomas of the U.S.A. shared opposite interpretations of Carmen, but the bubbly little bouncer from Gloucester, our Elizabeth Manley, stole the show. From the first flick of her blades to her last triple jump she was bold, brave, and beautiful. She whittled down from fourth, to third, to second for Canada's second silver medal of the games.
I am certain that not only this Flouse of Parliament but millions of homes in Canada share my pride and pleasure in saying "Liz, you were sterling". Congratulations!



ABORIGINAL PEOPLES


Mr. Keith Penner (Cochrane-Superior):: Mr. Speaker, the Government of Canada's efforts to block approval by the United Nations Fiuman Rights Commission of certain resolutions regarding indigenous rights and indigenous peoples have taken a rather astonishing turn. In a statement delivered by the Canadian observer delegation last Friday, Canada asserts that the James Bay and Northern Quebec Agreement is not a treaty.
Incredibly the Government of Canada appears to have forgotten the provisions of its own Constitution. The Constitution says:
The existing aboriginal and treaty rights of the aboriginal peoples of Canada
are hereby recognized and affirmed.
The Constitution goes on to say:
For greater certainty-treaty rights includes rights that now exist by way of
land claims agreements or may be so acquired.
The James Bay and Northern Quebec agreement is a land claims agreement constitutionally recognized and confirmed. It is a modern treaty. Canada's attempts to deny the treaty status of this agreement are unacceptable and misleading.



WINTER OLYMPIC GAMES

[Stage Direction]
THANKS, CALGARY!
Mr. Gilles Bernier (Beauce):: Mr. Speaker, as a Canadian, I am filled with pride in the dazzling success of the Fifteenth Winter Olympic Games in Calgary.
During 16 days of sports feats and festivities, the whole world met in Canada. The City of Calgary, the Province of Alberta and Canada gave the world an exceptionally warm welcome. The athletes have performed superbly. The incredible facilities built in Alberta will be used by our future Olympic champions and are at the disposal of all Canadians.
Everyone will share in the grandiose success of the Olympics. We can only expect positive fall-outs.
Millions of Canadian men and women were moved as I was myself yesterday evening while watching on television the extinguishing of the Olympic Flame in Calgary.
What wonderful moments we have lived during these 16 days! Thousands of cheers to the athletes and to all those who have, directly or indirectly, contributed to that fantastic celebration.
In Canada, we have achieved national reconciliation. Now, it is to all peoples of the world to search for international reconciliation.
Thanks, Calgary!




Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, Canadians can be proud of the Olympic Games which have just ended in Calgary. We say farewell to 16 days of exquisite athletic competition and achievement at the Fifteenth Winter Olympic Games. I believe Canadians can be particularly proud of the performances of Karen Percy, Brian Orser, Tracy Wilson, Robert McCall and the many other competitors who, whether their participation results were big or small, conducted themselves with grace and style and so often achieved their personal best.
As a native of Ottawa I am especially proud of the achievement of Ottawa's own figure skater, Elizabeth Manley, who captured all our hearts when she won the silver medal in a dazzling effort this past Saturday evening.
February 29, 1988



S. 0. 21

[Stage Direction]
On behalf of the federal New Democrats, 1 would like to say congratulations and thanks to all the Canadian Olympic competitors, to the people of Calgary, and to the many staff and volunteers without whom the 1988 games would not have been possible.
[Translation}
Mr. Speaker, Canadians are proud of the Fifteenth Olympic Winter Games which have just ended in Calgary.
As spokesman for the Ottawa area, I am especially proud of our-
Some Hon. Members:: Time! Time!


Michael Morris Cassidy: -of the performance of our skater, Elizabeth Manley, winner of the silver medal, as well as of the success of all the athletes. Thank you, Calgary! It was a great success.



NEW DEMOCRATIC PARTY


Mr. Gabriel Fontaine (Levis):: Mr. Speaker, allow me to make a short commercial. It is aimed at those ...


Some Hon. Members:: Timing!


Some Hon. Members:: Time, time!


Mr. Speaker:: There are some instances, one, I suppose, would be in the interests of the Olympic movement and expressing thanks to Calgary, in which the Speaker can overlook the clock. If there is some call that I exercise the strict rules, I will, of course, do so. However, the Hon. Member for Levis (Mr. Fontaine) had only just got started.


Gabriel Fontaine: Thank you, Mr. Speaker, and I hope you will allow me to make a short commercial. It is aimed at those who would like to go on a trip to sunny climes at the expense of the socialist party. This party has set up a contest combining the pleasant with the useful. Your financial contribution to the socialist party could allow you to win a trip and even to meet socialist authorities in a few countries.
Thus, the socialists will perhaps be in position to pay their long distance phone calls, because since Wednesday last, the telephone code number of the Hon. Member for Oshawa, Mr. Broadbent that is No. 22843864, is cancelled. They perhaps need money to pay their long distance calls to Quebec?



CANADA-UNITED STATES FREE TRADE AGREEMENT-EFFECT ON SOUND RECORDING INDUSTRY

Sheila Finestone: Mr. Speaker, sound recordings reflect the cultural life of Canada. We rank among the world's largest consumers. Listening to recorded music ranks third as the most popular leisure time activity following watching television and reading newspapers. In the international market, recorded music is Canada's most widely rated cultural product.
Last Thursday I was privileged to participate with the "who's who" of Canadian music in the first forum on free trade and its effect on the recording industry. CITY-T.V. is to be congratulated on this outstanding initiative. This industry was unanimous in its concerns. It is upset that it was never consulted about the devastating effects the removal of the 13.5 per cent tariff will have on imported records and tapes and the positively nefarious "notwithstanding" clause impact on the $700 million recording industry.
These measures will place our recording artists on the fringes of their own domestic market, with Canadians singing Born in the U.S.A. rather than Alberta Bound. Liberals know Canadian songs have something to say and want to promote Canadian music to reflect Canadian values and experiences.



ENVIRONMENTAL AFFAIRS


Mr. Alan Redway (York East):: Mr. Speaker, for years the drinking water of 5 million Canadians has been threatened by chemicals leaking from dump sites along the American side of the Niagara River. Last week a United States court ordered the Occidental Chemical Corporation to pay the costs of cleaning up one of those dump sites, the notorious Love Canal. This decision was made under the provisions of the U.S. Comprehensive Environmental Response, Compensation and Liability Act of 1980, legislation that compels American polluters to correct their past mistakes.
To the great credit of our Government, Parliament is presently studying the new Canadian Environmental Protection Act aimed at preventing future pollution. What we need now is our own version of the U.S. Comprehensive Environmental Response Compensation and Liability Act to compel Canadian polluters to correct their past mistakes as well.
Oral Questions EXTERNAL AFFAIRS

February 29, 1988



TRANSFER OF CANADIAN FROM NEW JERSEY JAIL TO CANADIAN PENITENTIARY

Mr. Dave Dingwall (Cape Breton-East Richmond):: Mr. Speaker, the nightmare for Bruce Curtis, the young Nova Scotian, and his family, is beginning to come to an end. I rise today to congratulate all Members of this House who supported the efforts of Jim and Alice Curtis to have their son Bruce transferred from a prison in New Jersey to a Canadian penitentiary. Last Friday, Governor Kean of New Jersey announced that Bruce Curtis would be transferred to a Canadian penal institution as a humanitarian gesture.
1 would also like to acknowledge the excellent work of Serge Boudreau, from the Department of the Solicitor General, and Murio Lapointe, from the Department of External Affairs. Both of these government employees were very helpful in expediting this particular matter.
Unusual as it may seem, Mr. Speaker, I wish to congratulate the Secretary of State for External Affairs (Mr. Clark) as well as the Solicitor General of Canada (Mr. Kelleher). Their efforts, and the pressure they were able to put upon the Government of the United States, particularly the U.S. administration as well as the State Government in New Jersey, have made this possible. To them and to all Members who assisted in this particular plight, 1 say thank you most sincerely.


Some Hon. Members:: Hear, hear!



ORAL QUESTION PERIOD

['Agreed.']
Lloyd Axworthy: May I just say in response, Mr. Speaker, that 1 am a little surprised that neither the Prime Minister nor the Deputy Prime Minister would be advised about a fairly serious action on behalf of the U.S. Government on Canadian territory.



Lloyd Axworthy: Mr. Speaker, 1 will direct my question to either of the two gentlemen. Several months ago when I raised a similar question with the Secretary of State for External Affairs, he said there would be no action taken by the U.S. Government until the dispute over that territory was resolved. We now have a U.S. order stating that the bids will be open until March 15 and that the United States will determine when it is in its own best interests to do so, to accept those bids.
Will the Government ask the United States administration for a clear statement on what its policy intends to be? And will it not issue immediately a notice of protest that this is a very clear infringement on our sovereignty in a place where we thought we had some agreement that the United States would not continue this kind of action?


Hon. Don Mazankowski (Deputy Prime Minister, President of the Privy Council and President of the Treasury Board):: Mr. Speaker, it was for that very purpose I took the question as notice, because this matter has come up before and there was a clear understanding that there would be no such action, as outlined by the Member, taking place in the disputed area. That has been the situation. That was outlined by the Secretary of State for External Affairs and confirmed by the Minister of Indian Affairs and Northern Development.
The reason I said I would undertake to look into this matter is simply the fact that very rarely has the Member his facts straight, so 1 would not want to accept the premise upon which the question is based.


BEAUFORT SEA DRILLING ACTIVITY-UNITED STATES SALE OF LEASES
Lloyd Axworthy: Mr. Speaker, my question is directed to the Prime Minister. Late last week the U.S. Department of the Interior issued a final notice of sale for leases in the Beaufort Sea. Bids will be received up until March 15 of this year. Included in this notice of sale are 22 blocks within the Canadian jurisdiction. In other words, a United States agency is now putting up for bid, drilling on Canadian territory, in a unilateral fashion. Does the Government of Canada not consider this to be a serious encroachment on Canada's sovereignty?


Donald Frank Mazankowski: Mr. Speaker, without accepting the premise of the question, 1 will certainly take this matter under advisement and raise it with the Minister of Energy, Mines and Resources. It has not been drawn to my attention, but I will certainly refer it to the Minister and get back to the Member as soon as I can.


CANADIAN POSITION
Lloyd Axworthy: Mr. Speaker, I am not asking the Minister to accept my facts. 1 have here the statement of a bid of order from the U.S. Department of the Interior. The Minister may want to have his officials examine that document.
The question I raise is the following. In December, 1986 I raised a question with the Secretary of State and was given some assurances. Last September, my colleague, the Hon. Member for Cape Breton-The Sydneys, raised a similar question. The Secretary of State also gave assurances that time. After each assurance the United States proceeds to go ahead and unilaterally act as if that territory is its own.
When do we stop getting assurances, and when do we start getting some action on behalf of the Government to defend a very valuable part of Canadian territory? When can we expect Government to start standing up for the country?
February 29, 1988


Donald Frank Mazankowski: Mr. Speaker, not only is the Government standing up for the sovereignty of the nation, but indeed northern Canada as well, much to the chagrin of the Hon. Member.
The fact of the matter is that it is a disputed area. My understanding is that the position of the United States has been that there would be no such drilling activity, as is suggested by the Hon. Member, until the issue is resolved. That position remains the same.


EXTERNAL AFFAIRS
Hon. Andre Ouellet (Papineau):: Mr. Speaker, my question is directed to the Prime Minister. Would he agree that the most flagrant attacks on human rights take place in South Africa? On the weekend, Archbishop Desmond Tutu and other church leaders were temporarily detained by government authorities. Some time ago, the Prime Minister stated that if necessary, he would not hesitate to break off diplomatic relations with this country. Considering recent events, does he not think the time has come to take that action?


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, of course we earnestly deplore the deterioration of an already unacceptable situation in South Africa. The action taken against church leaders over the weekend was particularly reprehensible. The Canadian Government, through the Secretary of State for External Affairs, has already made known its feelings of profound indignation regarding this development. The South African Ambassador has been called to the Department of External Affairs for a meeting that will take place within the next few hours, and the Secretary of State for External Affairs will probably have some new statements to make upon his return to the House. I must say I fully share the views expressed by the Hon. Member and speaking for all Members, I must say I deplore a situation that becoming increasingly unacceptable and intolerable for all those who believe in democracy for South Africa.


SOUTH AFRICAN GOVERNMENT'S BAN ON ACTIVITIES OF OPPOSITION GROUPS
André Ouellet: Mr. Speaker, my supplementary question is directed to the Prime Minister. Does the Prime Minister realize that the South African Government, by banning the political activities of 18 opposition groups, has literally made a declaration of war on peace, justice, and human rights? How far does the situation have to deteriorate
Oral Questions
before the Canadian Government takes the appropriate action?
In answer to my first question, the Prime Minister stated that he is calling in the South African Ambassador and that he will wait for the Secretary of State for External Affairs to make a statement. Does the Prime Minister not have this responsibility, and should he not make the statement right away in the House?


Martin Brian Mulroney: Mr. Speaker, 1 think that few people would accuse the Government of Canada of not having provided leadership in regard to the reprehensible situation which exists in South Africa. In fact, if there is an element of tragedy that enters into this, it is the general regret of all Canadians that the actions taken by the Government in this House were not taken some years ago so as to provide more pronounced and dramatic leadership.
I indicated that the Secretary of State for External Affairs, who was instrumental in providing this leadership, is unfortunately out of the House for the day. He has instructed that the South African Ambassador be called in, in order that the Government of Canada may convey to him directly the profound regret, dissatisfaction, and dismay of all Canadians at this progressive deterioration in an already explosive situation.
We are following it. We are monitoring it hour by hour. We have excluded no options. We have excluded no alternatives. We will act in the interests of those of our allies, and the people of South Africa, at the most appropriate moment.


REQUEST THAT GOVERNMENT SEVER ALL ECONOMIC RELATIONS WITH SOUTH AFRICA
Howard Douglas McCurdy: Mr. Speaker, my question is directed to the Right Hon. Prime Minister. I am sure the Prime Minister would have to agree that the events that have been occurring over the last few days in South Africa constitute a reiteration of the events before the rise of Nazism in Germany.
There are neo-Nazis demonstrating in the street with the sympathy of the Government, clerics are being arrested, all political activity by every significant black organization is banned, and we hear words like "remorse", "regret", and "dissatisfaction" being used.
Is it not time that the Prime Minister lived up to his commitment given at the United Nations that, if there was not progress made toward the dismantling of apartheid, the Government would sever all economic relations with South Africa?
The Secretary of State has stated that he has in his vest pocket additional sanctions to be imposed. Will the Government not impose them now? Will the Government not bring home the Canadian Ambassador to South Africa to discuss with him the status that should continue with respect to the Canadian Embassy in that country?

February 29, 1988
Oral Questions


Martin Brian Mulroney: Mr. Speaker, surely my hon. friend will recall the events that led up to the Commonwealth meeting in Vancouver, and the leadership that the Government of Canada and the people of Canada provided, notwithstanding some ferocious attacks from other quarters. We stood firm in the view that I enunciated on behalf of the Government many years ago, that apartheid was an evil and would be resisted and fought by the Government of Canada at every opportunity and in every circumstance.
This was followed up by a tangible accomplishment. It was not a perfect one, but a tangible one, when the Secretary of State for External Affairs went to southern Africa and met with the leaders of the Front Line States. He is now the Chairman of the Front Line States Foreign Ministers Conference in regard to dealing with apartheid and the tangible measures that can emerge in order that we may be helpful to those suffering under apartheid.
We have retained clearly as an option the severance of all relationships with the Government of South Africa. The Secretary of State for External Affairs, I, and my colleagues continue to believe that, at the moment, we can be of more and greater help to those being oppressed in South Africa, namely, the black majority, by retaining the types of initiatives that we are implementing. Once we sever relations, we cease to be a player.
For example, I point out to my hon. friend that the Secretary of State for External Affairs was capable of indicating Canada's unique and helpful role by, within 24 hours, meeting in southern Africa with the leaders of the Front Line States and in Pretoria with the Foreign Minister of the Government of South Africa.
While dialogue remains possible, we believe it can be helpful to the black majority. We will continue to fight for black majority rights in South Africa.


REQUEST FOR IMPOSITION OF TOTAL SANCTIONS
Howard Douglas McCurdy: Mr. Speaker, the Prime Minister describes reactions that were appropriate to a different time and a different set of circumstances, a set of actions premised on the notion that it was possible to bring the South African Government to the table to talk to the representatives of the black population.
Does the Prime Minister not recognize that those days are ended, that the South African Government has pronounced to the entire world that it will not speak to the legitimate representatives of the black population there, and that no further progress can be made unless a clear message is given by this Government that this type of refusal to deal with the appropriate representatives of the majority will not be tolerated by the imposition of those economic sanctions that the Prime Minister stood before the UN and said that he would impose if there was no progress? It is about time.


Martin Brian Mulroney: Mr. Speaker, my hon. friend says: "It is about time". He may be
right. He is making a value judgment on a very complicated, explosive situation.
If he cares to go back even further than the Vancouver conference in regard to Canada's role, Canada was instrumental at the Nassau First Ministers' Conference in constituting the Eminent Persons Group and causing that group to initiate dialogue, very hopeful dialogue in the view of most world leaders, in southern Africa.
I agree that the actions taken at that time, arbitrary and pernicious actions by the Government of South Africa, undermined this, I think quite noble, attempt at dialogue to bring about peaceful change in South Africa.
We have encountered, it is true, more obstacles than I would care to count, and we have had more disappointments than most people should be asked to bear, particularly the majority in South Africa. However, 1 think the signal which is coming from many of them to Canada is to continue this initiative to see if we cannot engage in that dialogue. If we cannot be helpful in a definitive way, then of course we will not hesitate to take what we believe to be the solution at that time, namely, the severance of relations.
We are receiving counsel and advice from people friendly to this proposition in South Africa to attempt to maintain dialogue at this time. We always reserve the right for the Parliament and the Government of Canada to sever relationships if required.


