1988-02-23

[Stage Direction]
A message from Her Excellency the Governor General transmitting Estimates for the financial year ending March 31, 1989, was presented by the Hon. Don Mazankowski (Deputy Prime Minister and President of the Privy Council) and read by Mr. Speaker to the House.

Hon. Don Mazankowski (Deputy Prime Minister and President of the Privy Council):: Mr. Speaker, I would also like to table in support of the Estimates, Part I, the Government Expenditure Plan. In addition, I have tabled with the Clerk of the House, on behalf of my colleagues, Part III of the Estimates consisting of 78 department expenditure plans. These documents will be distributed to members of the standing committees to assist in their consideration of the spending authorities sought in Part II of the Estimates.
Pursuant to the provisions of Standing Order 83 I move:
That the Main Estimates for the fiscal year ending March 31, 1989, laid
upon the Table earlier this day, be referred to the several Standing Committees of the House as follows:
Since the list is rather long and there is a detailed allocation of the Estimates to the committees, if it is agreeable with the House I would ask that the list be printed in Hansard as if it were read.


Mr. Speaker:: The House has heard the suggestion of the Hon. Deputy Prime Minister (Mr. Mazankowski). Is that agreed?


Some Hon. Members:: Agreed.
[Editor's Note: List referred to above is as follows:]
To the Standing Committee on Aboriginal Affairs and Northern
Development
Indian Affairs and Northern Development, Votes 1,5, 10, 15, L20, L25, 30,
35,40, 45, 50 and L55.
To the Standing Committee on Agriculture
Agriculture, Votes 1, 5, 10, 15, 35, 40, 45, 50, 55 and 60.
To the Standing Committee on Communications and Culture
Communications, Votes 1, 5, 10, 15, L20, 25, 30, 35, 40, 45, 50, 55, 60, 65, 70, 75 and 80.
To the Standing Committee on Consumer and Corporate Affairs Consumer and Corporate Affairs, Votes 1,5, 15, 20 and 25.
To the Standing Committee on Elections, Privileges and Procedure Privy Council, Vote 10.
To the Standing Committee on Energy, Mines and Resources
Energy, Mines and Resources, Votes 1,5, 10, 15, L20, 25, 30, 35, 40, 45, 50 and 55.
To the Standing Committee on Environment and Forestry Agriculture, Votes 20, 25 and 30.
Environment, Votes 1,5, 10, 15, 20, 25 and 30.
To the Standing Committee on External Affairs and International Trade External Affairs, Votes 1,5, 10, 15, 20, 25, 30, L35, L40, 45, 50 and 55.
To the Standing Committee on Finance and Economic Affairs Finance, Votes 1, L5, L10, 15, 20, L25, 35 and 40.
National Revenue, Votes 1,5, 10 and 15.
Privy Council, Vote 20.
To the Standing Committee on Fisheries and Oceans Fisheries and Oceans, Votes 1, 5 and 10.
To the Standing Committee on Government Operations Consumer and Corporate Affairs, Vote 10.
Governor General, Vote 1.
Parliament, Vote 1.
Privy Council, Votes 1, 5 and 25.
Public Works, Votes 1, 5, 10, 15, 20, 25, 30, 35, 40, 45, 50, L55, L60, 65, 70 and 75.
Secretary of State, Vote 15.
Supply and Services, Votes 1, 5 and 10.
Treasury Board, Votes 1,5, 10, 15, 20, 25 and 30.
To the Standing Committee on Human Rights Justice, Vote 10.
To the Standing Committee on Justice and Solicitor General Justice, Votes 1,5, 15, 20, 25, 30, 35, 40 and 45.
Solicitor General, Votes 1,5, 10, 15, 20, 25, 30 and 35.
Privy Council, Vote 30.
To the Standing Committee on Labour, Employment and Immigration Employment and Immigration, Votes 1, 5, 10, 15, 20, 25 and 30.
Labour, Votes 1,5, 10 and 15.
To the Standing Committee on Management and Members' Services

February 23, 1988
Tabling of Documents
Parliament, Votes 5 and 10.
To the Standing Committee on Multiculturalism
Secretary of State, Votes 1 and 5 (portions dealing with Multiculturalism). To the Standing Committee on National Defence National Defence, Votes 1, 5 and 10.
To the Standing Committee on National Health and Welfare
National Health and Welfare, Votes 1, 5, 10, 15, 20, 25, 30, 35, 40, 45, 50, 55, 60, 65 and 70.
To the Standing Committee on Public Accounts Finance, Vote 30.
To the Standing Committee on Regional Industrial Expansion Atlantic Canada Opportunities Agency, Votes 1,5 and L10.
Indian Affairs and Northern Development, Votes 60 and 65.
Regional Industrial Expansion, Votes 1, 5, 10, 15, L20, L25, 30, 35, 40 and
45.
To the Standing Committee on Research, Science and Technology Science and Technology, Votes 1, 5, 10, 15, 20, 25, 30 and 35.
To the Standing Committee on Secretary of State
Secretary of State, Votes I and 5 (except Multiculturalism portions) and Votes 10, 20, 25 and 30.
To the Standing Committee on Transport
Transport, Votes 1, 5, 10, 15, 20, 25, 30, 35, 40, 45, L50, 55, 60, 65, 70, 75, 80 and 85.
To the Standing Committee on Veterans Affairs Veterans Affairs, Votes 1,5, 10, 15 and 20.
That the Privy Council Vote 15 be referred to the Standing Joint Committee on Official Languages.
That a message be sent to the Senate to acquaint Their Honours thereof.


[Stage Direction]
Motion agreed to.