OFFICIAL LANGUAGES
Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, my question is directed to the Minister of Justice. In fact, he was expecting it. I waited for him Thursday and Friday, so today's the day. My question is about the Supreme Court decision concerning the Province of Saskatchewan which, as we all know, will have to translate all the province's statutes passed since 1905. The Minister is also aware that I asked a question Friday about an alternative, namely, the province could proclaim itself bilingual by adopting a statute that would make it unilingual.
My question to the Minister is this: To avoid any misunderstanding or situations that might be very difficult indeed, and considering the Supreme Court's decision affecting Saskatchewan, is the Minister prepared to make a reference, asking the court to make a similar decision with respect to Alberta, which, as we know, was carved out of the same Northwest Territories and is the subject of an identical or almost identical Act?
February 29, 1988


Hon. Ray Hnatyshyn (Minister of Justice and Attorney General of Canada):: Mr. Speaker, I was absent from the House last week, but the responses given by my colleagues, the Minister of Transport and the Minister of Communications, essentially set out the parameters of the position of the federal Government.
As the Hon. Member will understand, these are essentially provincial matters of jurisdiction. 1 understand as well that the Province of Saskatchewan in particular is reviewing its options, and we are very much interested in the decisions that will be made by the Province of Saskatchewan. We are in ongoing communications with the provincial Governments on such matters and will continue to observe what is happening there. The offer of assistance has been made and is in fact there, should the province decide to solicit our assistance.
With regard to the Province of Alberta, the Hon. Member will know that there are other matters of litigation in respect of similar questions dealing with Alberta. My officials are looking at those pieces of legislation as well to see what is involved in that matter, and we are considering the implications of the judgment in the Mercure case in the Supreme Court of Canada.


APPLICATION OF SUPREME COURT DECISION TO ALBERTA
Jean-Robert Gauthier: Mr. Speaker, the Minister will concede that these legal procedures are costly and that in terms of human resources they can be exhausting for minority groups.
Given that the federal Government can answer a question which begs to be answered, that is, does the judgment on Saskatchewan apply to Alberta, and therefore avoid a long delay through the court system by asking the Supreme Court to state clearly that Alberta is subject to the same judgment given on February 25, would it not be in the interest of all Canadians for the Government to take that initiative now and ask the Supreme Court to make a decision by reference?


Ramon John Hnatyshyn: Mr. Speaker, without getting into the legal niceties of the matter, with respect to matters which are essentially in provincial jurisdiction-and I think that is an important consideration the Hon. Member will appreciate in respect of references-our position respecting the official languages of Canada is quite clear in our federal domain. I think the Prime Minister and the Government have shown outstanding leadership in respect of this position across the country.
I reiterate the fact that we remain ready, willing, and able to render any assistance whatsoever in the furtherance of the equality of languages across the country which may in fact be solicited by the provinces. In terms of the Province of Alberta,
Oral Questions
the same offer goes to that province as goes to the Province of Saskatchewan.


FINANCE
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is directed to the Minister of Finance. The Minister knows perfectly well that the Government's proposed changes in the flow-through shares program may, directly or indirectly, threaten the existence of from 30,000 to 40,000 jobs. Will the Minister now respond positively to requests by municipal councils, business people and workers whose jobs are threatened, and say that the Government wil not reduce the benefits created under this program?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, if this is not the clearest example of the Leader of the NDP talking out of both sides of his mouth, I do not know what is.


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: On the one hand the NDP says: "Get rid of all these tax gimmicks"-


John Edward Broadbent: No, no.


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member should read his own Party literature which says: "Get rid of all these tax gimmicks". His colleague sitting right next to him is the one who is leading the battle, and the one who is just between the two of them, and behind, is the third man. All three of them are saying: "Get rid of these tax gimmicks because they are things that help the rich and we have got to avoid all these tax gimmicks"-


Mr. Boudria:: That's before they became rich.


Michael Holcombe Wilson: That is right. The Hon. Member for Glengarry-Prescott-Russell-


John Edward Broadbent: Agreeing with the Liberals.


Michael Holcombe Wilson: -is saying that before the NDP got ahead of the Liberals in the polls they were not in favour of all these things.


John Edward Broadbent: Mr. Speaker, I would be happy to send a speech going back to 1984 to the Minister and a letter that he received from our finance critic last year, which made it clear that the NDP is opposed to tax exemptions that do not have a net benefit to the community and that we favour those that do. If he does not understand that, we do.

February 29, 1988
Oral Questions


Some Hon. Members:: Hear, hear!


John Edward Broadbent: Just because it requires a little subtlety in thinking, maybe the Tories could try it just for once-


Mr. Speaker:: We seem to be getting into a bit of an argument here. I wonder if the Hon. Leader of the New Democratic Party could put his question.


John Edward Broadbent: Your Honour knows that there is no place for arguments in the House of Commons.


REQUEST FOR RETENTION OF BENEFITS
John Edward Broadbent: Mr. Speaker, I would like to ask the Minister if, instead of dealing with rhetoric, he would deal with the question. Since these benefits are among those which have had a net community benefit-and this has been recognized by business people-


Some Hon. Members:: Oh, oh!


John Edward Broadbent: -municipalities, and workers-1 want to ask the Minister if, instead of taking steps that will cut them in half and ultimately reduce them, he will now give assurance to those communities that those benefits which have produced jobs will be kept in place.


Michael Holcombe Wilson: Mr. Speaker, give the NDP a little sniff of power and their principles go right out the window.


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


John Edward Broadbent: You are still in third place, Michael.


Michael Holcombe Wilson: The Leader of the New Democratic Party should understand that Canadians are not stupid about these things. Canadians understand consistency. Canadians understand when the NDP is going totally against gimmicks in the tax system.
I have something here in my hand which states: "Tax system is a poor means of assisting economic development in regions of high unemployment".


Mr. Epp (Provencher):: Who said that?


Michael Holcombe Wilson: Who said that? That is from the NDP Tax Probe dated September, 1986.


Some Hon. Members:: Oh, oh!


Michael Holcombe Wilson: Let me, if 1 may, Mr. Speaker, address the issue, now that we know where the NDP stands on all of these different matters.
We have seen a major drop in equity financing of all sorts. Prior to October 19 of last year we had $7 billion of equity financing. Since that time that amount has dropped to about $450 million. So there has been a major change in stock markets which affect flow-through shares and all other forms of equity financing.
In December of 1987 we made some changes to the proposal that we put forward in June of 1987 on tax reform which improved the provisions for flow-through shares and put flowthrough shares in the position in which they are the best one of the few tax motivated investments of the federal Government.


John Edward Broadbent: That has worked.


Michael Holcombe Wilson: The Hon. Member says that it has worked. I am just saying that we made some changes, if he will listen to the answer.
We made some changes in December of 1987 which improved the quality and the tax motivated status of flowthrough shares. I think that is an important change.
In addition, I have said that 1 will meet with representatives of the industry-


Some Hon. Members:: Order!


Mr. Speaker:: The Hon. Member for Oshawa.


TERMS OF CANADA-UNITED STATES FREE TRADE AGREEMENT
John Edward Broadbent: Mr. Speaker, I hope the Minister will read the rest of the tax document produced by the NDP from which he quoted. He will find that it is quite consistent with what 1 have had to say.
I would like to ask the Minister if he will now deal with the question. He evaded it in replying to two of the questions that I asked. I would now like to ask him this.
Is the reason that he has not replied, and is the reason that this beneficial proposal will be phased out in the first year of the proposed trade agreement between Canada and the United States entirely related to the absence of such a program in the United States? Once again, is the American tax system as it relates to its regional development programs being given priority by the Conservative Government over real Canadian needs? Is that the issue?


Michael Holcombe Wilson: Mr. Speaker, that is absolute garbage-absolute garbage.


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: We made the decision. We announced the decision on flow-through shares in June of 1987, before the trade agreement was entered into. After the
February 29, 1988

trade agreement was entered into we improved the provisions for flow-through shares. We improved the provisions for flowthrough shares in December of 1987, after the trade agreement was entered into, compared to June of 1987. How the Hon. Member in his warped thinking could come to that conclusion I do not know.


CONFLICT OF INTEREST ACT
Mr. Pat Nowlan (Annapolis Valley-Hants):: Mr. Speaker, my question is for the Minister of Justice. 1 have given him notice of it.
Has the Minister sought an opinion from the law officers of the Crown to ascertain if those clauses of Bill C-114, the conflict of interest Bill, relating to spouses are in violation of the Charter of Rights? If not, is he prepared to refer the matter to the Supreme Court for a ruling?


Ramon John Hnatyshyn: Mr. Speaker, I appreciate the notice that the Hon. Member gave me with respect to his question.
The fact is that the Hon. Member will know that as Minister of Justice I am mandated to review all legislation that comes before the House with respect to compliance with the Charter of Rights and Freedoms. We certainly understand that this particular provision is one of sensitivity. However, 1 think that we have addressed it in a way which protects the right of privacy of spouses. In cases where there is some relationship to the duties performed by a Member of Parliament, the performance of their duties which may be implicated by the interests of a spouse, then they have become legitimately matters of concern to the commission.
We have tried to deal with this matter in a sensitive way, understanding that spouses have the right to carry on independent lives and professions. 1 think that the approach we have taken in the legislation is an appropriate one which will meet the standards and tests of the Charter of Rights and Freedoms.


FINANCIAL INSTITUTIONS
Miss Aideen Nicholson (Trinity):: Mr. Speaker, my question is for the Minister of Finance. It concerns a resolution adopted by the City of Toronto on January 11 condemning him and two other Toronto Ministers for their failure to ensure that the
Oral Questions
international banking centre legislation was national in scope instead of being restricted to two locations.
Today, seven weeks after the City of Toronto reminded the Minister of his duty, will he tell the House what he proposes to do?


Michael Holcombe Wilson: Mr. Speaker, 1 am not quite sure that I follow the Hon. Member's question. The legislation was passed at the end of last year and it is law.
What I will point out, and I am sure she is very much aware of this, is that there have been a number of initiatives taken by the Government relating to financial institutions.
The international banking centres are one. The financial institution reform is another. Toronto has been a great beneficiary of that. Warburg's has come to Toronto. Deutsche Bank has bought an interest in a Toronto-based firm. Goldman Sachs is coming to Toronto. Three of the largest investment banking firms in Japan are joining the Toronto Stock Exchange. Security Pacific, a major bank in California, has invested in a major way into Burns Fry of Toronto. So Toronto has been a major beneficiary of the policies of the Government relating to financial institutions.


TORONTO CITY COUNCIL RESOLUTION
Aideen Nicholson: Mr. Speaker, apparently the Toronto Council is less enchanted than is the Minister. On February 17 the Council voted to launch a constitutional challenge to the Minister's legislation, an absolutely unheard of situation.
Further, the Minister is locked in battle with both the Province of Ontario and the Province of Quebec about financial institutions which is why the legislation has been delayed. I ask the Minister again if he intends to do anything to stop this process whereby he has been pitting region against region?


Some Hon. Members:: Oh, oh!


Michael Holcombe Wilson: Mr. Speaker, that out of the mouths of the Liberal Party is quite outstanding. The Liberal Party was the Party that divided the country in a way that has never been seen before since Confederation.
The Hon. Member has to stand up to say where she stands and where her Party stands. Is she in favour of cancelling this? Is she going out to Vancouver and telling the people of Vancouver? Is she going to Montreal and telling the people of Montreal? Or is she wearing a downtown Toronto hat?


Aideen Nicholson: National in scope is what I said.


Michael Holcombe Wilson: I know that she is very much in the pockets of the people of Bay Street-


Some Hon. Members:: Oh, oh!


Mr. Speaker:: The Hon. Member for Kamloops-Shuswap.

February 29, 1988
Oral Questions PETRO-CANADA


PRIVATIZATION-GOVERNMENT POSITION
Nelson Andrew Riis: Mr. Speaker, my question is directed to the Right Hon. Prime Minister who will know from his recent trip to the West just how popular Petro-Canada is in Canada these days, especially in western Canada. Last week the Minister of Energy, when he was asked about the privatization of Petro-Canada, said that it is not a question of should we, it is really a question of timing. Yet the Deputy Prime Minister indicated in the House last week that in fact that is not the case.
Will the Prime Minister take the time to explain and clarify just what the Government's position is in terms of the privatization of Petro-Canada?


Martin Brian Mulroney: Mr. Speaker, my hon. friend is quite right. When 1 was in western Canada again recently I was able to see both the popularity of Petro-Canada and the popularity of the federal Government.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: Half of that is believable.


Martin Brian Mulroney: Everywhere I went, people said: "There is the shareholder of Petro-Canada".
I think this indeed provides me with an opportunity, on behalf of all Members of the House, to congratulate the Canadian athletes and all associated with the Olympics in Calgary.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: Why are the NDP not applauding?
With regard to Petro-Canada, it has been made clear that no decisions have been taken in respect of this matter. When a decision is made, it will be announced in an appropriate manner. I suspect that my hon. friend will be one of the first to know.


REQUEST THAT GOVERNMENT GIVE NON-PRIVATIZATION ASSURANCE
Nelson Andrew Riis: Mr. Speaker, there is obviously some confusion surrounding this issue with the contradiction presented by the two senior Ministers. The Prime Minister knows how Canadians feel about this issue since an election campaign not many years ago in which Canadians made a very clear statement as to their feelings.
Would the Prime Minister be prepared to rise in his place to say that the Government of Canada is not prepared to privatize Petro-Canada? In other words, would he say that the Government is not prepared "to sell the flame"?


Martin Brian Mulroney: Mr. Speaker, I will not comment on that last point, but I should in fairness ask my hon. friend to look at Hansard of February 24, 1988, where the Minister of Energy said:
That is why, although the Cabinet has yet to make a decision at this time, the question of Petro-Canada is still being examined, both in my Department and in other government agencies.
He went on to say:
-I would like to point out that the present Government will make a decision about privatizing Petro-Canada when it believes it is in the interests of Canada and Canadians to do so.
Surely my hon. friend will not quarrel with the logic of that premise.


INCOME TAX ACT
Alan Redway: Mr. Speaker, my question is directed to the Minister of National Revenue. The NDP is offering its contributors an opportunity to win a free trip to Australia and New Zealand.


John Edward Broadbent: Want to buy a ticket?


Alan Redway: I would ask the Minister to launch an immediate investigation to ensure that the NDP is not ripping off Canadians by using tax deductible political contributions to fund this NDP vacation lottery.


John Edward Broadbent: Get CSIS to do it.


Donald Frank Mazankowski: Better have a commission of inquiry.


Some Hon. Members:: Oh, oh!


Elmer MacIntosh MacKay: Mr. Speaker, I thank the Hon. Member for his question. This initiative sounded so attractive to me that I briefly considered sending some money myself. However, I thought it might be misinterpreted under the circumstances.
Seriously, the Income Tax Act does not require any restrictions on how political Parties deal with their funds in terms of contributions. The Chief Electoral Officer has some jurisdiction when it comes to how funds are disbursed, but where a political Party would run into difficulty would be if it simply received and redirected funds for the benefit of a specific person. I take the question seriously-


Some Hon. Members:: Oh, oh!


Elmer MacIntosh MacKay: Perhaps I should say to my friend, the Leader of the New Democratic Party, for the benefit of a named individual. It is a serious question and I will take it as representation.
February 29, 1988

Oral Questions
SIKH ORGANIZATIONS	SPORTS


MINISTER'S LETTER TO PREMIERS
Mr. Sergio Marchi (York West):: Mr. Speaker, in the absence of the Secretary of State for External Affairs my question is for the Prime Minister and it concerns the letter of the Secretary of State to some Premiers advocating the boycotting of three Canadian Sikh organizations.
Given that the Government is arguing that Canadian citizens belonging to these three Canadian groups be ignored by our political institutions and given that this action has seriously tarnished the community's reputation, I ask the Prime Minister how the Government can blanket the entire Sikh community with collective guilt? Will the Prime Minister now justify under what authority and for what reasons the Government is promoting the denial to certain Canadians of the enjoyment of the full right of citizenship in this country?


Hon. Pat Carney (Minister for International Trade):: Mr. Speaker, I should point out that the letter sent by the Secretary of State for External Affairs made it very clear that most Sikhs, by far, are good Canadian citizens and do not engage in this kind of activity, but he felt it necessary, in his role as Secretary of State for External Affairs, to bring to the Premiers' attention activities by three groups which he felt were not in the national interest. That was his role and that is how he executed it.


REQUEST THAT MINISTER'S LETTER BE TABLED
Sergio Marchi: Mr. Speaker, the Minister surely knows the burden of stigma that this community will have to carry and must overcome as a result of this questionable government action. She now has the opportunity and indeed the obligation to clarify and set the record straight.
If it is not the Prime Minister who will answer, I ask the Minister again, will she explain on behalf of her colleague, the Secretary of State for External Affairs, the precise rationale for the Government's position which was communicated only to some Premiers? Will she table the letter and all relevant information so that this House, which has been kept in the dark to date, may come to understand fully both the domestic and the foreign reasons underlying the Government's action?


Pat Carney: Mr. Speaker, this Government does not agree with the promotion of violence within this country. The Secretary of State made that clear in the letter he sent the Premiers. I would be glad to table the letters to the Premiers at the first opportunity.


BEST EVER PROGRAM-FUNDING OF OLYMPIC SPORTS
Mr. Iain Angus (Thunder Bay-Atikokan):: Mr. Speaker, my question is directed to the Minister of National Health and Welfare in the absence of the Minister of State for Fitness and Amateur Sport. As Canadians celebrate in the afterglow of the Calgary Olympics, they are asking themselves how we are preparing for 1992 and beyond. Will the Government continue to fund the existing Winter Olympic sports at the same or greater levels as the Best Ever Program so that our Canadian team can build on the momentum of our growth at the 1988 Calgary Olympics?


Arthur Jacob (Jake) Epp: Mr. Speaker, I think everyone in the House would want to commend not only the City of Calgary and the many volunteers who contributed to the XV Winter Olympic Games, but 1 think people would especially like to congratulate the Minister of State for Fitness and Amateur Sport for the role he has played.


Some Hon. Members:: Hear, hear!


Arthur Jacob (Jake) Epp: I am sure the-does the Hon. Member disagree with that?


Sergio Marchi: A gold medal for the number of press conferences.


Arthur Jacob (Jake) Epp: He should have received a gold medal, and I am sure the House would like to present him with one at the appropriate time.
The Hon. Member will know that the Minister has indicated that he will be making a statement in respect to the Best Ever Program for the 1992 Winter Games. I cannot add any more to that. The Minister will make the statement at the appropriate time.


REQUEST FOR ADDITIONAL MONEY FOR ATHLETES
Iain Francis Angus: Mr. Speaker, given that 40 per cent of the members of the current Canadian team list their occupations as full-time athletes, will the Minister speak to his colleague to ensure that Canadian athletes receive much more than the $650 per month athletes like Karen Percy, Elizabeth Manley and Gaetan Boucher currently receive for their cost of living? I think it is a shame that Canadians are only paid that much to compete for our country.


Arthur Jacob (Jake) Epp: Mr. Speaker, I think the Hon. Member should be reminded of the words the Minister of State for Fitness and Amateur Sport has used. The Government has contributed and will continue to contribute, but it is not a system whereby the Government fully pays the athletes. Their families have made sacrifices as well, and I think that will continue. For the Hon. Member, one

February 29, 1988
Point of Order-Mr. Wilson
day after the closing of the Olympics, to try to put a value on that kind of contribution does not serve him or his Party well. The Minister will make a statement at the right time.
[ Translation]


Mr. Speaker:: I will recognize the Eton. Member for Outremont, for one question, please.


CRIMINAL CODE
Mrs. Lucie Pepin (Outremont):: My question is directed to the Minister of Justice.
Recently, we had several instances of family violence that could have been prevented. Three women were killed by their husbands during the past six months, in Montreal, on the weekend, a woman was stabbed and beaten by her husband.
These women had asked the authorities several times for protection against their husbands or ex-husbands but failed to obtain that protection.
Could the Minister inform the House whether he is prepared to make changes or amend the present legislation to make threats by husbands or ex-husbands a criminal offence of the same magnitude as threats by others? It seems that under our present legislation, everyone is protected except women who are killed by their husbands.
What does the Minister intend to do in the way of immediate action? Is he prepared to call a conference of provincial Justice Ministers or set up a program like Ontario's Spouses' Assault Program?
What is the Minister going to do in the way of immediate action?


Ramon John Hnatyshyn: Mr. Speaker, I appreciate the question by the Hon. Member because it is a serious question about a serious social issue. This Government, through my colleague, the Minister of National Health and Welfare, and my Department, is working actively on the whole question of family violence as it relates to federal responsibility and jurisdiction. As the Hon. Member pointed out, there is a very significant provincial jurisdiction in this matter and we are attempting to co-ordinate our actions with provincial jurisdictions.
This is a complex issue which is not capable of simplistic resolution. I take the suggestion concerning Criminal Code amendments as a representation and we will give serious consideration to the Hon. Member's proposals.


Mr. Speaker:: I regret that the time for Question Period has expired. Did the Hon. Minister of Finance want to rise?


POINT OF ORDER
Michael Holcombe Wilson: Mr. Speaker, during the course of Question Period I responded in a somewhat offhand way to my colleague from Trinity. If she took exception to any allusions which might have been expressed in that offhand comment I would point out I simply wished to poke a little fun her way. I am sure she will understand that I did not mean anything in any way derogatory.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: I should advise the House that under the circumstances I might ask the Hon. Member for Trinity (Miss Nicholson) if she feels that was sufficient.


Aideen Nicholson: Mr. Speaker, I of course accept the Minister's withdrawal.


Douglas Grinslade Lewis: Mr. Speaker, this morning during Routine Proceedings the suggestion was made that we would ask for unanimous consent to revert to tabling of committee reports to allow the Hon. Member for Sarnia-Lambton (Mr. James), who was unfortunately delayed, to present a legislative committee report. I ask for such unanimous consent at this time.


Mr. Speaker:: Is the House in agreement?


Some Hon. Members:: Agreed.



ROUTINE PROCEEDINGS


Mr. Ken James (Sarnia-Lambton):: Mr. Speaker, as chairman of the legislative committee on Bill C-204, an Act to regulate smoking in the federal workplace and on common carriers and to amend the Hazardous Products Act in relation to cigarette advertising, I have the honour to present Bill C-204 to the House with amendments.
I want to take a brief moment to thank all of those who assisted in the study of this Bill. The Bill establishes a
February 29, 1988

precedent in our long history of parliamentary traditions. Under House reform, Private Members' Bills, as indicated by this Bill, now have a very healthy chance at passage. This is a welcome situation and I applaud the Government for its interest and efforts to assist Private Members.
Portions of the committee's hearings were a little contentious and emotional but 1 thank all Members for their cooperation and diligence in the study of this Bill. Over 100 witnesses were heard and over 100 written briefs presented. I want to thank the Library of Parliament research staff for their able assistance throughout our deliberations. Additionally, the assistance of the office of the Law Clerk and the Public Bills office was greatly appreciated.
All committee members and support staff have put in exhaustive and demanding hours on the study of this Bill. I am proud to present it to you and the House today as the fruits of our labour.
[Editor's Note: See today's Votes and Proceedings.}


POINT OF ORDER
Frederick James (Jim) Hawkes: Mr. Speaker, my point of order relates to the period set aside in our daily agenda for statements and, in particular, to what happened this afternoon.
Members will recall that under Standing Order 21 they may be recognized under the provisions of Standing Order 19(4) to make a statement for not more than one minute. We have set aside 15 minutes in our daily proceedings for that exercise. There is a growing trend, which is perhaps exemplified by behaviour in today's statement period, of exceeding that time.
1 bring to your attention the fact that eight opposition Members made statements to the House and seven of them exceeded the one minute length. In fact, two of them exceeded one minute and 20 seconds, which is really quite long. On the government side, however, only one Member exceeded the time limit and some were down to as low as 41 seconds.
I think that the pattern of recognizing government Members and opposition Members alternately is probably a good one given our traditions. However, I suggest that either we have to initiate some self-discipline to keep it under one minute or, if opposition Members are going to consistently exceed the time limit, then fewer of their Members should be recognized. If government Members stay disciplined we should not be penalized by being denied the opportunity to make our statements simply because opposition Members exceed the time limits and eat into the time ordinarily available for government Members.
Point of Order-Mr. Hawkes
Alternatively, we might want to begin to recognize Members according to the number of Members in the House of Commons from each Party. That would result in three-quarters of the time going to the government side and one-quarter to the Opposition.
I hope you will take this under due consideration. Perhaps Members opposite would like to reflect upon it. However, I think the situation is such that Members on this side would have to fight to maintain the rule of 60 seconds. It is an important issue with respect to government Members having access to that statement period.


Jean-Robert Gauthier: Mr. Speaker,
I would like to respond to the Parliamentary Secretary for nitpicking. We do not have one minute timers built into our bodies. When we make our statements we share with the Chair the expectation that someone at the Clerks' Table will tell us when our time is up. That has been the practice over the last three and a half years. What the Hon. Parliamentary Secretary has said is to me a vote of non-confidence in the ability of the Chair or the Table to maintain the time constraints.
I can understand why the Hon. Parliamentary Secretary had his time-clock today. 1 saw him keeping time and doing the work of one of our clerks.


Mr. Guilbauit (Saint-Jacques):: He has to keep busy somehow.


Jean-Robert Gauthier: Yes, but I really do not see why he would be nit-picking to the extreme of complaining about this to the Speaker of the House who has responsibility for everything concerning those statements. I think it is wrong for him to raise it at this time. If he has nothing else to do, I recommend that he get up and make a statement some time as to what he feels is important in his constituency. Maybe we can listen to him and if he has a good point we will give him an extra five seconds.


Nelson Andrew Riis: Mr. Speaker, I, too, want to rise for a moment to react to this rather trivial point raised by the Parliamentary Secretary.


Mr. Winegard:: It is not trivial.


Nelson Andrew Riis: We do have a procedure to deal with these, if you like, nit-picking issues. House Leaders meet regularly and the board meets regularly. There are ongoing discussions. I do not consider this a normal point of order but, rather, a challenge to the Chair.
The Parliamentary Secretary is saying that the Speaker has been unable to determine the appropriate length of statements and that the Speaker ought not to have the right, on occasion, not to see the clock. It has been a long-standing practice of this House that on occasion, whether in a speech or some other intervention by an Hon. Member, the Speaker decides whether

February 29, 1988
Borrowing Authority
or not a Member is permitted to take somewhat longer than the traditional time. Efowever, to be arguing here whether a statement should be 53 seconds or 65 seconds is insanity. If that is the kind of priority which the Parliamentary Secretary brings to his office, perhaps he should reconsider his position.


Hon. Herb Gray (Windsor West):: Mr. Speaker, if you are going to give consideration to the point raised by the Parliamentary Secretary with regard to the length of time taken for statements under the relevant Standing Order, I would also respectfully invite you to consider the length of time taken by Ministers in answering questions during Question Period. I recognize that there is no specific length of time provided for in the rules with regard to answers, nor is there, I admit, with regard to questions. However, it seems to many of us that Ministers answering questions are taking more and more time than has been the case in the past and are, therefore, leaving less and less time for questions
Another matter which I would like you to take into account is the length of time being taken by government Members in applauding the answers given by Ministers. I will leave it to the judgment of others whether the answers really deserve the lengthy applause they often get, but the time taken for this applause also takes away from the time for asking questions.
There is a limitation in the rules on the length of time of Question Period. I realize that you try to look upon what the rules say in that regard in a constructive way, Mr. Speaker, and we all appreciate that. If you feel it is necessary to deal with the point raised by the Parliamentary Secretary, then I respectfully say that the points I raised are much more important.


Frederick James (Jim) Hawkes: Mr. Speaker, I have enjoyed this exchange. As usual, there was wisdom from the Member for Windsor West (Mr. Gray) in his capacity as House Leader. I think that through this brief exchange we have identified that there are concerns about the use of that 60-minute period. The Government has historically raised questions with regard to the length of preambles, as another example. The purpose of the 60 minutes is to allow a maximum amount of input including questions, answers, and statements made on behalf of constituents.
I believe I detected a consensus of willingness of all three Parties of the House to support you, Mr. Speaker, in an attempt to bring a little brevity into all aspects of the 60 minutes in order that more Members may make statements, ask questions, and receive answers. Certainly the Government would be pleased to join such a consensus.


Mr. Speaker:: 1, of course, want to thank all Hon. Members for their interventions. The rule does, of course, call for 60 seconds. If one looks back over an extended period of time one will see that while there have certainly been occasions when the Chair has allowed an Hon. Member to extend that time, especially if, at least in the opinion of the Chair, the issue was
of some considerably importance, at other times, of course, the Chair has been more exacting.
However, with regard to the intervention of the Hon. Parliamentary Secretary, I would hope that all Hon. Members on both sides would do as much as they can to constrain themselves to a minute or less in the interests of their colleagues who, of course, will be prevented from making their statements if a number of Hon. Members exceed the time allotted to them.
However, I take some comfort from the comments of the Hon. Member for Windsor West (Mr. Gray), the Hon. Member for Ottawa-Vanier (Mr. Gauthier), and the Hon. Member for Kamloops-Shuswap (Mr. Riis). Their position that there has to be some flexibility shown from time to time by the Speaker with regard to the absolute strict application of the rules is, I am sure, shared by the Hon. Parliamentary Secretary.
With regard to the comments of the Hon. Member for Windsor West on the length of time that some Ministers take to answer and the fact that time is used up sometimes by applause and sometimes by something less admirable on the government side which does take time and which sometimes involves the intervention of the Speaker, that all uses up time. I know that any Members to which I refer are very much the exception on the opposition side, but sometimes preambles go on rather longer than is perhaps absolutely necessary to make the point.
1 welcome the comments which have been made from both sides of the House. I am sure we will all strive mightily to ensure that we conduct ourselves in here in such a way that we are being as fair as is reasonable to all other Hon. Members. I thank Hon. Members for their interventions.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson (Etobicoke Centre) that Bill C-109, an Act to provide for borrowing authority, be read the second time and referred to a legislative committee.
Mr. Speaker:: When the House rose at 1 p.m. there were five minutes remaining in the question and comment period following the speech of the Hon. Member for Humboldt- Lake Centre (Mr. Althouse). The Hon. Member is not here. Resuming debate.


Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, it is a pleasure to be able to speak on Bill C-109, a Bill through which the Government is seeking to borrow $25.3 billion. In light of the Government's history of managing the
February 29, 1988

economy of the country, it is quite nerve-racking to think of this amount of borrowing authority in the hands of the Government.
First, the Government brought this Bill forward before the Estimates were tabled which, as far as I was concerned, was a deliberate affront to the Members of this House. I do not think that that is any indication that the Government has any idea of what it wants to do.
Let us look at some of the things which the Government is trying to do. The Minister of Finance (Mr. Wilson) said in 1984 that he did not believe that taxes should be raised any more, that taxes were high enough in Canada. That was his position at that time. Since the federal election in September 1984 the Government has increased excise taxes on gasoline by five cents a litre. Transposed into gallonage, that increase is 23 cents a gallon.
In December 1979 the then Progressive Conservative Government, in presenting its Budget, stated that it was going to increase the excise tax on gasoline by 18 cents a gallon. The Government has already exceeded the figure by which that former Conservative Government was going to increase the excise tax on gasoline and that Government was defeated largely on the basis of that proposed taxation.
If you add to that 23 cents a gallon the increase which the Government has put on sales tax, which also includes a tax on gasoline, we see that since September 4, 1984, the tax on gasoline has been increased by 27 cents a gallon. That is a tax that is going to hit average Canadians the hardest because they are the ones who depend very heavily on their automobiles. It seems that when the Government decides to increase taxes, it looks to the ordinary Canadian.
Another example of this is the recent statement by the Government that it is going to put a 10 per cent tax on long distance telephone calls. Who are the ones making the long distance calls? Of course, corporations call long distance quite a bit, but who uses long distance calls the most? I think one could say with a certain amount of justification that the persons who telephone long distance the most are persons living in smaller communities.
In large centres such as Toronto, Montreal and Vancouver a certain amount of growth is taking place in the economy and young sons and daughters are able to stay in the area in which they were brought up. There is not the separation of families and there is a closer proximity of friends and relatives. However, in areas such as my area of Cape Breton Island, where the economy has been bad and young people have had to move away to other parts of the country, and where the actual size of the population is small compared to other regions of this country, the need for long distance telephone calls is greater. By adding a 10 per cent tax, we are going to make it much more difficult for these people to keep in touch with friends and relatives. We see that the tax the Government is
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imposing once again goes to hurt the middle-income earners of Canada.
Let us look at what the Government has brought down in its Budget. Other than an increase in sales tax and excise tax and a few other things, it really was not a Budget. It was a selfcongratulatory document which the Minister of Finance used to pat himself on the back and to congratulate the Government for absolutely no reason whatsoever. It was to show how the Government was doing so well for the economy.
Let us compare what the Government has done in relation to what it said it was going to do. Not only has it hurt the average Canadian with its tax increases but, generally speaking, it has raised taxes since it has been in power by $22 billion. It boasts that it was able to reduce the deficit. But the deficit reduction was very small when one takes into consideration the added taxation the Government has imposed upon the Canadian public.
What the Government has done, more than anything else, is widen the disparity between regions that are economically selfsufficient, with growing economies, and those which are already suffering from regional disparity. These regions are concerned about their economic future and the division is growing. This is unfortunate because I think we can say that generally the last few years have been good for the Canadian economy as a whole. But when we see this disparity growing in times of increased economic performance, we have to ask ourselves what is going to happen when the situation reverses? Certainly, if the situation reverses, the more economically prosperous areas are going to go backwards. But one also has to assume that the regions which are having some economic difficulty will also go backwards. In many cases, however, there is no room to go backwards. They are doing poorly now and if they go back any farther it would create a very chaotic and desperate situation.
At a time when the economy is doing well over-all, the Government has to look at the areas of this country which are suffering from very severe economic difficulties. What is the Government doing? It is doing very little. It is actually reducing its spending on regional development. It is presenting a smoke and mirrors package, saying "Look. We have created the Atlantic Canada Opportunities Agency. We created a similar agency in western Canada and one on northern Ontario, and these agencies will be the answer". What the Government is really saying is that these areas will be the recipients of certain amounts of money, money which has been taken from other programs such as the IRDP, which expires at the end of June. The money will simply be funnelled into these particular regional programs.
The Government says that these programs will be used for those particular areas, but they are not really going to do the job. It is a political move to hopefully appease these regions of the country. The Government is going to set up a new department, a department of industry, science and technology. This is where the real money is going. It will go to the areas which are already experiencing good economic conditions. We are