Donald Frank Mazankowski: Mr. Speaker, I am pleased to table the Main Estimates for 1988-89, which total $119 billion. These estimates support what my colleague, the Minister of Finance (Mr. Wilson), said in his recent Budget speech about the fiscal intentions of this Government.
We are firmly committed to restraint through good management of the public's resources while responding with positive actions to introduce new initiatives in high priority areas. These Main Estimates are consistent with the planned expenditure levels outlined in the Budget earlier this month.
Our total spending plan for 1988-89, which includes these Main Estimates and reserves for Supplementary Estimates,
totals $132 billion. That is 5.5 per cent above planned spending in 1987-88. If we exclude public debt charges and look at program expenditures, the growth is only 4.3 per cent.
The average annual increase in budgetary expenditures of 4.9 per cent over the last four years contrasts sharply with the average increases of more than 15 per cent in the preceding five years. Excluding public debt charges, we are looking at an average increase of 3.7 per cent versus 14 per cent in the previous period.
The Main Estimates increase by 7.7 per cent over the comparable 1987-88 level. This growth rate is accommodated within the over-all 5.5 per cent growth in planned budgetary expenditures.
The growth in Main Estimates is larger than that targeted for total spending for the year because the Government has built a greater portion of its new spending initiatives into the Main Estimates than it was able to last year, leaving fewer resources for in-year adjustments through Supplementary Estimates in 1988-89.
These Main Estimates provide for a number of new initiatives that the Government has announced over the past few months to respond to the pressing needs of Canadians. They include $306 million for the Atlantic Canada Opportunities Agency, $312 million for the western diversification office, a $197 million increase for other regional development initiatives such as that for northern Ontario, $296 million to complete the $1.1 billion special grains program for the 1987 crop year, and $40 million of the $210 million to be spent on the National Drug Strategy over a five-year period.
The Government has recently announced a number of new initiatives which are not included in these Main Estimates. Further endeavours in the area of science and technology and increased programming for the elderly will appear in Supplementary Estimates over the course of 1988-89.
The Government's child care strategy will be built into estimates following further discussion with provincial governments and the passage of legislation. Funding for all of these is incorporated in the $132 billion expenditure plan within the growth of 4.3 per cent in program expenditures.
Apart from the new initiatives, I would like to outline briefly where the growth in estimates has occurred. Public debt charges are $3.9 billion or 13.7 per cent higher than last year. This burden can be lightened only over the long term through good fiscal management and continued reductions in the level of the deficit.
As well, we are providing an additional one-half billion dollars to the provinces to help finance health, educational and welfare services.
In addition, direct transfer payments to the provincial and territorial governments will rise by almost $1 billion under equalization and other programs.
February 23, 1988

Direct payments to elderly Canadians will rise through an additional $860 million in old age security payments and a further $134 million in Guaranteed Income Supplements.
Thus, of the $8.5 billion increase in these Main Estimates, $3.9 billion or 45 per cent is accounted for by public debt charges and $2.4 billion or 28 per cent relates to increased expenditures for large social programs, including support for health care and education and the direct support to the provinces and territories which I have just mentioned.
The Main Estimates can be divided into two categories: statutory and voted expenditures. The statutory items, totalling $78.5 billion, are programs whose spending is covered by separate legislation. Public debt charges, to which 1 have already referred, account for $32 billion or 40 per cent of that.
The remaining $46.5 billion includes over $20 billion in transfer payments to individual Canadians and more than $20 billion in transfers to provincial governments. Elderly Canadians receive about three-quarters of all the transfer payments to individuals.
Payments to the provinces provide funding for health care, post-secondary education, and welfare assistance and enable provinces to provide their residents with a reasonable level of public services at reasonable comparable levels of taxation.
In addition to those cash payments, the Government provides assistance to the provinces in the form of tax transfers which, in 1988-89, will exceed $9 billion, bringing total financing for health, education, social assistance and other public services to some $30 billion.
The other $41 billion of these Main Estimates, which Parliament will be asked to authorize through the appropriation Bill, reflects a wide variety of expenditures across all departments.
These voted appropriations include $10 billion out of a total Defence spending budget of $11.2 billion, most of the regional development expenditures through the Department of Regional Industrial Expansion, the Atlantic Opportunities Agency, the western diversification office, as well as the special grains program and other recent initiatives such as the Drug Strategy-
Over the past four years, voted appropriations have risen on average by less than 3 per cent a year in comparison with an average of almost 13 per cent through the early 1980s. This low rate of growth, maintained over four years, reflects our real achievement in managing government more efficiently and sustaining fiscal restraint. Public spending is firmly under control.
As Hon. Members are aware, the estimates also set out the person-year authorities allocated to departments and agencies. In May, 1985, the Government introduced a plan to reduce the size of the Public Service by 15,000 person-years over a five-year period.
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We began in 1986-87 with the reduction of some 5,500 person-years. This was followed by a further 3,100 last year and over 1,900 for 1988-89. While we have downsized the Public Service by more than 10,000 person-years, as of February 12, only 634 of the employees affected had actually been laid off.
Over the remaining two years of the program, the Government will reduce its person-year authorities by about one per cent each year and 1 fully expect that the redeployment efforts which are integral to the workforce adjustment policy will continue to be successful in relocating affected employees.
I want to stress that these Main Estimates reflect this Government's efforts to maintain a balance between spending restraint and the introduction of new initiatives aimed at responding to the needs of the average Canadian.
In accordance with the normal procedures of the House, these estimates will be referred to the appropriate standing committees which will have ample opportunity to review the estimates and report to the House. In June, we will again discuss the estimates in the House before the passage of an appropriation Bill granting full supply.
As my colleague, the Minister of Finance, emphasized, we established a financial plan in 1984, and we have stuck to it, reducing the deficit, controlling expenditures, eliminating waste and duplication, and scaling down the burden of Government.
Within this fiscal framework we have found the necessary resources to meet our policy commitments on regional development, defence, child care, science and technology. We will continue the same prudent course in 1988-89.


Some Hon. Members:: Hear, hear.


Mr. Len Hopkins (Renfrew-Nipissing-Pembroke):: Mr. Speaker, as I rise today to comment on the Treasury Board Estimates and on the Minister's statement, I simply want to say that of all the Estimates that I have seen brought down in this House, none have been brought in to paint over the cracks in the plaster more so than these Estimates today.
We were talking about fiscal responsibility, and the Minister has sat down after making what he thinks are some very constructive comments and which he hopes will wash. The fact of life is that since the Government came to power in September, 1984 the national debt of this country has increased by 66 per cent. Indeed, it has increased by $116.6 billion in 3.5 years.
The Government campaigned in 1984 on fiscal responsibility, and it is still talking in that tone today. For example, in the Government's June White Paper on Tax Reform, it stated in the Estimates that it would only cost $30.1 billion to service the national debt. The Government has since found that it will cost another $2 billion to finance or carry the national debt, because it has not been keeping interest rates under control in

February 23, 1988
Tabling of Documents
the manner in which it has been telling the Canadian public that it has been doing so. The Canadian dollar is increasing in value, but Canadian interest rates are going up.
The Prime Minister (Mr. Mulroney) and members of the Government have bragged in the House about keeping interest rates under control. Today the Canadian public must come up with $2 billion more in interest rates alone simply because the Government has not been able to keep its financial and fiscal responsibility under control. That is a fact of life.
Six months ago the Government announced that it could finance and carry the national debt for this year for $30.1 billion. Today it will cost $32.1 billion, only six months later. The Government talks about keeping interest rates down and it has failed to do so. What I have just mentioned is the proof.
The Premier of Ontario wants to see interest rates kept down. Premier Bourassa, who has been friendly with the Prime Minister in certain cases, wants to keep interest rates down. The Prime Minister is letting down the Premier and the Province of Quebec. The Canadian Chambers of Commerce and the Canadian Manufacturers' Association all want to see the Government keep interest rates down.


Donald Frank Mazankowski: What did you do when interest rates were at 23 per cent? You have a lot of nerve.


Leonard Donald Hopkins: The Minister asks, "What did you do?" A little while ago very self-righteously he mentioned that he was comparing it to the early 1980s. That is what I mean by the facade that the Government carries on. The Minister knows full well, as does every Canadian, that in the early 1980s there was one of the greatest recessions that this world has had since the 1930s-under a Tory Government at that time-and that is a fact of life too.


Donald Frank Mazankowski: Blame someone else.


Leonard Donald Hopkins: Let us talk about the details of the expenditure plan tabled today by the Government. What about the reserves in this money not allocated for 1988-89? When one takes a look at that, one wonders just when the election call will be. In the envelope on specific reserves the Government has labelled $1.7 billion. As you know, Mr. Speaker, since you are a long-time Member of this House, in general reserves the money can go almost anywhere. What a nice slush fund for an election campaign. Under that envelope the Government has allocated $2.5 billion. The Government talks about fiscal responsibility and it has sitting in the reserves, in the slush fund for the next election* a total of $4.2 billion.


Mr. Boudria:: Shame!


Donald Frank Mazankowski: It was 6.1 last year. What are you talking about?


Leonard Donald Hopkins: One must ask, is this an election year? What are the goodies? Where is all the fiscal responsibility that we
heard about in 1984, and in the rhetoric of this Government ever since 1984?


Don Boudria: Talk about Sine Stevens.


Leonard Donald Hopkins: There is another one, Mr. Speaker. My hon. colleague from Glengarry-Prescott-Russell (Mr. Boudria) says to talk about the Hon. Member for York-Peel (Mr. Stevens). I just happen to have that as my next comment.
On page 24 of the Estimates on the Privy Council under the commission of inquiry with regard to the former Minister of Regional Industrial Expansion, the Hon. Member for York- Peel, we see that the Government has paid out $2.9 million for that commission of inquiry. That is for one investigation into one Minister in the Government, and the Government talks about fiscal responsibility. We built the Pembroke and area airport for almost that amount of money. Some community is going without another airport or without something else because of the $2.9 million that this Government has spent on the Hon. Member for York-Peel, the former Minister of Regional Industrial Expansion.
The Government talks about down-sizing the Public Service. For heaven's sakes, let's be realistic and honest with the Canadian people. The Government down-sizes the Public Service one day and the next day it hires people back on contract to do the same work that the people did when they were on staff. If the job is not done properly, what happens? Someone else has to come along and finish the job and there is an overcharge. While the Government is attempting to downsize the Public Service it is contracting work out just as fast.
I could talk about agriculture, and I am sure our critic on agriculture would want me to mention that it is obvious that the Government is in the process of finally destroying the Farm Credit Corporation.


Don Boudria: They are dismantling it.


Leonard Donald Hopkins: They are dismantling it. There is no question about it, it is right here.
Let us talk about all this great work on national defence. I have never seen such a sham in my life. The Government has made a commitment to increase the National Defence budget by 3 per cent annually in real terms. The Government has only done that once in the four years that it has brought down Budgets in this House. Only once out of four years, and in the other three years it did not meet its NATO commitment. Yet here is a Government that talks about doing such great things for national defence.
We heard a lot about the reserves lately, and I want to read a comment here from the Winnipeg Free Press about neglecting the reserves in the Armed Forces. The article states:
When Defence Minister Perrin Beatty introduced his white paper last June, he said, of Canada s reserves: "They have been gravely neglected in recent years. We intend to see these citizens-soldiers, sailors and aviators-receive the recognition they deserve and we will give them a priority that they have not had for several decades."
February 23, 1988

They have certainly been given a priority, Mr. Speaker, because the article further states:
Evidence of this new priority was received by reserve units in Winnipeg this
week. They have been told that in the coming year they will have to get by
with 12.5 per cent less training time than they had this year.
On research and development the Government talks about all the money that it has put out in special programs in research and development. I have figures which show, despite all their rhetoric, that they have actually spent less on research and development than was being spent before.
The Government is not keeping its commitments in that regard. It has downgraded all major research facilities like NRC, NSERC, Science Council, Medical Research Council, agriculture, and forestry. It has downgraded them, cut them by $75 million over the last three years or four years. Then it comes along with a $112.7 million increase and says, "What great people are we".
However, what government Members forgot to mention was that they had cut $60 million from AECL and $70 million from the reserves, which means that they have actually put $93 million less into R and D than they are claiming they did, that they promised to do, and that in fact was there before.


The Acting Speaker (Mr. Paproski):: I regret the Hon. Member's time has expired.


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I want to say a few words about the Estimates that are before us and about the possibility, as the Deputy Prime Minister (Mr. Mazankowski) has said, of spending $132 billion in the next fiscal year. I want to make two major points. They are questions of fairness about how the Government is planning expenditures in 1988-89.
First, Mr. Speaker, I think you would be very interested in Part I of the 1988-89 Estimates, "The Government Expenditure Plan". If we look at the record of what the Conservative Government has been doing, we see that the Government is now spending more money in terms of percentage of its expenditures on the public debt than it was some four years ago. Back in 1984-85 some 20.6 per cent of government expenditures was on interest on the national debt. Some 24.6 per cent of the expenditures of the Government now will be on our national debt. This is an increase of 4 per cent, from 20.6 per cent to 24.6 per cent since the Conservative Party took office in 1984. It is the largest expenditure in any single envelope in the Government of Canada, and it is an increase of some 4 per cent. It is very, very high.
There has been argument in the House about why interest rates in the country should be brought down. If interest rates could be brought down we would save an awful lot of money. If interest rates were to drop by only 1 per cent, the Government of Canada would save $1.4 billion per year. Over four
Tabling of Documents
years, with a drop of 1 per cent, the Government of Canada would save some $9.5 billion.