February 29, 1988
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going to foster the growing economies of these particular regions but we are going to stay away from the areas where the Government feels it is just going to be too difficult to develop their economies. That is a way of thinking that is completely contrary to regional development. It is completely contrary to the experience in this country over the last few years, and the belief that all areas are entitled to economic prosperity. It is certainly contrary to what the Government told us it was going to do during the last federal election campaign.
Not only is the Government not putting money into regional development funds, per se, it is whittling away at the funds of other Departments, funds which would be helpful to regions which have these economic difficulties, small craft harbours, to use one example, which would help the wharfes and infrastructure that fishermen need, the funds are practically nonexistent.
The Minister of Fisheries and Oceans (Mr. Siddon) recently stated he was going to give out four new off-shore lobster licences. One company was going to get two licences and two other major companies were going to get a licence each. These licences were absolutely unnecessary and contrary to most of the advice the Minister received from people in the fishing industry. It was completely opposed by fishermen from all over Nova Scotia. In fact, the Maritime Fishermen's Union is not only asking for the resignation of the Minister of Fisheries and Oceans, but demanding his resignation, and demanding it over and over again, despite the fact that the Minister has gone to Nova Scotia to try to explain his position. The Government has been trying to soothe the fishermen but they know different. They know it is a blatant political giveaway.
Giving out these licences will eventually harm the inshore lobster fishermen. This is tragic because they are undergoing a time of reasonably good economic conditions. Because of the Government's action in trying to make political cake of the fishing industry, the returns for lobster fishermen will decline, and it is not only happening to the inshore lobster fishermen, it is happening to the inshore fishery as a whole. Quotas are not growing because the stocks are declining. The stocks are declining because of the large vessels offshore.
The people who are being hurt are the inshore fishermen, the numerous inshore fishermen who depend on fisheries for their livelihood. More of the fish are being caught by fewer people and the major companies will continue to harvest the large percentage of fish in Atlantic Canada. What has been in recent years a fairly successful fishing industry is being smothered because of the policies of the Government. Its future is in fact in doubt. I hope the Government will take this into consideration and do something about it.
In my region in industrial Cape Breton the Government has been very unsuccessful. We had a good tax credit program, which meant that some industries decided to locate in industrial Cape Breton. Unfortunately, we have lost more jobs than we have been able to attract. Two heavy water plants have closed. There has been a reduction in jobs at the Sydney Steel
Corporation and at the Cape Breton Development Corporation. Many industries have had to lay off workers or close completely. Most of the jobs that we have received have mostly been in the fast food companies and in major retail outlets. They are not permanent jobs, but merely part-time jobs without benefits.
When the Government took office it stated that unemployment would drop in Atlantic Canada, but it has not. The latest figures from Statistics Canada show that the unemployment rate nationally is 8.1 per cent, provincially in Nova Scotia it is 12.1, and in industrial Cape Breton it is 21.1. That rate was provided by Statistics Canada. With the new procedure of Employment and Immigration, the unemployed no longer go to a counsellor to get advice. They have to go to the job board to see if a job has been posted. If it has, they go to the prospective employer. The counsellors at CEIC no longer meet the unemployed. The only way to know who the unemployed are is through those who receive unemployment insurance cheques or by polling. Certainly, those who are receiving unemployment insurance cheques are not the only ones who are unemployed.
In the areas that have regional economic difficulties, more and more persons have their unemployment insurance expire because they have been unemployed for so long. They are no longer on the records. Many of those people are not bothering to go into the unemployment insurance office because there are no jobs available. What are we doing? We are creating a hopelessness with those people. At a time when we keep saying that we are trying to do so much for Canadians, the Government is actually reducing the hope of so many Canadians.
Not only do they not have jobs, but they are being hurt in other areas. We are cutting back their prospects of getting employment. At the same time programs like RHOP, the Registered Home Ownership Program, have been cut back. Subsidized housing has been reduced. The RRAP program has been cut back. That was a program that was particularly important to older areas in this country where there is high unemployment and economic difficulties. With the assistance given to someone who is unemployed or perhaps an older Canadian who did not have the income available to put into his or her home, they were able to fix up their home and thereby stay in it, which is really what they wanted to do. Without that funding the homes will not be maintained. What will the Government do then? These people will either be without accommodation, or the Government will have to provide government funded housing. That is not happening either. In the future there will be another problem with housing in this country.
The Government has cut back on transportation. The CN Railways are closing rail lines in areas of this country. Quite likely those areas are the areas that are having economic difficulties. There again, the loss of transportation, the loss of rail lines, will make it less likely that those areas will be able to attract industry.
February 29, 1988

The Government is not giving the assistance that it would like us to think it is giving. For example, in the Estimates the Government has reduced spending on the Cape Breton Development Corporation. The capital spending has been reduced in the Estimates by $70 million. That results in the reduction of capital expenditures in the Cape Breton Development Corporation. The Government is saying to people in Cape Breton that it is not going to spend on new capital projects. It is going to maintain, and that is as far as it is going.
As 1 mentioned, last week when the Minister of Regional Industrial Expansion (Mr. de Cotret) was present, it was unfortunate that the coke ovens at the Sydney Steel plant closed in the first days of the strike, which is still continuing and is of great concern to the people of the area. The workers at the coke ovens were then without work, which was months before they had anticipated that the coke ovens would close. They were also without proper pension benefits. Initially those workers worked with the S and L Railway and had worked with the international piers at Devco. When Devco took over the coke ovens, they came to work at the coke ovens. When the coke ovens went back to Sydney Steel Corporation they were not given pension credits for the period of time that they worked with Devco. Therefore, men who have actually worked at the coke ovens for 30 or 40 years are now only receiving pension credit for 15 years.
When those things are added together, not only do they create a devastating lack of concern for the people of an area, but indicate that the Government is not thinking of regional development, as it would like to have us think it is.


Nelson Andrew Riis: I appreciate the comments of my hon. colleague. He is obviously concerned about the problems in the regions of Canada and the lack of what appears to be serious initiative by the Government to offset some of the problems experienced by some of the regional economies. There is a way in which that can be done. When one thinks of the regions of Canada and of the mining industry, it is apparent that the mining industry is present in the East Coast through to the West Coast. It is present throughout the entire north of Ontario and in the northern part of Quebec. Literally everywhere outside urban areas mining exploration is taking place and mines are being developed.
Critical to that industry is the whole matter of flow-through shares. This program was introduced some years ago. It enabled equity capital to be obtained to allow companies to explore the upstream exploration that is required to develop a new mine.
My hon. colleague will also know that, almost without exception, the companies that do the exploration are Canadian-owned companies. They are small and medium-sized, aggressive, entrepreneurial, and 100 per cent Canadian-owned. They are the type of companies that we want to encourage and to which we want to show that we appreciate what they do in terms of regional economic expansion.
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I wonder if my hon. friend shares some of those views and what he thinks about the most recent initiative of the Minister of Finance (Mr. Wilson) that has essentially gutted that flowthrough share program. Does the Hon. Member believe, if the Government is going to reduce the effectiveness of that program, whether it should or should not introduce other programs to encourage and nurture the exploration industry?


Russell Gregoire MacLellan: I would like to thank the Hon. Member for Kamloops-Shuswap (Mr. Riis) for raising that point. It is a very good point indeed. I would like to add to what he has said. The mining industry is probably one of our greatest sources of combating regional disparity. In this country we have many one-industry towns. If our mining industry was to falter, the source of employment for a whole town could disappear. The flow-through shares have been a great source of funding and financial support for those companies.
The Government has stated that the mining companies are making money. The mining companies are doing well. The mining companies are surviving, that is what they are doing. They are not making tremendous amounts of money. They are keeping communities active and they are providing a tremendous number of jobs.
Contrary to many sectors of Canadian business, they are putting a great deal of money into research and development. That is the reason that Canadian mining companies are able to compete. With the salaries that Canadians miners are paid compared to the salaries that are paid in some other countries, the Canadian mining companies are at a very serious disadvantage.
The flow-through shares are not only a luxury, but 1 agree with my hon. friend from Kamloops-Shuswap, they are an absolute necessity for the health of the mining industry in this country.


Frederick James (Jim) Hawkes: Madam Speaker, it is interesting to see the turn that conversations take toward regional disparity. It is also interesting to note how seldom either opposition Party, and certainly this speaker, stands in the House to say to Canadians that in nine out of ten Canadian provinces the unemployment is lower today than it was in September, 1984 when the new Government took over with a new sense of direction.
It seems to me that the two Parties combined, going back to 1972, decided to plunge the country into debt. Their answer to regional disparity was to give everyone in the country a huge debt load.
I am standing here today saying that it might be possible to spend wisely $2 billion or S3 billion on some good purpose. Flowever, we are here discussing a borrowing Bill. We are borrowing money. We are putting debt on the backs of the people in this building and elsewhere in the country. That is what we are doing here today.

February 29, 1988
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Why are we doing it? It is because historically, going back to 1972, 1973, and 1974, we moved from surplus to deficit by raising expenditures and not raising revenue.
The Budget before us gives the detailed knowledge of our borrowing requirements. We would have a surplus; we are bringing in more money on the revenue side than we are spending in programs, but we have to pay the interest on the public debt. A lot more money goes into interest on the public debt than is available for regional sharing or regional development.
I wonder whether the Hon. Member opposite who just spoke would acknowledge that the employment situation is better in his region than it was on the day his Party lost office and the new Party came into power. If that is true, then what is it that we have been doing that is working right? Perhaps he could just mention that.
Let me come specifically to his responsibility as energy critic. He was part of a Government-and I watched him- which devastated my region, causing suicides, murders, crimes, child beatings-the whole bit-because of the National Energy Program. It threw people out of work. We moved from 4 per cent unemployment to over 12 per cent. He supported that policy. At the same time employment creation funds or regional disparity funds were not given to Alberta, not to the unemployed people in Alberta. They were taken down to his province, to Allan MacEachen's riding, some $586 per unemployed person, whereas it was some $12 per unemployed person in my riding. That view of regional disparity is real and tangible. If one happened to be an unemployed person in Calgary or elsewhere in Alberta, one did not feel very good about it, especially when the Government did that which caused massive unemployment.
I wonder, talking about regional disparity, what would be his solution to the reality that a Crown corporation called Petro-Canada has a large land position. It is possible to develop a resource faster than it is being developed. What would he do? Would he borrow more money to give to the Crown corporation, or does he advocate allowing Canadians as individuals to participate in the provision of money to develop the resource, the jobs, and the economy? Which side of the picket fence does he come down on? Does he want us to borrow more? Does he want us not to do the activity, or is he prepared to acknowledge that it might be a good idea to go with the private sector and allow individual Canadians to participate in the development of their own resource?


Russell Gregoire MacLellan: Madam Speaker, the Hon. Member for Calgary West (Mr. Hawkes) has an awful nerve to raise the relationship of my constituency now as opposed to what it was when the Government took over. When the Government took over, the unemployment rate in Cape Breton-The Sydneys was 16 per cent. Today it is 21.1 per cent.
The Government has stated that it wants to help economically deprived areas. Let me tell the House what the Government did after the September 24, 1984 federal election. There was a decentralized office for income security already being
built and planned for Sydney. People were being trained. The Government stopped the project and cancelled training. Some of the people had already left other jobs. Of course many of them did not have jobs with that kind of unemployment rate. It cancelled the training.
That income security office was one of four decentralization projects. The other three were in Chatham, Peterborough, and Timmins. The other three went ahead because they elected Tory MPs. The one in Cape Breton-The Sydneys did not.
Do you know, Madam Speaker, what those people who did not have jobs had to do? The only alternative was for some of them to go to Timmins, Peterborough or Chatham to work in the income security offices which went ahead. That was one project.
There was a second project where a new federal building was being built. The architect had already drawn the plans. The land had been bought. The tenders had been called and were all in, ready to be opened. The Government cancelled the whole project. They lost $2.1 million on wasted moneys in the income security office and over $3 million in the cancelled federal building.
The third project was fixing up the main street and harbour development in Sydney. The cost of it was supposed to be shared between the federal and provincial Governments. This Government bailed out at the last minute. There was also a plan for a new wash-house at the Prince mine which the Government cancelled. The Government told the people of Cape Breton that if it closed the heavy water plants, it would ensure that alternative employment was in place. The Minister for International Trade (Miss Carney) said that, and within a few months the heavy water plants were closed without any regard for alternative employment, and the Government has the unmitigated nerve to talk about sympathy and concern for regions with economic difficulties. It does not know what is concern or sympathy.


Abram Ernest Epp: Madam Speaker,
I appreciate the opportunity to join in the debate on Bill C-109 to extend borrowing authority to the Government.
Last week I had the opportunity to speak in the budget debate, and I should like to build on the observations I made on Tuesday last in exploring the authority which the Government seeks today and in considering what would be better principles of financing the Government of Canada and providing for the prosperity of Canadians in the Budget.
I put it in that context because I looked at the comments offered by the Parliamentary Secretary to the Minister of Finance (Mr. Vincent) on February 12 when he brought in the Bill for second reading. He said something about the borrowing authority passed last year for the current year as part of his explanation of the authority the Government is seeking this year. As I looked at the figures, I found myself really quite struck by evidence of how the Government failed and how the plans of the Minister of Finance (Mr. Wilson) for deficit reduction, for sound budgeting as he sees it, have really stalled.
February 29, 1988

A year ago the Government proposed in the way of borrowing authority some $25,8 billion, which happened to be half a billion dollars more than in the current year. However, when one goes into the particulars, one discovers that the basic authority allows for some authority just in case it is necessary to increase our reserves for foreign exchange purposes, if there is a run on the Canadian dollar, I suppose, and it is necessary to defend against that. Laying aside a couple of unusual items last year and this particular one this year, what we find is that the basic authority the Government sought last year was for $21.3 billion. The basic authority being sought this year is for $22.3 billion, $1 billion more than last year. In a world in which a certain amount of inflation prevails and numbers each year tend to be bigger than the previous year, $1 billion is not all that exceptional. It may be roughly in line with the rate of inflation, as a matter of fact.
Let us consider the determination that the Government has had to reduce the deficit in successive years. The Minister of Finance (Mr. Wilson) did a great amount of bragging about his success in reducing non-statutory expenditures. He hopes to do still more in 1989-90. When one looks at the end results of all this activity, what do we find? We find that the deficit remains very close to $30 billion year by year. As a result the Government is looking at having increased the national deficit over three and a half years by $100 billion or more. That is an odd kind of success for the Minister of Finance and his colleagues to face up to. It will be difficult to defend this on their own assumptions.
What 1 am talking about here is the situation as it looks for them on the assumptions that they have that the national debt is the most dreadful thing in the world and that the most significant figure in the Budget is the amount that it is in deficit. The Government seems to say that no matter what the cost, it must continue on this trend, barring of course doing dreadful things in the last months before an election and encouraging voters to turf the Conservatives out, adding to the cup of iniquity that the Government has already filled up. Aside from that I suppose even Ministers of Finance stop short of those things, as the Budget Speech in its own way reflected at certain points. The fact remains that the Government has failed on its own assumptions.
I am saying this this afternoon in order to open up the possibility of considering a very different approach. If we want to get the Budget into balance and if we want to stop the national debt from growing the way it has been growing, then we will clearly not succeed by means of restraint in expenditure and massive increases in taxation. We have already had massive increases to the tune of $1,000 and more per average family in additional taxes over the last three years.
Yet what is the result of the Budget? It is another $30 billion deficit. What we have is not any great demonstration of virtue on the part of the Government in contrast with previous
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Liberal Governments but instead a basic determination to lower taxes on individuals and to let wealthy corporations get off scot-free. Of course that adds to the deficit. The Government brazens that out even while it is following a principle here that is against its own determination.
Far more significant than that are practices which go back to the early 1970s. The Liberals began them and this Government has continued them with little significant change. Certainly, there has been trimming in certain areas in which there were abuses, such as with respect to the scientific research tax credit. It became obvious that that measure was being used as a massive boondoggle by some. The Minister of Finance put an end to it. But aside from a certain amount of trimming of that sort it is clear in the figures of taxation and that imbalance between corporations and individuals that the Government has only made worse the kinds of unfairness that characterized taxation under its Liberal predecessors.
The significant point I want to pursue is not so much that of tax unfairness but the fact that back to the middle 1970s under successive Trudeau Governments there was a limited recognition of national need. There was a failure to recognize the role of the Canadian Government in ensuring that various Canadian needs were met. When elections drew near it was possible to practise what I am saying now, something which should always be kept in mind for the Government of Canada. When the 1984 election drew near there were special recovery capital projects carried out. Contracts were let for vessels for the Coast Guard. For example, a variety of such contracts were let which anticipated the Government's naval building program that is now getting some of the shipyards to work. Certainly the Government began to do that. But we have had a good decade or more of failure through the 1970s to keep the navy up through thick and thin, through good times and bad times, in the way that it should be done in order to ensure that the coastal defences of the country and our Maritime Command are of the quality, that is expected of them. I mention that as one specific example.
There are so many other areas to which one could look, areas with respect to which the Government of Canada should be sensitive. The Government should be quite prepared to borrow for those as an investment in the country. I say that not to add to the deficit of the country but to make an investment in the country.
This suggestion should be followed as an alternative to what we have had, not that it has not been done as an expedient, and I have already suggested that. Instead, it should be a deliberate principle characterizing Government throughout. When there is a wise investment to be made in the country then let us make that investment. Let us be prepared to borrow in order to ensure that that investment is made. Let us recognize that doing that is the way in which we will achieve prosperity. That is what happened in the late 1940s through the 1950s.