Mr. Speaker, now that one-quarter of the Government of Canada's expenditures are being used to pay off this country's deficit, to the interest on the deficit, we have now spent about $32 billion of the Estimates for next year.
Mr. Speaker, if the interest rate were to be reduced by 1 per cent, there would be another $4 billion for the Government to spend on Canadians in just one year, and in four years there would be a total of $9.5 billion more.

If the Government would bring down the interest rate, we could use that extra $1.4 billion next year, or the $9.5 billion in four years, for regional development programs.
Second, since the Conservative Party has come to power, the amount of money, in terms of a percentage of the national expenditure, has gone down in regional development. Back in 1984-85, according to the Estimates, some 13.6 per cent of the expenditures of the Canadian Government went to regional development and economic development in Canada. In 198889 it will be down from 13.6 per cent to 10.3 per cent. That is a drop of some 24 per cent in the envelope for economic and regional development, a drop of some 24 per cent. That is not good enough.
If one were to exclude the Special Canadian Grains Program, a program which is very useful in western Canada, for the other regional and economic development programs, the expenditure drop is even greater in terms of a percentage of what the Government spends. It then goes down to some 10 per cent of the national Budget. We are now spending 10 per cent of the national Budget on economic and regional development, compared with 13.6 per cent when the Conservative Party took office some three and a half years ago. It is a drop of 26 per cent in terms of the over-all share which regional development is getting from the Conservative Party across the way.
I make the argument very simply this morning that the Government should be spending a greater share of the expenditures of the people of Canada on economic and regional development.
In the last year some 47 per cent of jobs created in Canada were created in the Province of Ontario. I am very pleased that the Province of Ontario has a lot of job creation, but even in Ontario the vast number of these jobs are located in the area around Toronto. The unemployment rate is high in Windsor. It is high in northern Ontario. There are problems in the City of Hamilton and problems in other areas. Some 47 per cent of the jobs are being created in one province.
What I am arguing today is that we must allocate a greater share of the national expenditure to regional and economic development so that western Canada, the North, parts of

February 23, 1988
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Ontario, Quebec, and the Atlantic provinces, share in the economic recovery. Is that too much to ask of the Government across the way?
I repeat the point that when they came to power three and a half years ago, 13.6 per cent of expenditures went to economic and regional development. Now, some three or four years later, they are budgeting for only 10 per cent if we do not include the Special Canadian Grains Program. It is 10.3 per cent, if we include the grains program, for regional and economic development.

Mr. Speaker, federal spending on regional economic development programs has dropped substantially by about 24 per cent, I believe-programs that are vital to Quebec, to western Canada, to the North, to the Atlantic Provinces and to Northern Ontario. This Government is now spending less, percentage wise, then it was spending four years ago on regional economic development. This is unfair to our regions here in Canada.

In addition to an interest rate that is too high, which means that we are using some 25 per cent of our money to pay off the national debt; in addition to spending a diminishing share of our national money on regional economic development, I also notice, in terms of fairness, that the Government estimates that it will be spending less on contributions to native economic development programs. I see the Minister responsible in the House. I wonder, in terms of fairness to our native, Indian, and aboriginal people, why the Government across the way is cutting down by about 8 per cent or some $6.25 million its contributions to native economic development programs.
We do not have fairness to our native people. We do not have fairness to the regions of the country. Finally, we do not have fairness in the Estimates in terms of older workers. There will be no new adjustments or designations of regions or industries for older workers. As a result of the February 1986 Budget the labour adjustment benefits program is gone, and older workers who were eligible for training are no longer getting the money they need in order to retrain. The new program which was announced, a program for older worker adjustment, still must receive some provincial-federal agreement, and therefore money is not being spent in that area. Thus older workers who are thrown on to the labour market have nowhere to turn in terms of retraining.
In conclusion, what we have before us today are the Estimates which will see us spending a greater and greater proportion of the Government's money, the taxpayers' money, the people's money in paying off the debt. The reason is that the Government across the way-and I am sure you share my concern, Mr. Speaker-has allowed the interest rate to get too high. If it would bring down the interest rate, we could save money and we could use that money in terms of regional economic development programs. This would be better for average Canadians or ordinary Canadians. It would mean
more fairness for each and everyone from one part of the country to another.

Mr. Speaker, we need and the Government of Canada needs new policies like this one.
I understand that in the Estimates, there is nothing at all to show an allocation of moneys for child care services. This, of course, was promised by certain Members across the way as recently as yesterday. That is another broken promise by the Government across the way which shows that it is a Government for the wealthy, for millionaires, for big shots and for big corporations. Years ago, my grandfather used to say that Tory times are tough times for ordinary Canadians, and they certainly are. It is the Party that brought us into the Dirty Thirties and it is the Party that once again is bringing regional inequity to this country.


EXTERNAL RELATIONS
Hon. Monique Landry (Minister for External Relations):: Mr. Speaker, I have just returned from Ethiopia. I appreciate this opportunity to report to Members, at the earliest possible moment, on what is happening there, and what role Canada is playing ... More specifically, to share with you some of my findings ... and some of my feelings.
Whenever I travel to Africa, it is always a privilege to represent the Government and the people of Canada. Mr. Speaker, I am very proud of what we are doing in Africa.
And I was relieved and pleased to see many positive things in Ethiopia-our close cooperation with the people of that country ... the deep involvement of local people in the struggle for development. .. and encouraging signs of progress in the fight against famine.