February 29, 1988
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When there was building to be done in the country such as large projects in various regions, we got ourselves closer to national prosperity than we have ever had since, certainly since the 1960s. There was a recognition by Governments in those days that they had a responsibility. It was not that private enterprise was wrong or bad or anything of the sort. It was quite to the contrary, especially as expressed by the St. Laurent Government of those days. There was a recognition of the importance of resource companies and their role in the Canadian economy. That is obvious from the history of the period. There was a recognition out of the experience of the Great Depression and the war years that although corporations could do a great deal, and the market pointed to certain kinds of investments, there were measures that the Government of Canada needed to take and that it ought to get on with taking them. There was certainly a recognition in the 1940s that to do that would provide full employment for Canada. It was recognized that it would bring the country prosperity in a way that it had not known since the 1920s, or as it had known during the war years when the Government led in ensuring that production was built up in order to meet war needs.
A few moments ago the Parliamentary Secretary was talking about regional unemployment rates in the various provinces. It is worth recognizing the importance of a program of this sort. Of course unemployment rates are lower in many provinces than they were in 1984. By God, what else could we expect? In 1984 we were just coming out of the interest rate depression of the early 1980s. One would expect that, with reasonable interest rates and with construction picking up, of course the unemployment rates would be lower than they were in 1984. The fact of the matter is that in eight of the ten provinces there is nothing to brag about even now. It is great effrontery for Members of the Government to mention this, something which was well-skewered a few moments ago when our colleague from Cape Breton pointed out the experience of people in his own constituency as far as unemployment is concerned.
With respect to unemployment and the lack of prosperity, there has to be the recognition that the Government could do a great deal to ensure that prosperity returns to these regions and we could get closer to a full employment level. When we get closer to full employment we want to be assured that the tax system is such that the Budget is balanced. When the Budget is balanced we might even have the resources at some point to reduce the national debt rather than being obsessed as this Government has been with deficit reduction first and foremost.
What are examples of projects that should be carried out to meet national needs? I expect that other Members may have caught some parts of Cross Country Check-Up yesterday afternoon with the President of VIA Rail in the studio. Canadians from across the country phoned in to express in most cases their love of rail travel and their desire to have rail transportation improved. There was discussion about fast rail lines far beyond the capability of VIA Rail now with its
outmoded rolling stock and with the poor rail lines, relatively speaking, for these purposes. It is a quality of rolling stock that my friend from Regina West focused on very nicely in his own observations when he called in to the show.
I was struck by the suggestion of what could be done with trains that run at 180 or more kilometres per hour. These are speeds which have been attained in France and will be attained soon in other parts of Europe, speeds which have been exceeded by trains in Japan. It is obvious that it would be attractive to many to achieve that kind of rail travel in Canada. Many people would prefer rail travel to road travel or even to air travel.
It is obvious that to achieve that kind of rail transportation system would be a pretty expensive proposition. Here, of course, is an area in which the Government of Canada might choose to invest. The suggestion that really caught my ear was the suggestion of a rail line between Quebec City, Montreal, Toronto and Windsor. Such a line would be a good idea not only in terms of travel needs but also in terms of profitability.
The President of VIA Rail has suggested that such a line would pay for itself. There might be a need for a grant at the beginning, I suppose, to get it going, but if such a line were to be a viable commercial enterprise, I find myself asking how fast we could get the studies done to confirm that and how fast we could turn sod to build this line. If it could be a paying commercial operation, let us get on with the job already, recognizing that such a line built from Windsor all the way to Quebec City would provide employment all along the line, through areas in which such jobs are very badly needed.
A rapid rail line in the central Canadian corridor is an example of something the Government could undertake. It is a good idea which could conceivably be financed quite separately from the borrowings of the federal Government. It would play the role of using the borrowing authority of the Canadian Government and/or VIA Rail together to achieve good things for the Canadian people.
I have another area of concern, also in transportation, as it happens. It might well take up to $3 billion, or at least that is the estimate the Ontario Government has put forward, but there is a need for improvement of the Trans-Canada Highway through northern Ontario. This is another project of regional significance and of national significance. In my constituency of Thunder Bay-Nipigon, there is a section of highway exceeding 100 kilometres in length which is the road link between East and West in Canada. There is a bridge at the east end of that road across the Nipigon River which, if it were ever to go out, would cut off all transportations across Canada. People would have to travel around the south side of the Great Lakes. Of course, there are sections of the road which have been closed for short periods of time, cutting off transportation, even in the brief time I have been a Member of Parliament.

February 29, 1988

The improvement of the Trans-Canada Elighway through northern Ontario is the most important demand the people of northern Ontario are making. It has been a long-standing desire to have a really first-rate highway there. In the past year, with information that I have made available indicating the support the Government has given to highway construction in Atlantic Canada, in Quebec and more recently on the Yellowhead Highway across the four western provinces, the people of northern Ontario have learned that the Government is supporting highway construction in every province but Ontario.
This seems fine to the Minister of Transport (Mr. Crosbie) who is from Newfoundland and shares his constituents' sense of Toronto the golden, a place of prosperity, and thinks that Ontario can take care of itself. Southern Ontario does so in a way that arouses our envy just as much as the envy of citizens of Newfoundland.
We in northern Ontario have one-quarter of the national length of the Trans-Canada Highway. We have in some sections the sole road link between East and West. The Trans-Canada Highway and Highway 11, the northern route from Nipigon eastward, is the vital route for Canadian road transport.
It is our expectation that highway transport will become more and more important in the era of deregulation. We realize that this road is of enormous importance. Trucking traffic will increase on a highway that is 25 years old, a highway which the provincial Department of Transport recognizes as being obsolete in design and width. The highway is barely adequate for highway transport needs and is completely lacking in the tourism needs of northern Ontario, needs which become the tourism possibilities of Canada.
As long as the highway remains the way it is, Canadians as well as Americans will cut across the line and travel the route, which in part is Highway 2 in the northern United States. I suggest that the talk about tourism in northern Ontario will be only rhetoric as long as the highway remains the way it is.
I am pleased to see that the Hon. Member for Sault Ste. Marie, the Solicitor General (Mr. Kelleher), is here in the House this afternoon listening and taking in some of these observations. He knows how important this route is and 1 trust that he will carry the message to his colleagues in Cabinet by saying: "Even if it is in the context of an election year, when we have to do things that do not make sense by our old standard of deficit reduction, let us get on with this, let us give promises to the Ontario Government, let us get an agreement signed and get building".


Frederick James (Jim) Hawkes: Madam Speaker, what a pleasure it was to hear those parting comments. Finally there has been a public admission of a commonly held attitude: go into an election and bribe the voters with borrowed dollars.
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The Hon. Member stood there as if there were no thought that existed in the world other than in an election year, borrow money, bribe the voters. That is not the view of this Party. It was not the view of this Party during the last election campaign and it will not be the view prior to the next election campaign. It is an antiquated set of ideas that is the source of the problems in this country today, the source of 1.5 million unemployed Canadians.
Remember the minority Parliament of 1973 to 1974? Federal government expenses were up 30 per cent a year under the present Leader of the Official Opposition (Mr. Turner). Expenses were up, there was no income, so the Government borrowed money.
Today we are debating a borrowing authority Bill. We have a Budget that has $3 billion of surplus revenue over program expenditures except for the interest on the public debt, the interest that came about as a consequence of the marriage between two political Parties in 1972. The attitude was to borrow money, borrow money, pay for it tomorrow, pay for it tomorrow. The money is not here to pay for it. It is not here to pay for programs. We have to borrow more to pay for programs.
The Hon. Member talked about regional disparity. He said that we are doing nothing for Atlantic Canada. Since September of 1984, jobs in Atlantic Canada have grown by an average of 2,000 per month, every month. Month after month, there are more people with permanent jobs. Under the previous Government, the unemployment rate went up by 50 per cent. It has been coming down ever since the voters had the wisdom to change Governments.
The Hon. Member talks about tax credits and whether or not they are important. 1 have a question for him. We have to borrow money. We could borrow a little less if the NDP would not use taxpayers' dollars through the tax credit system to run election campaigns for their candidates in the Toronto aldermanic race. If they stopped doing that there would be more money in the federal till and less would have to be borrowed.
Recently the NDP put out a letter offering a free trip to Hawaii, Australia and New Zealand. With what? Taxpayers' subsidized dollars. Can the Hon. Member stand in the House and say that the NDP is prepared to make a contribution to reducing the deficit and stop using taxpayers' subsidized dollars to fund aldermanic candidates in Toronto and to provide free trips for lottery winners among those who receive NDP fund-raising letters?


Abram Ernest Epp: Madam Speaker, I thank the Parliamentary Secretary for his comments and questions. However, I really feel sad, on behalf of the people of Canada, that he missed the whole first half of the speech.

February 29, 1988
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He talked about trying to bribe voters. The Conservatives are going to find that is about the only thing left to them. They have tried everything else. I was not talking about bribing voters. He comes up with that from his own assumptions in that way.
When I talk about government Members who will see only good sense when the ballot box sits before them and they realize they are on their way to retirement, I was appealing to their sense of self-preservation. We have had three and a half years of letting ideology rule their lives and determine what they are going to do. It has been such a confining ideology that the Parliamentary Secretary is unable to recognize what I was talking about.
The Government has been pursuing deficit reduction and cutting back on borrowing. The Parliamentary Secretary again wept tears about the fact that it is the payment of interest on the national debt that creates the deficit. It is worth remembering that a good part of the borrowing is investment by Canadian wage earners. I notice the Government used about $15 billion of its borrowing authority up to the end of January. Of that money, almost two-thirds, if I remember the figures correctly, came from people who bought Canada savings bonds and who were happy to invest in the securities of the Canadian Government.
What I am talking about is not bribing the voters. That is the way those jokers see it. The voters will treat them with the kind of contempt that deserves. I am talking instead about needs existing in every region of Canada, construction needs of various sorts, needs that the Government should be doing something about so that we do not live in the kind of depression this country has experienced in attitudes. Liberals before them and now Conservatives have a depression mentality: hold back on spending, stint everywhere, with terrible end results.
Look at what has happened in education financing. The federal Government failed to be true to the principles that characterized university financing up to the middle 1970s. Provincial Governments, under more and more pressure, have been following through on that, so that when you contemplate what is happening now to people supporting public school education, you see that at one time 60 per cent of the cost of education was provided by the provincial Government. It has slipped down towards 40 per cent. The local ratepayers are burdened with these taxes. We have had that kind of mentality in area after area.
What I am talking about is recognizing that we are not in the interest rate depression of the early 1980s. The Conservatives should be honest enough to recognize that that is what produced the terrible results of the early 1980s, the last Trudeau Government, and provide the background against which there has been further improvement, not particularly to the Government's credit. What the Government has done in loading taxes on Canadians and reducing spending should have kept that depression going as we expected. The feature we did not work in was reasonable interest rates.
The Parliamentary Secretary made suggestions about election spending. My good friend from Windsor-Walkerville pointed out what the developers are doing in supporting aldermen in a completely shameless buying of votes in Toronto City Council. Incredible. Those are the allies of this Government. Those people on the city council have been passing one development after another, destroying the life of downtown Toronto, overburdening the transportation system and so on. If he really wanted to reduce the borrowing needs of this country a little bit he would persuade the Minister of Finance to reduce interest rates. If that were done by just one percentage point he could save $1.4 billion of those hard-earned tax dollars or additional borrowing that he is so concerned about. That of course is his great concern so why does he not do something about it?


Howard Douglas McCurdy: Madam Speaker, I heard just a portion of the very eloquent speech by my colleague from Thunder Bay- Nipigon. I heard him compare the situation in northern Ontario with that of southern Ontario. I wonder if he would care to reflect upon the tendency not only to, in a manner of speaking, completely ignore the circumstances of northern Ontario, but to include within the context of southern Ontario places such as Windsor where the unemployment rate now has reached 14 per cent. My home city is now tied with Trois-Rivieres as the place with the highest unemployment rate in the country. Nevertheless, the Government persists in describing southern Ontario as so prosperous as to be virtual parasites on the rest of the country.
What action should the Government take in recognition of that state of affairs, particularly when anyone who has looked at the record of the economy of this country over the last two decades would understand that if a high unemployment rate occurs in Windsor it reflects the trend to be anticipated in the automobile industry?


Abram Ernest Epp: Madam Speaker, I appreciate my colleague giving me the opportunity to draw some of those distinctions. It is very easy for us to think that everything between the Ontario border near Montreal and Windsor is in great shape. The sad reality is that it is not. We are looking at a small area around the Golden Horseshoe, Metropolitan Toronto, where there has been an incredible boom lately. As we move out from there to Windsor and Trois-Rivieres, not an insignificant linking of communities and towns in the corridor from Quebec City to Windsor, when those communities are experiencing these unemployment rates, it is clear that the market orientation of the Government and all of its talk about prosperity falls very flat. It clangs upon the ears of people who are sitting around looking for jobs.
I was talking about investment in Canada, investment in this transportation corridor for VIA Rail and other projects designed to get us to full employment. When we get there, let us be sure that we tax fairly and adequately in order to get the
February 29, 1988

Budget in balance in a way the Government knows nothing about. That is why we need a change of Government as soon as possible in order to get these things done.


Mr. Gilles Grondin (Saint-Maurice):: Madam Speaker, this afternoon 1 would like to comment on Bill C-109, and since the Bill is a prime example of the poor management the Conservative Government has inflicted on Canadians during the past four years, 1 would also like to say how appalled 1 am at the Government's failure to act in many respects. If passed, this Bill will authorize the Government to increase the national debt by $25.3 billion during the coming fiscal year, starting April 1.
As was pointed out by the Hon. Member for Laval-des-Rapides (Mr. Gameau) in his speech, this loan of $25.3 billion would carry interest charges totalling $2.5 billion for fiscal 1989-90. And that is not counting a very likely increase in interest rates, a possibility already mentioned by several economic experts. Twenty-five billion dollars may not seem like much-just a routine loan to add to a national debt that is already far too high. By the end of this fiscal year, our national debt will be nearly $300 billion. Three hundred billion dollars, which means a little more than $12,000 per Canadian. Every year, every man, woman and child in this country pays an average of over $1,000 in taxes, just to pay off the interest on the national debt. That is an enormous amount when we realize that many people, for various reasons, do not pay any income tax at all.
And the worst part is that although the economy is in very good shape, the Conservative Government keeps increasing the debt. Madam Speaker, 1 hate to think what would happen if this Government were in power during a recession or even during a period of economic stability!
About 10 years ago, around 1978-79, the deficit or debt was about $60 billion. In 1984-after a recession that had affected Canada's economy during 1981, 1982 and early 1983-the deficit was $199 billion when the Government changed hands. After four years under a Conservative Government, we now have a total national debt of $322 billion, and if 1 may quote the Hon. Member for Laval-des-Rapides, the Government and government Members like to say the deficit is largely the fault of the previous Government. On the other hand, if the previous Liberal Government had failed to take the necessary action when the recession hit Canada's economy and the international economy, 1 wonder where we would be today, because the measures taken by the Liberal Government helped to maintain welfare and unemployment insurance programs. It is not surprising that the deficit rose at the time, because the unemployment rate was high, but on the other hand, because of the unemployment insurance benefits and subsidies Canadians were receiving, companies could continue to buy and sell and maintain Canada's economy at a certain level during this difficult period.
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And today our criticism of this government is that although we are clearly in a period of economic growth throughout the world, including Canada, it has done absolutely nothing to reduce the deficit.
All it does is change its accounting practices-1 will get back to this later on-and I think that is the most serious criticism one can level at the Conservative Government. At a time when it could take advantage of a period of tremendous economic growth to reduce spending and substantially reduce the deficit, it has maintained the deficit or reduced it so little that our national debt continues to rise. If this Government were faced with an economic recession or even with a period of economic stability, I would hate to be here in the House to hear how much the Minister of Finance (Mr. Wilson) would have to increase the annual deficit to meet the Government's spending requirements.
Madam Speaker, after six years of economic growth the situation is now worse than it was during the economic recession in 1981, 1982 and early 1983. Again, as a citizen of this country 1 am very concerned that this Government failed to take advantage of the excellent state of the economy: $25.3 billion is far too much for a Government that has forfeited the trust of Canadian men and women by failing to keep its promises; $25.3 is incredible for a Minister of Finance who in his last Budget has shown he is totally inept as far as managing taxpayers' money is concerned; $25.3 billion is ridiculous, when we realize that with all its loans and tax revenues, and despite the excellent economic situation, the Conservative Government still has nothing to offer the poor, the needy and youth.
Although we in the Liberal Party do not wish to delay unduly the passage of this Bill, we must be aware of the circumstances surrounding this loan. In 1984, this Government promised Canadians it would not increase taxes, saying they were already too high. And today? My colleague from Laval-des-Rapides has described the situation in a number of speeches. This Government has repeatedly broken its promises by imposing a series of new taxes and increasing existing ones.
I will not enumerate them all, but if we add them all up, we end up with something like an increase of $22 billion-22 billion dollars more, six years of economic growth and the Minister wants to borrow another $25.3 billion from Canadians for the coming fiscal year. Madam Speaker, there is something here that does not add up.
In 1984, the same Government also promised Canadians that it would substantially reduce the deficit. In his Budget Speech, the Minister of Finance said the deficit had been reduced to $29.3 billion. This was not a particularly outstanding achievement, considering the excellent state of the world economy and the promises made by the Minister. Increasingly, people are realizing that this figure is the result of one of the Conservative Government's accounting tricks.
In fact, besides other excellent initiatives, the Minister of Finance also changed the accounting methods used by the Liberal Government at the time. We could assume these would

February 29, 1988
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be insignificant changes, insignificant meaning in this case, however, that we get a variation of more than $2 billion, compared with what the deficit would have been using the former accounting system. And this is a very conservative estimate, because the Bank of Montreal, no less, stated in a recent report that if we got rid of all this creative accounting, we would realize the national debt was nearly $4 billion more than the $29.3 billion quoted by the Minister of Finance. His performance clearly falls short of the objectives set by the Conservatives themselves. In the Budget brought down two years ago, the Minister of Finance expected the deficit to drop to $25.9 billion for the fiscal year that is about to end. Surely this would have been reason enough to make the Minister less complacent in his last Budget Speech, when the Minister had nothing to say but a lot to hide.
Alain Dubuc in La Presse gave a very apt summary of the situation on February 11, and I quote:
-the Minister's accounting practices are equalled only by the ethics of some of his colleagues.
A little further, we read:
To keep the deficit at about the same level, the Minister had to increase taxes again and resort to some financial tricks. There is the tax on gas that brings in $225 million, and there is also the fact that the tax reform will produce a revenue this year.
Even worse, in addition to failing to significantly reduce the deficit and in addition to putting a maximum tax burden on all Canadians, this Government has completely ignored young people, senior citizens, the homeless and the poor. It has also ignored regional disparity. It is so busy helping Canadians who are benefiting from the excellent state of our economy that it cannot be bothered to listen to the grievances of Canadians whom the economy is passing by.
As a Fiberal concerned about the well-being of all citizens, I cannot agree with proposals designed to benefit the privileged and prosperous, while the poorest and neediest in this country must suffer.
The Government continues to brag about its job creation statistics. Although the situation is improving, which is not surprising after six years of economic growth, Canada still has more than one million unemployed, and the Government does not seem to notice. Job creation programs are being cut back regularly. They tell us the economy is in such good shape that people should be able to find jobs without government assistance. That may be true in some regions, but it certainly is not true in all parts of Canada, and it certainly is not true for young people, whose unemployment rate continues to be twice the national average.
In spite of a situation that is particularly painful for our youth, the last Budget of the Minister of Finance, where the only spectacular measure was a one cent increase in the tax on gas, had nothing more to offer young Canadians than an ordinary economic statement.
Last night, during the closing ceremonies at the Olympic Games in Calgary, the President of the International Olympic Committee said at the end of his speech that the future depended on our youth. I could not agree more with these words, which were heard by millions of Canadians. I can only hope that the Conservative Government and the Minister of State for Youth (Mr. Charest) were also listening. I take this opportunity to congratulate the many athletes who took part in these games, particularly the Canadian athletes who are all youths on which Canada can depend to maintain our traditions. When it comes to finance, these young people were away ahead of the Minister of Finance of the Conservative Government.
Although I have precious little hope that these words may have impressed the Minister responsible for youth, notwithstanding his many lofty promises, I dare say he must have felt somewhat uncomfortable for failing to give more than lip service to our young Canadians.
Not so very long ago in a press conference he went as far as talking about a global youth strategy. I would not know whether the Minister fully appreciates the latest Budget, but as far as I can see it did not have much to say about this question, however important it may be. 1 would suggest that the Government simply does not grasp the full significance of the problems young people have to cope with.
1 agree with the Minister when he says there is no magic solution to youth problems, but that just cannot be a valid excuse to do nothing. Unfortunately very few problems in this country can be solved with a magic wand. But when we set our minds to it we realize that simple, constructive and intelligent measures can help improve considerably most existing problem situations, especially with respect to young people.
The Minister cannot even manage to maintain existing programs at a decent level, and I am referring specifically to Challenge '88. No wonder young Canadians have had it up to here. This announcement falls far short of what they can righfully expect and does not give us a single clue as to what the Conservative Government is doing to help them. There has been no improvement over the previous edition of the program, except perhaps in the case of school drop-outs, and to top it off the appropriations are even lower than they were four years ago.
In 1984, Mr. Speaker, the Liberal Government earmarked $200 million for its Youth Employment Program. In 1988, all this Tory Government has to offer is a meager $180 million and I will never agree with the Minister of State for Youth (Mr. Charest) when he says that this budgetary freeze is normal and acceptable in view of a lower level of unemployment among young people. Too many young people are without jobs for the Government to rest on its laurels. Dropouts are not just young people who are fed up with school. Several among them just cannot afford to attend a college or university.
February 29, 1988

In several regions of this country, the unemployment rate has reached unacceptable levels. This is true even in Quebec where youth unemployment rate reaches 13.7 per cent. Nothing could justify the Government's inaction.
The failure of the Tory Government over the past few years to take advantage of the economic stability makes one really concerned about what could happen in case of a recession or even economic stagnation in this country. Unfortunately, young people are always the first victims in similar circumstances.
Madam Speaker, I worry about what the future has in store for young Canadians under this free trade agreement with our American partners. As a strong believer in the entrepreneurship of our young people, I hope that the Government will set up the necessary mechanism for them to rank among the giants and the strong. I also wonder about their working conditions in such a competitive economy because Canadian corporations will have to make cuts somewhere if they want to hold their own. Clearly young Canadians are likely to be the first victims of these cuts.
The Government should consider now taking special measures to prepare young people for this new environment, failing which they would be quickly overwhelmed under a wave of Americanism.
Unfortunately, the Canadian Government is not moving in this direction, and no one, not even the Minister of State for Youth, is truly concerned about young people. The optimism shown by this Government often blinds it to the obvious.
In his Budget speech, the Minister of Finance patted himself on the back because of the unexpected performance of the economy. But a reference to his 1984 speech shows that he talked about reducing the expenditures without increasing taxes.
And here is what Alain Dubuc has to say about the recent Budget by the Minister of Finance: "His Budget has only thirteen and a half pages and twelve of them are in praise of the Conservative Government, which makes it look like a political leaflet meant for door to door delivery."
And among other considerations by Alain Dubuc, here is a quote on "opportunities foregone" by the Conservative Government: "It is all the more worrisome that the Conservative Government has come to power at an ideal time to put public finances in order. Canada has had five consecutive years of economic growth so there could hardly be a better time to reduce the deficit.
Why has it not been done? Surely not because the Minister of Finance is incompetent, but rather because he is part of a Government afraid of its own shadow."
The improvement in our economic situation is due in great part to the fact that for the last six years now, the entire world has been recovering from a very deep recession. The Conservative Government has benefited from the strong bases put in place by its predecessor, which had successfully handled a very
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difficult recession. Furthermore, both the Government and the economy are benefiting from an increase in consumption. In the past, Canadians saved more while now they consume more.
Nevertheless, the last Budget is off the mark in many respects. The deficit is handled in a dishonest way. No aid is provided to the neediest, Canadians are expected to bear a greater tax burden and, finally, forecasts concerning the Canadian economy are not realistic.
In fact, the forecasts made by the Finance Department are so optimistic that they must be taken with a grain of salt. There is enormous exaggeration.
The great majority of economists are much more cautious. Unfortunately, those who foot the bill in times of economic downturn are the neediest among Canadians. Our young people are also constantly vulnerable.
They are the first ones to suffer when the number of jobs decreases and when cuts are made in programs.
Madam Speaker, the Conservatives have shown clearly their government is not trustworthy. They made commitments they did not fulfil. Those commitments were important for Canada. We were promised taxes would not be raised, the deficit would be reduced. Three years and a half later, we realize Canadians are taxed to a very high degree and the deficit has not changed significantly. Still claims are made at every opportunity that everything is just fine. The documents about 18 inches thick that are distributed say nothing but give a boastful and inaccurate description of the Government's achievements. This budget is an electioneering document printed at taxpayers' expense that is certainly not very honest.
In spite of this situation. Madam Speaker, and I am concluding, we are asked to give the Government a borrowing power of $25.3 billion. If that money could be used to help the needy and young Canadians, I would go along with the request thinking the Government is willing to make up for what has been lost. But that is not the case. I do not want to delay too much the passing of the Bill, but I am against it, since it does not bring anything better for Canadian men and women and for young people and it is tangible proof of this Government's very bad management.
Madam Speaker, the people have every reason to worry and fear the terrible situation in which Conservatives have put Canada, in spite of all the economic advantages which could accrue to Canadians. Personally I am deeply disappointed. Madam Speaker.


Mr. Tardif (Richmond-Wolfe):: Madam Speaker, I would like, first of all, to congratulate my colleague for his very precise speech which, in my view, is very important as it brings to this House an element which unfortunately, up to now, had not been mentioned often enough, and that is the fact that our friends opposite are bragging about low inflation rates and low

February 29, 1988
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interest rates, and telling us that everything is going well. However, we forget to do some comparisons-


Gabriel Fontaine: It is true, everything is going well.


Alain Tardif: -with what we had before 1984, when, as my friend said so well, we were faced with an historic recession which forced all industrialized countries, out of human decency, to accept an increase in their deficit.
Today, the situation is quite different and the economy is thriving. We are going through a period which would allow, in my opinion, more generosity in fundamental and much needed programs, for our youth in particular. I know that my colleague deals brilliantly with youth affairs. 1 would like to ask him the following question: Since 1984, did this Government take any concrete program initiative, any new measure to help students and new graduates, in particular within a very important resource envelope, the Laprade Fund? It was announced a few months ago, after many years of delay, that the Laprade Fund was being authorized. We were told that some $80 million would be made available. Within this important resource envelope, are there different parts, does it allow for the participation of young people who would like to be associated with job creation?


Gilles Grondin: Madam Speaker, I would like to thank my colleague for asking a question on a matter or a problem as important as the Laprade Fund, concerning the possibility for young people to have a portion of that Fund eventually be put to use. Unfortunately, to this day, there has not been that many projects that were approved that will enable young people to use the opportunities the Laprade Fund should normally be providing. Unfortunately, this is more or less the result of the over all measures that were taken both by this Conservative Government and the Minister of State for Youth (Mr. Charest) who since 1984, as pointed out by my colleague, was wondering whether there were measures or programs that could be used by young graduates or even by school drop-outs who had difficulty finding a job.
Unfortunately, since 1984, and especially since I was elected here, on a number of occasions I asked the Minister of State for Youth (Mr. Charest), among other things, when there would be a real youth policy, a genuine policy dealing with opportunities and all the problems faced by young people in Canada. And we always had rather general answers, in which we were told: Well, there is no problem, the present economic situation is good, we are creating a lot of jobs, and the young people are being well served by the Conservative Government.
I also have a clear recollection of the Prime Minister, Mr. Mulroney himself stating in this House on a few occasions that the Katimavik Program for instance would be replaced. When the Katimavik Program was abolished, its value was recognized and the Prime Minister stated that indeed there would be a replacement program. I have been here for 16 months, and after a number of questions on that matter, we still have
no program to replace the Katimavik Program, at least in that sense, and when certain programs were created, those programs were so limited to certain areas or major cities in Canada that there seemed to be a total lack of awareness that there are many young people in various areas in Canada that would need support in order to be in a position to set up an efficient structure or organization or initiative.
Personally, I am very much disappointed by that stand or lack of policies the Minister of State for Youth has yet to put forward, and that lack of programs to replace not only the Katimavik Program but also the other programs that were put forward for certain regions of Canada only, which explains that regional disparities as was mentioned on a number of occasions are still there, and some young Canadians are penalized in comparison to other Canadians who live in major centres.


Alain Tardif: The Hon. Member had a lot to say about the Challenge 88 Program. I know from my personal experience with Challenge 85, Challenge 86 and Challenge 87 that non-profit organizations have been shamefully neglected under this program. By putting the emphasis on the private sector, which might not be in itself a bad thing, the program is unfortunately being unfair to smaller communities where the private sector has no presence, which means that students in these small communities have no chance to work in their own community.
My question to my colleague is this: Does he know whether or not this aspect of the Challenge 88 Program will be improved to provide full access to non-profit organizations?


Gilles Grondin: Madam Speaker, my colleague is quite right to raise this issue, especially as the Minister of State for Youth said at a briefing on Challenge 88 that last year's criteria would apply which means that there will obviously be the same type of discrimination against non-profit organizations. However, as Hon. Members will recall, Challenge 87 allowed non-profit organizations under the jurisdiction of the social affairs department to take part at the last minute and benefit from the program. When people heard the Minister of State for Youth say at the briefing that the same criteria would apply as for Challenge 87, they thought that organizations in the social affairs network, such as drop-in centres, would be eligible under Challenge 88. We have learned that negotiations are under way, but there are only three days left to apply under Challenge 88 and we still do not know whether drop-in centres and social affairs organizations will be eligible.
In my opinion, this is blatant discrimination. It creates a very serious problem and I do not think that a remedy can be found as long as the Minister has not made a decision, even though he could have begun negotiations with the Quebec Minister of Social Affairs a long time ago. Since he has not done so, it is now impossible for such organizations to take part in the Challenge 88 Program.
February 29, 1988


John Martin Oostrom: Madam Speaker, I would like to ask a question of the Elon. Member. Does he agree with me that Hon. Members in general should do a good amount of research before they actually rise in the House so that they are sure of their facts?
A couple of weeks ago when we were dealing with Bill C-84, the Hon. Member for Kamloops-Shuswap (Mr. Riis) and the Hon. Member for Kenora-Rainy River (Mr. Parry) raised a couple of items. They referred to the return of the St. Louis and indicated that many people were not allowed to come into Canada. Obviously their research was not very good. It was stated that 907 people were turned away from Canada. That boat never even came to Canada. Some 224 of those people went to France, 240 went to Belgium, 181 to Holland, and 288 to Britain. In the end, of those 907 people, 520 people survived. Those two Members had not really done their research on that particular subject, and it is very important that they do. As a matter of fact, it was the country of Cuba that actually reneged on the original statement-


Abram Ernest Epp: Madam Speaker, I rise on a point of order-


Derek Nigel Ernest Blackburn: On a point of order, Madam Speaker. Obviously the Hon. Member does not know what is under debate at this time.


The Acting Speaker (Mrs. Champagne):: I am sorry to interrupt the Hon. Member for Brant (Mr. Blackburn), but the Hon. Member for Thunder Bay-Nipigon (Mr. Epp) sought the floor first.


Abram Ernest Epp: Madam Speaker, I appreciate the opportunity to comment on what the Hon. Member for Willowdale (Mr. Oostrom) was saying. 1 trust that his constituents, many of whom have a real stake in good refugee legislation, are listening to the kind of balderdash that he often serves on this issue.
The point is not Bill C-84 or anything dealing with refugees this afternoon. It is the borrowing authority. In addition, it is hardly sporting and quite against the conventions of the House to be attacking colleagues who are not in the House.
The Hon. Member for Kamloops-Shuswap (Mr. Riis) will be here shortly to speak during Private Members' Hour. However, he is not here now, and surely it is not fair nor in the traditions of the House to comment on something he supposedly said when he is not here.


The Acting Speaker (Mrs. Champagne):: I thought the Hon. Member for Willowdale (Mr. Oostrom) was straying from the subject at hand, but I was under the impression that he was coming to the point. At the moment I will ask him, if he has a question, to conclude very quickly as the time for questions and comments has actually expired.


John Martin Oostrom: Madam Speaker, I was coming to the question. Does the Hon. Member agree that proper research
Borrowing Authority
should be done, particularly on the borrowing Bill and the deficit? The Hon. Member stated that the deficit was increasing, and actually the deficit has been decreasing by $10 billion annually since we came to power.


Derek Nigel Ernest Blackburn: What, by $10 billion a year? If that were so, we would have no deficit left.


John Martin Oostrom: It is very important that proper research be done, and I ask the Hon. Member whether he agrees with that.
[ Translation]


Gilles Grondin: Madam Speaker, I cannot agree with what the Hon. Member is saying because there seems to be a definite attempt on his part to read into the figures whatever meaning he wants, although we can readily see from data which have been studied by journalists who are economists or by institutions as renowned as the Bank of Montreal, that contrary to what the Hon. Member suggests, the deficit is increasing, the national debt is increasing as well as the servicing of the debt. So it is a matter of interpretation of figures, and I cannot agree with my colleague.


The Acting Speaker (Mrs. Champagne):: The time for questions and comments has expired. Resuming debate. The Hon. Member for Brant (Mr. Blackburn) has the floor.


Derek Nigel Ernest Blackburn: Madam Speaker, in the brief five minutes I have available to me I will confine my remarks in respect of the borrowing Bill to one specific item which, unfortunately, is not included in government planned expenditures for this year, that is, money specifically targeted to unemployed older workers.
The reason I want to zero in on that specific point and wonder why the Government has not targeted that group with specific retraining programs is that I represent a constituency which, at this time and indeed for the past several years, notwithstanding the over-all economic development of southwestern Ontario has experienced widespread and longterm unemployment among workers in their forties, fifties, and early sixties.
For example, reference is often made to the fact that the so-called Golden Horseshoe has an average unemployment rate of 3 per cent to 4 per cent. That is just simply not true. My constituency of Brant, which is only a few miles off the road from the so-called Golden Horseshoe, has a present unemployment rate in excess of 12 per cent. In fact, many local employment specialists or unemployment specialists in Brant would tell us that it is probably closer to 15 per cent. That is totally unacceptable at a time when that part of the country is supposedly going through a veritable economic renaissance. No doubt there are some communities in central Canada and in southern Ontario where their economies at the present time are burgeoning, although there are indicators, day after day, that generally speaking the economy is beginning to flatten out.