My trip allowed me to meet with a wide variety of our partners. I met people from Canadian NGOs such as the World University Service of Canada, Canadian Physicians for Aid and Relief, the Sudan Interior Mission and McGill University as well as Ethiopian officials and senior representatives of United Nations agencies including Michael Priestley who is the special representative of the Secretary General of the United Nations, and the resident representative for the United Nations Development Program.
February 23, 1988



I had the opportunity to visit the north. At Mekele, 1 saw the food airlift in operation, and at the nearby settlement of Wukro, I watched the food being distributed.
What I saw in the north was, above all, the color brown- rough terrain, terrible roads, barren land, parched soil. .. everything brown, and incredibly dry. The earth, boiled and baked by the sun, was mere dust, dry and dead. But 1 also saw a very effective airlift hard at work, with Belgian hercules, Russian antonovs, small planes and helicopters all working together effectively.
I saw unloading operations at Mekele, and it was inspiring. Up to twenty big planes come in each day, bearing up to twenty tonnes of food per plane-much of it Canadian grain. I saw the hardworking teams of about eighteen Ethiopians who meet each plane and unload that twenty-tonne cargo into trucks, by hand, in as little as twelve minutes. Anyone who witnessed their energy and efficiency, under trying conditions, would never speak lightly about people not trying to help themselves.
At Wukro, I saw a well-organized food distribution effort, which was operating very smoothly. Non-governmental organizations-particularly medecins sans frontieres beiges- and the relief and rehabilitation commission were working closely together.
The names of recipients were recorded, village by village, on a register ... and checked off as the people collected their rations-thirty kilos per family member, enough for two months.
This time, Mr. Speaker, unlike 1984-85, people are taking the food back to their village-walking as far as fifty or sixty kilometres-rather than gathering in huge feeding camps at the distribution site.

Three years ago when famine struck, we saw images of despair and scenes of human suffering that haunted our minds: men and women reduced to skeletons and, the ultimate horror, children dying on camera. This time, though lives are certainly at risk, the condition of the people seems much better. In general, they appear to be in fair physical shape and in good spirits. It was encouraging to note that this time there is an organized baby-weighing program to detect signs of malnutrition.
Famine relief was not the only way I saw food aid being used. It is also serving the cause of longer-term development. Specifically, we visited a food-for-work project also at Wukro. Three thousand people are working with hand tools building earth dams about six metres high and 200 to 300 metres long. These dams will turn depressions in the terrain into reservoirs to hold the run off when the rains do come. The work of these
3,000	people is paid in food which keeps 3,000 families going, and at the same time, these people are creating a basic system to irrigate more than 70 hectares of land.
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I also went south, to Wanda Genet, and then to Awassa to visit a Canadian-sponsored water project. Mr. Speaker, I can report seeing much that gave me a feeling of relief-and of hope. I saw excellent cooperation between Canadians and Ethiopians-real involvement of the local communities in the projects-and fine work by NGOs (notably the Vancouver-based Hope International). True enough, I had seen evidence of these things in the north, too ... But in a setting where hostile nature and civil strife made progress virtually impossible.
In the south, the same factors, working in a more benign environment, were producing visible progress. I was very impressed by the degree of organization and determination shown by the Ethiopians. Their concern for the longer term was quite obvious-in, for instance, their creation of a water training institute. The most striking thing about the trip to the south was the physical contrast with conditions in the north. Brown gave way to green. We saw fertile land again. And we realized that, compared to the dry, brown north, other parts of Ethiopia have much better agricultural and water potential.
I am grateful to have had the opportunity to see for myself, first-hand, some of the realities of a most difficult and often tragic situation. I learned some valuable things-some of them cause for concern, others cause for hope and even a degree of satisfaction.
First, overall conditions are much better than in 1984-85. A good basic organization is in place to cope with the present emergency. In general, it is working effectively-although there are places, such as Korem, where it works less well.
Enough food is flowing into Ethiopia to prevent famine. Transport within Ethiopia, however, is another matter-in fact, a critical problem. The roads, where they exist, are poor to start with, and some are now impassable because they are increasingly unsafe. There are not enough trucks-many have been destroyed. There is not enough fuel-there is, for instance, none in place at the moment for the airlift. Planes have to detour to Addis Ababa to refuel, making the airlift even less efficient and more expensive as a way of carrying food-and yet it's the only way to stave off disaster.
Mr. Speaker, I learned yet again about the vital work being done by NGOs, and about the excellent level of cooperation with and among international organizations. I learned, once again, how much the world relies on the international committee of the Red Cross, which is playing a key role in this complex situation.
I saw with my own eyes that some parts of the country have extremely limited capacity to support life while other parts are fertile and productive. The rationale for Ethiopia's resettlement program, whatever the political motives, was undeniably

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visible and plain as day; brown dust in the north, green land in the south.
[ Translation]
Mr. Speaker, I was, and I remain, very concerned over persistent rumours of the use of force in the recently renewed resettlement campaign-even of shootings of people reluctant to move. Independent observers have attempted to verify these rumours on site-but so far there is no conclusive evidence to confirm or to refute the disturbing stories.
1 took every opportunity to make the position of Canada- and the international community, for that matter-crystal clear. I have been assured by the Ethopian government that Ethiopia's official policy, in the resumed program, is for voluntary resettlement only.

I can testify, Mr. Speaker, as a firsthand witness that Canada is playing a valuable and significant part in helping to avoid a huge tragedy in Ethiopia. We did much in 1984-85. We are doing still more this time, and the Government of Canada will always be ready to aid the victims of disaster, whether the disaster is natural or man made. I can report that Canadians, along with people from many other countries, are doing marvellous work under the most difficult conditions, and I feel obliged to say that our continued help and support is a matter of life and death to millions of people whose future hangs on a precarious, knife-edge balance.
These few words can express only a fraction of my thoughts and feelings as I saw, briefly, the ordeal of the people of Ethiopia and the spirit of their struggle to survive and move ahead.
[ Translation]
In closing, Mr. Speaker, 1 will just mention that, on leaving Ethiopia, I proceeded to Bamako, to take part in the fifth bilateral consultation between Canada and Mali. I was able to visit one of the many excellent grassroots projects under way there, and to have good discussions on the difficult problems facing Mali and the other countries of the Sahel. And the meeting allowed me, on African soil, to assure the people of that country and that continent, once again, of the continuing concern and support they can count on, from the government, the parliament and the people of Canada.


Mr. Roland de Corneille (Egiinton-Lawrence):: Mr. Speaker, first, I want to say that I regret that I was not in receipt of a copy of the Minister's address until a very short time before the House began. Such an important subject deserves a worthy commentary from our Party and 1 do regret that we did not receive the text of this speech until such a late hour.
However, having said that, I want to express on behalf of our Party and of all Members of the House our sincere appreciation to the Minister for External Relations (Mrs.
Landry) for having herself gone to see firsthand the circumstances and the problems facing the people of Ethiopia and the problems facing those who are trying to do something about the tragedies that are taking place. Her visit is to be commended. We also appreciate her report in the House making it the business of all of us to be concerned about the events taking place in Ethiopia.
We are also proud of the role Canada is playing. The Minister pointed out that we are taking a very vigorous role. Our NGOs as well as our government officials are actively trying to do what they can. It was also stirring to hear the Minister tell us that many countries from around the world are working together. Instead of seeing our allies coming together to fight against other nations in war we see them coming together from both sides to war against this tragedy of hunger and famine. Those are all positive things. I hope my comments will be understood in the context of my congratulations to the Minister and also in the context of being pleased to hear the positive aspects of her report.
We have much to be thankful for that things are not in the same state and condition they were several years ago when famine struck Ethiopia and the world was caught quite flatfooted and fairly unaware. The media brought to our attention so effectively and valuably the horrors and starvation facing the Ethiopians. Now that the media aroused us to that kind of common concern, questions must be discussed and I want to raise these questions in the House as part of our concern.
We are told by the Minister that right now enough food is flowing into Ethiopia to prevent famine, that is, enough food is on hand. But the Minister goes on to point out that the problem of trying to transport the food to where the people are is horrendous. It appears that the solution is not to take the food to where the people are where their homes are, where their communities and traditions are but rather to bring the people to where the food is, namely, at the depots. That seems a little strange. It is quite obvious that one clear reason is that there is drought in the north and in the areas of Eritrea and we know that in northern Ethiopia as the Minister pointed out there is brown dirt, drought and, therefore, famine, and in the south it is greener.
Regrettably there are other dynamics at play. We know there is a guerilla war going on, a revolution, or a fight for independence, whichever way you want to put it and on whose side you happen to be sitting, but the people in Eritrea and Tigre are people who are concerned about their own independence and their ability to have freedom and to have their own way of life.
This war which goes on between the Government of Ethiopia and the rebels, or the people who are seeking independence, is also tragic. In the course of this war which has been going on for many years we know that people have been brought forcefully, resettled from the north, into Ethiopia in order to take away the bases of supply for the rebels. We know that horrendous violations of human rights have taken
February 23, 1988

place-some would even say a form of genocide in years gone-on the part of the Ethiopians against the people in that area in their so-called resettlement efforts. The Minister, however, is assuring us today. She says she is hopeful that this will not take place in future resettlement patterns, and I am hopeful as well. But we are confronted by a serious question as to whether these resettlement programs can be really said to be only a matter of trying to deal with the matter of bringing the people to the food and away from the drought areas, or whether also there are certain other factors in place that involve military and other political concerns on the part of the Ethiopian Government.
What is the Minister and the Department of External Affairs going to do about these problems? Flave we in the West, the more affluent countries with much wealth and power, really done enough in advance? Canada has such great abilities in transportation. Flave we in the past tried to ensure better transportation systems? Is there anything we could have done about it? That is a very important question in light of the danger of starvation and the tragedy of resettlement which is at hand.
What are we doing to monitor the human rights situation of these people? The Minister says that there is a voluntary resettlement program. How voluntary can a resettlement program really be when army trucks drive up to a community and load people up telling them that they are going south or they will starve, that there will be no food coming in? How voluntary is such a resettlement program? How much choice do they have? That is another question we must ask ourselves searchingly.
Can Canada, with all of its ability in the field of helping out, not use some of its influence to monitor the human rights of those people? What program do we have in place to monitor human rights?
There is an underlying question. What is the Department of External Affairs doing in terms of diplomacy to try to bring the world together. We can bring food together in such a wonderful way, but what are we doing to bring the world together through the United Nations or other ways to solve quickly the tragic war that is taking place in Ethiopia? Are we showing the same kind of energetic leadership as we are showing in the field of humanitarian concern to try to bring about a solution to this tragedy in Ethiopia? Can nations as powerful as the United States, the Soviet Union, Canada, France, Britain, China and India not bring a quick solution to the suffering that is caused in large measure by the tragic problems which exist as a result of the guerrilla war and the constant conflict? Can we not step in more energetically?
These are the kinds of questions which I think Canadians would want to address to the Minister. In appreciation for her report and in thanksgiving for the things that are being done,
Tabling of Documents
we yet have to ask these questions searchingly. We hope to hear from her further in response.


Mr. Howard McCurdy (Windsor-Walkerville):: Mr. Speaker, in the absence of my colleagues, the Member for Cowichan-Malahat-The Islands (Mr. Manly) and the Member for Winnipeg-Birds Hill (Mr. Blaikie), I am pleased to rise today on behalf of the New Democratic Party to respond to the Minister's statement.
With respect to the specifics of the latter, I would like to start by saying that we on this side of the House are genuinely concerned by the prospect that millions of Ethiopians are again facing starvation. Canadians must respond. The question is how.

When we try to fight famine in Ethiopia, we must realize that famine and the political situation are very closely linked. Granted, drought and gradual desertification are the main causes, but it is also true that the victims of these natural disasters are too often manipulated and used as bait both by the Government and the rebels who are locked in a struggle to control the country. We, and in fact all Canadians find this state of affairs abhorrent.
Hunger knows no politics, and we cannot let food be used as an instrument to control people. The Canadian Government and the international community must state clearly to the two forces who are locked in confrontation that Ethiopians who are dying of hunger must not be used as hostages.

Canadians believe that the larger and more serious problems of hunger and starvation cannot be ignored and must be addressed. In this respect Canadian aid programs need to consider two interrelated problems; what can be done to alleviate the critical hunger crisis facing Ethiopia today, and what can we do to alleviate the longer-term problems at the root of the current crisis?
Insofar as the immediate crisis is concerned, we believe that Canada must continue its emergency food and medical relief efforts in order to avoid another tragedy like the one we witnessed in 1984-85. I am sure everyone in this House would share that sentiment. Where the problems arise, however, is in ensuring that our humanitarian aid reaches those most in need rather than being used for political or military purposes.
I would have hoped that the Minister would have had more concrete measures to report in this regard. In particular, she should have outlined to this House and to the Canadian people what action the Canadian Government is prepared to undertake to ensure that Canadian and, indeed, all humanitarian aid is guaranteed free and unhindered access to the needy in all parts of Ethiopia; that relief convoys are clearly identifiable as such and that verification procedures are implemented to ensure that such convoys are not used for military purposes; that food assistance and logistical support are not used directly