February 29, 1988
Financial Institutions
Why do we have so many unemployed middle-aged and older workers in Brant? One very obvious reason is that we have suffered from the closure of White Farm equipment, and I think possibly of the imminent closure of Massey Combines. As 1 stand here at this moment, nobody seems to know just what will happen today or tomorrow or this week with Massey Combines Limited. The company has indicated that it is about to go into receivership unless it can be relieved of its debt burden or at least the debt burden can be postponed. That will mean another 500 to 700 workers laid off permanently in a city of some 75,000 people.
In addition, we had the Wabco plant closure in Paris, Ontario. We had another plant closure at Etatech in Brantford. Another company in Brantford, Trailmobile, is also undergoing some very serious adjustment programs at this time as it attempts to expand into the American market.
If we look closely at the industries 1 have mentioned, two prominent ones, Massey Combines and White Farm, were industries which had been trying to compete in a free trade environment for the past 40 years. Over the last 20 years we have lost some 5,000 jobs in the agricultural implement industry, owing mainly to free trade. I hope the significance of that sinks in across the way-free trade.
On the other hand, the auto parts industries are tied in with the auto assembly industries. They are not subject to the vagaries of free trade but to managed trade. We have created 4,000 jobs in industries related to the Auto Pact. Consequently, 1 think there is a very serious lesson to be learned in that regard.
1 should like to know why the Government has been totally remiss in bringing forward what it promised to do two years ago, which was an older workers' adjustment program under the labour adjustment program that the Government terminated about a year ago.
I see that my time is up in that it is now five o'clock. I hope that 1 will be able to continue when this debate resumes at a later date. It being five o'clock, I understand that the period for debate is closed.


Frederick James (Jim) Hawkes: Madam Speaker, I rise on a point of order. This is the eighth straight debate on Budget and economic items. The Government side would be quite prepared not to see the clock for a few moments to allow the Hon. Member to conclude, if indeed we could have unanimous consent to move to a vote on the borrowing Bill, and tomorrow we could get on with a very important regional concern, the Western Diversification Fund.
If there is some predisposition on the other side, I simply say from the government side that, with unanimous consent, we would be quite prepared not to see the clock so that the Hon. Member could finish his speech, to have Private Members' Hour, and to have a vote at the conclusion thereof. That would be the suggestion.


Jean-Robert Gauthier: Madam Speaker, I think that the Parliamentary Secretary should at least be factual. This is not the eighth day of debate on the Budget. This is the second day of debate on Bill C-109, which is a borrowing authority Bill. There have been perhaps five or six hours of debate thus far. There are still three hours to go before we even reach the eight hours of debate, at which time speeches will go from 20 minutes in length to 10 minutes in length, as is set out in the Standing Orders.
I do not think that the Parliamentary Secretary is too clear with respect to what he is trying to do. The Government is borrowing several billions of dollars. It would be an advantage to Canadians to know what the Government is planning to do with this money. I know that members of the Government are not interested in speaking about or explaining their points of view. But today members of the Opposition are at least trying to understand and put a clear message across to Canadians with respect to what the Government is intending to do with this money.
I invite the Hon. Member to participate in the debate and to tell us exactly what the Government wants to do with this money instead of trying to cut off debate.


Nelson Andrew Riis: Madam Speaker, I appreciate being recognized. I think that what the Parliamentary Secretary is suggesting is that we complete the debate on the borrowing authority Bill today. Considering that we have only had two days of debate on this matter and that the Government is asking Parliament's permission to borrow some $25 billion, I think the taxpayers of Canada would like us to spend a little bit of time in attempting to determine how the Government plans to spend this money, particularly when it has not accounted for all of it in the Estimates. There are still some $2.5 billion to account for.


The Acting Speaker (Mrs. Champagne):: The Parliamentary Secretary should realize that the Chair does not have unanimous consent.
[ Translation]
It being five o'clock the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.


PRI VATE MEMBER'S BUSINESS-MOTIONS   FINANCIAL INSTITUTIONS ADVISABILITY OF INFORMING DEPOSITORS WHEN DEPOSITS ARE UNINSURED
Nelson Andrew Riis: February 29, 1988

That, in the opinion of this House, the government should consider the advisability of co-operating with the provinces in establishing a system whereby those individuals who deposit money in financial institutions not covered by deposit insurance be required to sign a waiver form indicating that they are fully aware that their deposits are not insured in the event that the institution goes bankrupt.
He said: Madam Speaker, this particular motion was motivated by recent events which occurred over the last few years. We all remember that between the years 1923, which was when the Home Bank failed, and the early 1980s, we Canadians have felt generally secure about the stability of our financial institutions, particularly our banking institutions. However, the recession of 1982 to 1984 created havoc in the financial industry. Canadians are now too familiar with the spectre of failed banks and other failed financial institutions.
Over the years our banks have become cathedrals of capitalism, symbols of stability in our society. Anyone who has entered the large head office of a bank knows that rather intimidating feeling one gets when one walks into those hallowed halls. Unfortunately, that has changed somewhat in the last number of years.
We recall the collapse of the Canadian Commercial Bank followed by the collapse of the Northland Bank. Then, Pioneer Trust of Western Canada collapsed. The British Columbia Teachers' Investment & Housing Co-op collapsed. The Bank of British Columbia got into financial difficulties and was required to be bailed out. The Morguard Bank narrowly avoided collapse and was purchased by Security Pacific Bank. Mercantile Bank collapsed and was quickly merged into the National Bank. Continental Bank was carried off by Lloyds Bank. Recently, the very terrible situation surrounding the Principal Group and its related companies and their collapse motivated me to submit Motion No. 143 in an effort to protect depositors.
It particularly hit home in western Canada where the brunt of the Principal Group collapse was felt most heavily. I suspect that I can speak for many Members of Parliament in this respect. I have before me a long list of individuals from my constituency who lost considerable amounts of money. In many cases they lost their entire life savings, or a major portion of their life savings. For example, a retired custodian lost $57,000. A retired executive lost $113,000, while a millwright lost $50,000. A retired miner lost $41,000; a retired logger, $49,000; a retired pipefitter, $38,000; a realtor, $40,000; a retired farmer, $32,000; a miner, $34,000; a carpenter, $40,000; a rancher, $42,000; a mechanic, $21,000; a bus driver, $56,000; a retired member of the Armed Forces, $24,000; and a logger, $90,000. I could go on I suppose for an hour or two reading the names of those from my constituency who lost a portion if not all of their life savings. They had been saving this money to provide for their retirement years.
Obviously, something needed to be done. One of the problems that we must face as parliamentarians is the challenge of ensuring that the integrity of our financial system remains in place. In recent years we have all recognized and
Financial Institutions
have seen a shift to deregulation in an effort to encourage competition in the financial industries. With this has come a blurring of the traditional separation of functions of various types of financial institutions.
For example, investment dealers now offer chequing services. Banks now sell securities, and so on and so forth. This new deregulation has unfortunately permitted either naive and/or unscrupulous financial advisers to mislead Canadians about the degree of protection that their deposits and investments may have. During the deliberations of the Principal Group collapse and the inquiry into it we saw a whole host of examples in which individuals were misled, and perhaps not always intentionally. Even the people selling or arranging the deposits had received incorrect information, were poorly informed or uninformed about certain developments within the companies they were representing. Setting aside the reasons, thousands and thousands of people lost considerable sums of money as a result of these problems.
These people assumed that their deposits were protected. In some cases they were told that their deposits were protected under CDIC and, of course, they were not. As a result innocent depositors have been severely hurt.
Perhaps I should remind Hon. Members that our deposittaking institutions in Canada include banks, trusts and loan companies as well as credit unions. Deposit insurance is available to all of these. However, we must recognize that all the deposits with these different financial institutions are covered. There are other financial institutions that take in investments but are not covered by any insurance whatsoever.
I am very happy to be able to say that the Canada Deposit Insurance Corporation is in fact the principal provider of deposit insurance in Canada. It insures deposits in banks, federally-chartered trust and loan companies and provincially-chartered trust and loan companies other than those in the Province of Quebec. In these institutions the deposits are insured up to $60,000. But that is it. In the United States, under a very similar situation, depositors are guaranteed up to $100,000. Nevertheless, a single deposit by a man or woman in one of these institutions is insured by CDIC up to $60,000.
What this means is that all banks and certainly most trust and loan companies are CDIC insured. In Quebec the insurer is the Regie de /'assurance-depots du Quebec. However, I think it needs to be said that most deposits are insured in these institutions, but not all. There are a number of deposits that are not insured even in the ones covered by CDIC. For example, foreign currency accounts, the contents of safety deposit boxes, investment products with terms of more than five years, stocks, bonds, mutual funds and deposits in excess of $60,000 are not insured. I think it is important to recognize that because in some cases, there is the impression that anything deposited in a bank, as long as it does not amount to over $60,000, is in fact insured. As I say, such is not the case.

February 29, 1988
Financial Institutions
The credit unions are becoming major financial players in the financial world. Vancouver City Savings is now the second largest credit union in the entire world. Credit unions are a $62-biIlion industry with nearly nine million depositors.
Credit unions are provincially regulated and the extent of depositor protection varies from province to province. In Quebec, the organization insures deposits up to $60,000 and in other provinces, insurance is sometimes as high as 100 per cent of deposits.
Each province has a stabilization fund which assists credit unions that experience temporary difficulty. The B.C. Central Credit Union has a liquidity fund of $1 billion to assist credit unions that might get into difficulties. As well, the Canadian Co-operative Credit Society acts as the central bank for the credit unions and also has a stabilization fund of nearly $1.8 billion. It is fair to say that no credit union has ever declared insolvency except for a 1981 Quebec collapse which was provincially insured. In that case, the depositors were well protected.
Statistics Canada estimates that investment dealers hold about $3.5 billion in deposits, none of which is covered by CDIC. There is something called the National Contingency Fund, commonly referred to as the NCF, which exists to assist clients affected by broker insolvency. This was set up in 1969.
The NCF has about $16 million on hand and another $20 million line of credit. However, it must be recognized that one major bankruptcy such as Osier Inc. can leave the fund empty. The Canadian Co-operative Credit Society claims that it is owed $30 million from Osier. Thus, the entire capital base of the NCF would be in jeopardy. We see that some improvement is certainly needed when it comes to ensuring the safety and protection of those people making deposits with investment dealers.
Life insurance companies sell RRSPs, RRIFs and other similar investments that are not insured. At the moment, the industry is developing a consumer protection plan. However, not all the products offered by the life insurance companies would be covered, nor would they have government backing.
There are hundreds of companies across Canada that offer financial services and fund operations by issuing debt instruments that are totally uninsured. This is what happened in the Principal Group situation.
In this time of financial deregulation, in a world that is becoming more and more competitive and at a time when sales people are becoming more aggressive because of increased competition through deregulation, problems associated with naive or unscrupulous investment counsellors become increasingly important. It seems to me that this places a greater burden and a larger challenge on parliamentarians to find ways and means of protecting innocent and naive investors.
Since 1967, CDIC has required that member institutions not issue uninsured financial instruments unless they carry a
notice to that effect. Unfortunately, often this is not brought to the customer's attention and, in some instances, customers have said that they were misled and lied to by sales people about the nature of the insurance on the deposit or the investment.
There seem to be two problems. One is that some people are not aware that the institution in which they deposit their money is not insured. The other is that some individuals are unaware that the type of deposit or investment that they make determines whether or not it is insured. Those are the two critical questions we are attempting to address with this motion.
The motion would require those institutions to present the customer with a waiver form to sign indicating that the customer was made aware of the insurance situation with respect to his or her deposit or investment. This seems to me to be a sensible way of ensuring that customers are not misled by sales people who are anxious to earn more commissions and are perhaps prepared to be a little free with the truth when it comes to describing how risky a deposit or investment is.
The idea of having such a form that a depositor would be required to sign indicating that he or she is aware of the insurance aspect of the deposit or investment has the backing of the Consumers' Association of Canada. Last year, the Consumers' Association sent the Minister a letter detailing a similar proposal as a way of protecting innocent depositors.
I believe that we as parliamentarians would agree that it is time that fiascos like the one which occurred with the Principal Group not happen again. The situation that is unfolding daily as the inquiry takes place in Alberta is something we never want to see repeated again. The individuals involved, many of whom were pensioners, in some cases lost their entire life savings. The same thing happened with the British Columbia Teachers' Housing Co-op as well.
Whether or not some years hence, depositors will receive some of their money back, perhaps 50 cents on the dollar, tens of thousands of people who put their faith in a regulatory system and in the integrity of this institution were misled. We must take whatever steps are necessary to ensure that the credibility and stability of the financial community remain intact in the future. As well, we ought to take steps to ensure that innocent depositors who have faith in these institutions are not victims of some unscrupulous people in the business.
Obviously there is a need to ensure that consumers are aware if their hard-earned money is insured or not when placed in financial institutions. This motion seeks to address that problem in what I believe is a straightforward and easy to understand manner.
I might add in closing that this is simply one initiative. The intent of this initiative is not to suggest that this is the only way of dealing with the problem. There may be other ways of
February 29, 1988

dealing with it. There may even be other better ways of dealing with it. However, the motion provides a vehicle to generate discussion, not only here in the House of Commons but later in the finance committee. We should let the people on the finance committee who have expertise and a sincere interest in these matters explore various alternatives, this being only one of them.
It is unfortunate that this motion has been made necessary by recent developments in the financial community. As responsible parliamentarians, we must take whatever steps are necessary to ensure that the collapse of a financial institution does not occur in the future and, in a time and era of increased competition as a result of financial deregulation, that innocent and naive investors are protected as much as possible.


Mr. Claude Lanthier (LaSalle):: Madam Speaker, thank you for allowing me to take the floor on this important issue.

I was a member of the finance committee along with the Hon. Member for Kamloops-Shuswap (Mr. Riis) when we heard some sad horror stories about companies that did not advertise on their letterheads that they were not insured and also about some ambiguous letterheads which might have advertised the companies involved as being insured.
Questions about the financial system have been raised in the House many times in the last few years. We are well aware of some of the dimensions of the problem in general and of this problem in particular. This motion raises a number of questions.
I respect the concerns raised by the Hon. Member. The motion flows from a specific request from people who pay premiums to be protected and are competing for rates of returns with people who present themselves as being insured but are not paying premiums. However, this motion does give me some difficulties.

Allow me to examine it for a moment, Madam Speaker. First it focuses on the question of consumer protection, and in that respect we in the Progressive Conservative Party do not have any lesson to take from any of the Opposition Parties. We have absolutely no problem with that, consumer protection must be given priority. The real question is not to know what we want to do but indeed how we should proceed.
1 intend to show that the federal Government has done a lot in that field in recent years, particularly since the reform of financial institutions. However the problem with this motion is that it fails to take into full account the measures our Government has already taken.
Secondly, it raises the delicate matter of federal-provincial relations. Here again the principle does not bother us because since the advent of national reconciliation it has been amply demonstrated that it is always possible to be at one with the provinces. Federal-provincial co-operation and consultation have always been among the main concerns of our Government
Financial Institutions
since 1984, a fitting substitute for the atmosphere of generalized confrontation which prevailed in the darker years before we took office.
Still we cannot dismiss the possibility that problems may crop up if we encourage federal institutions to tread where provinces do have legitimate and overriding jurisdiction, even after these consultations.
Madam Speaker, as I have already said, it is important to realize the specific measures taken by our Government with a view to solving certain problems arising from our complex financial system. I think we have developed a good approach athough I am not against some improvements if they are deemed necessary, particularly in a very specific case such as this one where there have been some abuses because the field was wide open.
Let me review the provisions in our present system so that there be no misunderstanding as to the measures already passed, which are now in fact implemented.
You will recall that last June two separate pieces of legislation were passed and proclaimed. Bill C-42 and Bill C-46 were stages of the implementation of the financial reform package announced in December, 1986, by the Minister of State for Finance, which was itself the result of long consultation and a great deal of work. I should just remind you as well that the Minister of State for Finance released a further piece of draft legislation last December, which took us a long way further towards completion of reform of this vital sector of the economy.

Even before those reforms, Madam Speaker, only the members of the Canada Deposit Insurance Corporation could be considered as being insured by our Corporation. For some time now it has been required that uninsured instruments bear a mention to this effect, which is perfectly consistent with the proposal put forward.
Bill C-42 reinforced those provisions in three important areas, and I quote:
The first of those areas deals with the fact that the member institutions cannot state that they or the deposits they have are insured by the Canada Deposit Insurance Corporation. It is now well established that this ban applies both to institutions and to all the persons they represent.
The second important part of the provisions in Bill C-42 deals with a provision which was already in the regulations and which was added to the Act itself, namely the requirement that the institutions which accept deposits not insured by the Canada Deposit Insurance Corporation indicate it clearly and distinctly in writing in the deposit contract.
The third element is a new requirement which makes it an obligation for financial institutions seeking investment funds on behalf of their own security subsidiaries, or other institutions which are not members of the CDIC to expressly notify their depositors that these corporations or subsidiaries are not members of the CIDC and that the funds thus invested are not insured by the CDIC. This is quite clear and in every way consistent with the motion which is now before us.

February 29, 1988
Financial Institutions
1 have already mentioned that the Government will review as soon as possible the other legislation for the purpose of completing the reform of the financial sector. For instance, these proposals will increase the internal powers of the federal financial institutions and will make it possible for them to extend and diversify their financial services to their customers who, in this case, are consumers of financial goods who must be protected as a priority, as I mentioned earlier.
More specifically, these financial institutions will be authorized to make agreements with other networks therefore we believe that the Canadian public will have a greater access to financial services under more favourable conditions and with increased availability. On the other hand, the diversification of the services offered by financial institutions should make it possible for them to meet more easily the challenge resulting from increased competition abroad as well as from foreign institutions now operating in Canada.
Clearly, this new situation raises a number of questions concerning the paramount need to protect our Canadian consumers. For instance, deposit services might be only one of several products offered by a group of interrelated financial institutions which are not all members of the CIDC, some of them coming under the jurisdiction of provincial regulatory institutions. Hence the ambiguity of who is who and who covers what.
The Bill dealing with trust and loan companies takes these matters into account and authorizes the Governor in Council to establish regulations determining the conditions under which these financial institutions can operate in the areas now available to them. Similar provisions have been added to banking and insurance companies legislation.
While the situation will be more complex than before, we have already taken action to provide consumers with the protection which we find so important and essential in preparing any piece of legislation which deals with our increasingly complex financial services.
Bill C-56, the second Bill mentioned in the intervention of the Hon. Member for Kamloops-Shuswap (Mr. Riis), also dealt with certain aspects of this general problem. Some of its provisions will simplify the creation of annuity and compensation plans for contributors. The details have not yet been finalized, but these plans will fill the gaps which now exist as concerns quasi-deposit insurance. They will cover the annuities offered by insurance companies, in somewhat the same manner as the corporation now insures deposits.
Madam Speaker, you are indicating that my allotted time is coming to an end. I am certain that the provinces also recognize the need to co-ordinate and harmonize these operations. This is often one of the items on the agenda for meetings of Ministers responsible for financial institutions, and we should see it as our duty to promote this process further.
Nevertheless, Madam Speaker, we should not accept this motion as introduced. It does not take into account the many
initiatives which have already been taken. However, I hope that we can develop the federal-provincial co-operation to which the Hon. Member for Kamloops-Shuswap aspires and that our country can continue to enjoy a financial system which protects all parties concerned, and first of all the consumers.