February 23, 1988
Petitions
or indirectly for forced resettlement and villagization programs; and that food relief is not misappropriated for military forces. I think the Minister's statement would have been more useful and reassuring to Canadians if she had addressed some of these substantive issues.
With regard to the longer-term undertakings necessary to try to reverse the current cycle of famine and starvation in Ethiopia, we believe that we need to move away from the current large mega-project approach and focus more of our attention and money on smaller local aid programs geared to the population's needs and capabilities. This shift in emphasis has been under discussion for some time and 1 think it would be helpful, for both Ethiopia and other nations, if the Minister would finally announce the long promised new CIDA policy that so many have for so long been waiting. Unfortunately, this new policy appears to have become bogged down in Cabinet. I would like to take this opportunity to urge the Minister and her cabinet colleagues to finally outline to this House and to the country what new and hopefully decentralized CIDA policy they have in mind.
The current cycle of famine and starvation places great strains on the aid community's efforts to address the longer-term structural, agricultural and environmental problems at the heart of the problem in Ethiopia. I would caution, however, that this dilemma should not be looked at primarily as a question of the allocation of scarce financial resources. In this regard we believe that our longer-term projects should not be allowed to suffer in order to find the funds necessary to respond to current or future hunger crises. Instead, I would argue that each and every famine situation requires an infusion of significant new funds to meet the immediate threat so that many of our longer-term projects can proceed relatively unhindered. Otherwise we are merely engaged in band-aid solutions that will ultimately do little to alleviate the suffering in Ethiopia.
[ Translation]
Finally, Mr. Speaker, I would like to talk about the problem of the Ethiopian government's population displacement program. Initially, the purpose of the program was to move residents of famine-stricken areas to the southern part of the country where the land is more fertile. However, the program has become very controversial. The Ethiopian government's approach is clumsy and dictatorial. Its intentions are far more political than humanitarian. It seems that residents of the North are being forced to move to more southerly regions which, unfortunately, are not ready to receive them.
Last week, as the Minister herself reported, there were rumours that the Ethiopian army had shot twenty people who refused to take part in the program. The Minister must try and find out whether these allegations are true.
It is also said that camps in the North, the same camps that are receiving supplies from international agencies, are being used by the Ethiopian government as transit centres for its massive displacement programs. With all these allegations, the
Canadian Government is in a very uncomfortable situation. Only two countries are helping to facilitate these moves, and Canada is one of them. With these persistent rumours, the question arises whether Canada should continue to help the Ethiopian government displace all these people.
Insofar as it concerns the Canadian Government sponsored resettlement programs in Ethiopia which are run by NGO's and not the Ethiopian Government, there seems to be evidence that the result has been an appreciable improvement in living conditions. However, other resettlement programs may not have been as beneficial.
In addition, irrespective of the relative benefit of any particular resettlement program, we cannot support the forced deportation of starving Ethiopians to resettlement areas, Canadian or otherwise. As such, I welcome the Minister's statement that any resettlement program must be strictly voluntary.
However, I must also point out that she has again failed to outline exactly what steps she plans to implement to ensure that resettlement to Canadian sponsored resettlement areas or any resettlement area is done on a purely voluntary basis. Without such a clear outline of practices, guidelines and verification procedures, I fear the Minister's statement may in fact turn out to be more rhetorical than real. Once again, the Minister should have been more forthcoming on specifics.
I want to join with my Liberal colleague in recognizing the fact that it is the war, insurrection, or revolution in Ethiopia that has caused much of the difficulty we face in ensuring that aid is properly distributed in that country. I join with him, as I am sure will others in the House, in asking the Government to pursue whatever means and agencies it can find, with other nations through the UN or elsewhere, to ensure that peace is brought to Ethiopia soon as a result of international cooperation in that regard.


PETITIONS
Mr. Geoff Wilson (Swift Current-Maple Creek):: Mr. Speaker, I have the honour and duty to present two petitions, one from a number of residents of Frontier, Saskatchewan, and the second from residents of the Piapot and Maple Creek districts in Saskatchewan. Both petitions concern the matter of five-year block averaging for farmers.
The petitioners note that the Minister of Finance (Mr. Wilson) in December, 1987, indicated his intention to eliminate block averaging. The petitioners humbly pray and call upon Parliament to take the necessary steps to retain block
February 23, 1988

averaging for farmers as recommended by the Standing Committee on Finance and Economic Affairs in its report on the White Paper on tax reform, stage one.


Mr. Ernie Epp (Thunder Bay-Nipigon):: Mr. Speaker, I have petitions from residents of the City of Ottawa who note that the Conservative Government had no mandate from the Canadian people to conclude a free trade agreement with the United States. The Prime Minister (Mr. Mulroney) had actually promised in the course of bilateral trade negotiations that Canadian sovereignty would not be compromised.
Whereas the trade agreement negotiated by the Mulroney Government threatens the very fabric of Canadian political and economic sovereignty by removing the power of the Canadian Government to control foreign ownership, to develop Canadian energy resources in the best interest of Canadians, and to equalize opportunities amongst the regions; and that the proposed trade agreement would deny Canada the policy freedom to determine its own economic future-


Mr. Friesen:: Mr. Speaker, I rise on a point of order. Is it now permissible for Members to give speeches when submitting their petitions?


The Acting Speaker (Mr. Paproski):: The Hon. Member for Thunder Bay-Nipigon (Mr. Epp) will complete his petition, please.


Abram Ernest Epp: I appreciate that the presentation of petitions should be fairly brief. I am trying to do that.
Since the agreement would deny Canada the policy freedom to determine its own economic future and undermine our ability to build a society distinct from that of the United States, these petitioners call upon the House of Commons to dissolve and allow the people of Canada the opportunity to accept or reject this trade agreement in a general election.