Aideen Nicholson: Madam Speaker, I think this is a very interesting motion put forward by the Hon. Member for Kamloops-Shuswap (Mr. Riis) and is deserving of further consideration. His motion reads:
That, in the opinion of this House, the government should consider the advisability of co-operating with the provinces in establishing a system whereby those individuals who deposit money in financial institutions not covered by deposit insurance be required to sign a waiver form indicating that they are fully aware that their deposits are not insured in the event that the institution goes bankrupt.
It is a very interesting and positive consumer protection measure. At the present time instruments which are covered by deposit insurance are supposed to be stamped on their back. The theory is that the well-informed consumer looks for the stamp and if it is not there does not invest. In fact, we have found recently that many people, particularly older people when they have sold their house which is perhaps their main asset, tend to believe what salesmen tell them. If salesmen tell them that something is insured, they accept that and do not look for the written proof.
The measure before us would put the onus on the financial institution to have the buyer sign a waiver saying that he or she understands that this investment is not insured, if that is the case. I think it is a very positive approach which takes into account that not all investors are knowledgeable and sophisticated. It does not seem to me that it is an enormous amount of paper work or a heavy burden to place on financial institutions.
The history of the number of institutions which have failed in recent years is, of course, very alarming. I believe we are past that for a whole variety of reasons. One reason is that we are now in the sixth year of recovery from recession. Another reason is that the powers of the Superintendent of Financial Institutions have been increased. As well, people are now much more aware of the risks involved in investment as a result of the unhappy experiences of others and the attendant publication.
Even so, as a result of the recent failure of the Principal Group, which is provincially registered, I received a lot of letters, as I am sure other Members of Parliament did, from people who had invested, believing what the salesman told them, and learning too late that their deposits were not insured. These were small investors who, in many cases, lost their life savings.

February 29, 1988

For that reason I think the Flon. Member's motion should be very seriously considered. Some of the measures that we have taken in the past few years have taken a lot of taxpayers' money, that of financial institutions, and a lot more time, effort, and money than would this simple measure which the Hon. Member is proposing.
On March 25,	1985, the Conservative Government
announced its bail-out of the Canadian Commercial Bank of $225 million. That Bill received Royal Assent on March 29 because the House co-operated as we were facing what was then an almost unheard of situation, the risk of the failure of a Canadian bank. That $225 million was made up of contributions from banks, from two provinces, and from the Government of Canada. At the end of August, 1985, the Bank of Canada advanced over $500 million to the Northland Bank.
Bank of Canada advances to the Canadian Commercial Bank totalled $1.3 billion by this time. However, this assistance was all for nothing because on September 1, 1985, the Minister of State for financial institutions announced that the Canadian Commercial Bank would go into liquidation, and it was later followed by the Northland Bank.
At that time the Government introduced legislation to reimburse fully those depositors of the Canadian Commercial Bank and the Northland Bank whose holdings exceeded the insurable limit of $60,000. However, there were some people who held instruments which were not insured at all. We have seen massive investment of public money in order to assist people who found themselves with uninsured deposits or only partially insured deposits when a financial institution failed.
The proposal of the Hon. Member would make it very clear to consumers if they are buying into something which is not insured. That, of course, would affect consumers choices. For this reason, 1 think this motion should be considered very carefully. The Hon. Member has suggested that this be done in association with the provinces. Clearly that is very important because some of the failures which have caused such anguish to people have in fact been of provincially registered institutions.
1 will not delay this any more as I know other Members wish to speak. In spite of what the government Member who just spoke said, I think this proposal has merit and 1 would like to see it referred to the Standing Committee on Finance and Economic Affairs.


John Martin Oostrom: Mr. Speaker, the motion of the Hon. Member for Kamloops-Shuswap (Mr. Riis) gives me a welcome opportunity to address a number of my own concerns which I know are shared by other Members as well as by the Government. I think it is particularly appropriate to be looking at the question of consumer protection-whether by the CD1C or by other means-at a time when the process of reform of the financial sector is well under way.
We all know of the situations which have come to light over the last few years which made it clear that changes had to be
Financial Institutions
made to protect the interests of consumers, depositors and others. Even though the Principal Group affair is entirely within provincial jurisdiction, it reminds us that we must always be vigilant, always concerned for the legitimate interests of the people who use our financial system.
As the Hon. Member for LaSalle (Mr. Lanthier) has pointed out, and as other Members know, the Government has already undertaken a number of improvements to the CDIC regime. Bill C-42, which was proclaimed in July last year, made three specific improvements to the provisions about which the Hon. Member is most concerned. 1 believe it has already been pointed out that prior to the passage of this Bill the law prohibited anyone other than a member of the CDIC from representing himself as a member of the CDIC.
We have now entrenched in the legislation existing regulations which ensure that when institutions take deposits which are not insured they must indicate that requirement in writing on the contract. It seems to me that for companies within federal jurisdiction this measure goes almost as far as the Hon. Member's motion if we assume that people signing contracts read them, which surely is not an unreasonable assumption.
Bill C-42 also extended the ban on unauthorized representations of the insured status of institutions or deposits to persons acting as agents for institutions. It also requires that member institutions that solicit funds for investment on behalf of their investment company subsidiaries or other non-members of the CDIC must give notice to potential investors that these funds are not insured by the CDIC.
The Canada Deposit Insurance Corporation covers all federally regulated deposit-taking institutions and the major provincially regulated deposit-taking institutions as well. I think the state of the legislation and regulations which govern these institutions is in an acceptable state.
The motion before us draws attention to other institutions and to other types of involvement than classic deposits. These other institutions and instruments are already around. As the Government's reform of the financial sector continues to be implemented, and as the sector grows accustomed to the new opportunities it has, it will be increasingly important to pay attention to consumer protection.
It does not take a lot, for example, to see that the new networking proposals, which will undoubtedly give new opportunities to institutions and new options to their customers, will also mean that customers will need more knowledge of institutions. We have already seen new links growing between banks, which are members of the CDIC, and securities dealers, which are not. Our reforms will permit even further linkages, but they also provide for protection for customers.
I sincerely hope the legislation on trust and loan companies will be before us very soon. In the meantime, we have been assured that the remaining legislation to implement reform

February 29, 1988
Financial Institutions
will follow the outlines of the draft released in December, 1987. On that basis, the Government is clearly moving effectively to deal with potential problems.
The legislation will give the Government the power to make regulations imposing terms and conditions with respect to the potentially confusing activities of member institutions which are linked to non-members, and which offer a variety of services, some of which are insured deposits and some are investments. I think it is good news, and very appropriate, that the Government is also working with the insurance industry to arrive at an acceptable way of dealing with some deposit-like instruments. In effect, we want to find a way of ensuring CDIC-like coverage for policy holders in both sectors of the industry.
I have been assured that the two plans, one for the life and health companies and one for the property and casualty companies, should be in operation by the end of 1988 or the beginning of 1989. That leads me back to a key element in any further progress, the co-operation of both the federal and the provincial Governments. The need for co-ordination is one of the most pressing issues facing the sector, I believe, once the reform package is in place. Confusion is the only result when authorities with shared jurisdictions cannot get together, and these days that is often the case.
Happily we know that under the present administration consultation and co-operation with the provinces is a very high priority. In this field, particularly, Ministers responsible for financial institutions have already spent a lot of time over a number of years looking at some of the problems faced by the sector. Over time, I believe we will reach appropriate solutions.
In closing, I want to congratulate the Government on its concern for customer protection in the financial sector. Its actions and proposals will go a long way to ensure that everyone has the proper information and can make decisions without confusion. No doubt there can be improvements. I do not know of a perfect system anywhere. However, I do not think there is the kind of urgency for further change that lies behind Motion No. 143. I believe customers are already well protected and that the Government is taking appropriate action to extend that protection even further.
IMr. Simon de Jong (Regina East): Madam Speaker, I wish as well to join in the debate on Motion No. 143. As opposed to the previous speaker on the government side, I do not feel the Government has done enough to protect investors, particularly, depositors. When it comes to co-operation with the provinces, I wish as well to show that the federal Government and its agency, the CDIC, has not co-operated at all with an attempt by an inquiry in Alberta to determine exactly why Principal Trust went under.
I became quite concerned about the collapse of the groups under Principal Trust when a fair number of my constituents wrote to me expressing their concerns. Many of them were not sophisticated investors but had put their life savings, the money they had saved all of their lives, as much as $30,000 and $40,000, into these companies. They were assured over and over again that their deposits were insured. I attended a mass meeting in Regina and later on talked to people who
considered themselves to be sophisticated investors. They too were fooled. They too had been given the assurance that their deposits would indeed be protected. I would like to read from a letter I received from George Mertler of Regina. It reads:
1 am 65 years of age. I have been putting my RRSPs in with them for the last 20 some years.
He is referring to the Principal Trust in Regina.
Up to date I have about $40,000 the last few years. The sales people at Principal have talked me into investing into Associate Investors and First Investors Alberta companies. They assured me that these companies were safe as they were covered by the Alberta investment contract and assets equal to their liability placed in a Canadian chartered bank.
I could read several other letters, Madam Speaker. I have been on my feet in this House on numerous occasions. When the Government called us back in the middle of the summer I took the opportunity during Question Period to ask the Minister of State for Finance (Mr. Hockin) and the Minister of Consumer and Corporate Affairs (Mr. Andre) if there would be any federal investigation. At that time I was told, no, it was not necessary because the Alberta Government had already instigated an investigation. On August 12, 1987, the Minister stated: "The Minister of Consumer and Corporate Affairs and I will be meeting on this matter this week. Our response will be made known to the House very shortly". I am still waiting for their response.
The Minister of Consumer and Corporate Affairs assured me on August 26, when asked when the Department of Consumer and Corporate Affairs would complete its investigation in terms of misrepresentation, that it had indicated two or three weeks previously that it was expecting it to be done by the end of August, and that it will or will not make recommendations to the Attorney General based on that investigation. Well, we are still waiting for that Department to decide whether or not it would recommend laying criminal charges.
Last month, again, I had some indication that the Government is not co-operating, that it was not attempting to find out what really happened with the Principal Group. Despite the assurances I have received, especially from the Minister of State for Finance, that the Alberta inquiry would be a full and open public inquiry, we have found out that the Canada Deposit Insurance Corporation, which is really under the control of the Government, the Minister of Finance and the Minister of State for Finance, had refused to co-operate with the investigation in Alberta. It had refused to turn over essential documents relating to how CDIC had ordered the trust company, for which it was providing insurance, to place some of its dubious portfolios with First Investors and Associate Investors. The Code lawyers took CDIC to court and the court in fact has determined that CDIC should turn over those records. Now, apparently, CDIC at a meeting of its directors in two weeks time will decide whether or not to appeal that decision to the Supreme Court. Talk about cooperation; talk about an open inquiry; talk about the federal Government wanting to co-operate with the provinces! Here it had an opportunity of co-operating with the provinces. In fact, it forced the inquiry that was established by the Province of Alberta to go to court. CDIC is even considering appealing the lower court's decision to the Supreme Court.
February 29, 1988

The real issue is, why has the Government not voluntarily co-operated with the Code inquiry rather that choosing to enter into this costly, lengthy, and wholly unnecessary legal battle?
1 also wish to know where the Tory Alberta caucus has been on this issue. This issue has affected thousands of their constituents. They have been silent on this issue. Certainly, we have heard them roar when it comes to issues like the CBC. But in terms of pressuring their own Government to co-operate with this inquiry they have been very silent indeed. Thousands of angry Principal Group investors are asking where the federal Government is, and what is its responsibility. They want to know why the federal Government is not co-operating with the Code inquiry.
The motion that has been presented to us by my colleague, the House Leader of the New Democratic Party, is a good motion. It will require, when certain financial instruments or the institution itself are not covered under the CD1C insurance, that that becomes known to the investor.
As we move into the deregulation of financial institutions, there will be more and more different types of financial instruments. Some will be covered under deposit insurance, and some will not be covered under deposit insurance. It is very important that we have the necessary legislation and regulations that will force these various financial institutions to be up front and honest with the depositors in terms of the types of insurance that those depositors will receive.
It is also very important that we in western Canada are able to develop our own financial institutions. Unfortunately, in the last year or so we have had a very bad track record. A major reason has been the type of bandits who have flourished in western Canada during a boom period. We saw it through the various major financial institutions that have gone belly up. There have been unethical practices and questionable legal practices. In fact, I suspect that the courts will eventually have to decide whether to lay criminal charges against some of the owners of Principal Trust. A certain amount of regulation is needed.
It is important to protect investors in western Canada, many of whom want to invest and deposit their money in local institutions because they want to see viable financial institutions in western Canada. In order to protect those depositors it is important that those financial institutions be forced to tell the depositors whether their deposits will be covered under insurance.
As more information comes out through the Code inquiry and we see what happened to the Principal Group, it will be sad to see the lack of co-operation that the federal Government had given to that inquiry. CDIC has not been forthcoming
Financial Institutions
with the essential documents requested by this inquiry. It had to become a court fight. Even now CDIC is considering appealing that decision. The company is dead, yet CDIC is insisting on protecting the confidentiality of this defunct company. The lawyers of the inquiry have assured CDIC that they will do everything possible to retain confidentiality.
We see a Government with a sad record when it comes to financial institutions, particularly the latest one involving Principal Group. I would urge the House to accept the motion presented by my colleague this afternoon.


Donald Alex Blenkarn: Madam Speaker, I wish to assure my colleague that the Government does not believe that western Canada is populated by bandits. 1 can assure the Hon. Member that the Government has done a great deal to attempt to make western institutions viable.
Although there have been some serious problems, I am pleased to see the amalgamation of the Western and Pacific Bank with the Bank of Alberta. I am pleased to see the efforts of the Government with Alberta trust companies and the recent advance by CDIC of $290 million. I am pleased to see the efforts that were made, perhaps they were not as successful as they might have been in preserving the Bank of British Columbia, but we all rejoice in the fact that the Hongkong and Shanghai Bank group, after a great deal of persuasion and at the expense of $200 million from the Canada Deposit Insurance Corporation, was willing to ensure that the Bank of British Columbia, its branches, the people and the service that was provided to western Canada from that organization are still in place.
To suggest that the Government has been tramping on western Canada, as the Member for Regina East (Mr. de Jong) has suggested, is just not so. He ought to know better. He ought to apologize to the Canada Deposit Insurance Corporation.
The Hon. Member mentioned the fact that Canada Deposit Insurance Corporation was concerned about certain matters in connection with Principal Trust Company, and that it did not want to make certain disclosures. I can understand that. The nature of the work that the Canada Deposit Insurance Corporation does with trust companies, banks, and others right across the country, is of such a nature as to demand confidentiality. To allow the number of representations, the advances, and the type of work that is done on a day-to-day basis to be made public would indicate something that might cause runs on other financial institutions. It is important to ensure that our financial institutions have the benefit and the support that they have had from the Canada Deposit Insurance Corporation.

February 29, 1988
The Budget
May I point out to the House that through this period of bank collapses I have yet to have a person come to me as a Member of Parliament involved in the finance committee and say to me, "1 thought I was guaranteed by Canada Deposit Insurance Corporation. Why have 1 not been paid?" People have been hurt who have invested in places like the teachers' co-op, who have invested in high-flying activities run by mutual salesmen licensed by the Province of Alberta in the Principal matter who should have been properly supervised. They did take people's money.
It is nonsense to suggest that by signing some type of waiver all of the problems of the world brought about by high fliers and by people who do not have a sense of trust and responsibility will be covered. That is the intent of this resolution, and it does not stand up.
I notice that you are signalling, Madam Speaker, that my time is up. I would like to continue my remarks later. [Translation]


The Acting Speaker (Mrs. Champagne):: The hour provided for consideration of Private Members' Business has now expired. Pursuant to Standing Order 36(2), the order is dropped to the bottom of the list on the Order Paper.
It being six o'clock p.m., pursuant to Standing Order 13(5), the House will now proceed to the taking of the deferred division.




[Stage Direction]
The House resumed from Friday, February 26, consideration of the motion of Mr. Wilson (Etobicoke Centre) that this House approves in general the budgetary policy of the Government.
The Acting Speaker (Mrs. Champagne):: The House will now proceed to the taking of the deferred division on the motion of the Minister of Finance (Mr. Wilson) in relation to the Budget.
Call in the Members.


The Acting Speaker (Mrs. Champagne):: I declare the motion carried.
It being 6.26 p.m., this House stands adjourned until tomorrow at 11 a.m., pursuant to Standing Order 3(1).


[Stage Direction]
The House adjourned at 6.26 p.m.
[Stage Direction]

Tuesday, March 1, 1988

[Stage Direction]
Prayers