Mr. John Parry (Kenora-Rainy River):: Mr. Speaker, I have the privilege and the responsibility to present a petition, duly certified as conforming to Standing Order 106, signed by approximately 140 residents mainly of Fort Frances, Ontario. 1 am sure this will be the first of many such petitions.
These petitioners humbly pray and call upon Parliament to redress the flagrant inequities that have been created between residents of different northern isolated communities by the introduction of the northern residents tax allowance whereby some communities are designated and residents receive tax breaks of up to $2,500 a year, while neighbouring communities, sometimes within a kilometre, are not designated. Of course this leads to significant inequities and grave economic distortions.
The Budget-Mr. Boudria PROHIBITION REGARDING KNIVES


Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, 1 have the honour to present several petitions from a number of citizens in Vancouver and the Lower Mainland. They state that the incidents of crimes including murder, robbery and sexual assault with knives is on the increase in all major cities across Canada. The federal Criminal Code allows citizens to carry knives for self defence, which often results in altercations where self defence is claimed.
The petitioners call upon Parliament to amend the federal Criminal Code to prohibit the carrying of knives by citizens in public places. The only exceptions would be those where a knife was an integral part of legitimate work or is being carried for religious reasons, such as with the Sikh religion.


Howard Douglas McCurdy: Mr. Speaker, I have the honour and duty to present a number of petitions from electors in the City of Windsor, the presentation of which I will make as brief as possible, commensurate with saving embarrassment to the Government concerning the signatories' plea that this Parliament dissolve immediately to permit an election on the issue of free trade.


QUESTIONS ON THE ORDER PAPER
Mr. Roger Clinch (Parliamentary Secretary to Minister of Communications):: Mr. Speaker, 1 ask that all questions on the Order Paper be allowed to stand.


The Acting Speaker (Mr. Paproski):: Shall all questions stand?


Some Hon. Members:: Agreed.


The Acting Speaker (Mr. Paproski):: I wish to inform the House that, because of ministerial statements, Government Orders will be extended by 60 minutes, beginning at one o'clock.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Monday, February 22, consideration of the motion of Mr. Wilson (Etobicoke Centre):
That this House approves in general the budgetary policy of the Government.
And on the amendment of Mr. Garneau:
[Stage Direction]
February 23, 1988
The Budget-Mr. Boudria
That the motion be amended by deleting all of the words after the word "That" and substituting the following therefor:
"This House regrets that the Budget
1.	Failed to redress the inequities of the tax system created by Government policies put forward during the last three and one-half years;
2.	failed to put into place a regional development policy to compensate for the high interest rate policy of the Government;
3.	failed to put forward a credible plan to deal with the national debt that does not unduly punish lower and middle income Canadians; and
4.	failed to specify a Canadian approach for dealing with the instabilities of the international monetary system."
Don Boudria: Mr. Speaker, it is a pleasure to participate in the Budget debate. We know that the Budget recently presented by the Government is unfair to many Canadians.

Mr. Speaker, when the Conservative Budget was brought down on February 10, it marked a day in our country's history when the Government abandoned any pretence of closing the growing gap between rich and poor in Canada. The Conservative Government is cheering so hard for the haves in our society that it is unable to hear the cries of those who have not been able to benefit from an improved economy. And, Mr. Speaker, one of the regions that has not benefited from this improved economy is the very riding I happen to represent.
Mr. Speaker, the day after the Budget, the Reeve of Cambridge Township in my riding, who happens to be Chairman of the ITAC (Industry, Tourism, Agriculture and Commerce) Committee of the United Counties of Prescott and Russell, issued a press release containing his views on the Budget. Mr. Speaker, 1 shall, if I may, read the very brief contents of this press release which indicates how fed up the people of Glengarry-Prescott-Russell are with this Conservative Government, and I quote:
This morning, Denis J.A. Pommainville, Chairman of the ITAC (Industry, Tourism, Agriculture and Commerce) Committee of the United Counties of Prescott and Russell and Reeve of Cambridge Township, gave his views on the Wilson Budget brought down on February 10, 1988, in the House of Commons.
First of all, he regretted that the initial economic impact of the so-called Free Trade Agreement with the United States was mainly negative for rural regions like the one he represented. In fact, the one cent per litre increase in the tax on gas was a tremendous setback for sparsely populated regions, especially those without public transit. Once again, the 12.5 per cent who are unemployed in the area (more than twice the average rate for Ontario) will be handicapped in seeking re-training and opportunities to go back to work, now that owning a car is becoming increasingly expensive.
"Nevertheless, we are delighted that the Mulroney Government has shown it is prepared to increase the private sector's responsibility for economic renewal-


The Acting Speaker (Mr. Paproski):: Order, please. I must bring to the attention of the Hon. Member that we do not mention the "Broadbent Government", the "Turner Government", or the "Mulroney Government" in debate in the
House. Hon. Members should refer to an "NDP Government", a "Liberal Government", or a "Conservative Government". The Speaker has brought this matter to the attention of the House on a number of occasions. 1 hope that the Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria) who has now been in the House for three years, will comply with the Speaker's ruling.


Don Boudria: Mr. Speaker, I accept your ruling and I thank you. 1 thought that it was accepted that when reading a quote from someone else the name of a Member could be mentioned. However, I will not continue to do so.

I continue:
-We are also encouraged by the sustained tax policy efforts of the Government to reduce the Federal deficit or at least to bring it down to more controlable levels.
Mr. Speaker, 1 quote again from the press release issued by the Chairman of my riding's ITAC Committee.
Mr. Pommainville continued to warn the Federal Government against an apparent desire not to encourage regional development. At a time when it is rumoured that the trade deal with the United States will gradually prevent Canada from favouring distant or disadvantaged areas, something it has always been forced to do especially because of our geographic and climatic conditions, it is high time for the Government to make major efforts to provide ail Canadians with equal opportunities to benefit from the possible economic impact of these new markets. On behalf of the ITAC Committee and on behalf of the Joint Counties of Prescott and Russell, Mr. Pommainville deplored that nothing apparently has been done to extend such programs as the IRDP (Industrial and Regional Development Program) or at least to replace them, the result of which would be to institutionalize unemployment and social assistance in my area and therefore freeze in these economic replacement programs a significant part of the budget deficit; which would go against not only one, but two of the professed priorities of the Government itself, since any possible entrepreneur, without regional incentive, would surely establish his business in already existing regional municipalities.
Mr. Speaker, I have just read to you a statement prepared by the prefect of a major municipality in my riding and the ITAC Committee Chairman of the Joint Counties of Prescott and Russell. It is clear that the Chairman of the ITAC Committee is not at all happy with the Budget which the Minister of Finance tabled on February the 10th instant.

As you know, Mr. Speaker, and as I am sure many Members of the House know, Glengarry-Prescott-Russell is not a rich constituency. The western part of the constituency is made up mostly of civil servants. There are many farmers throughout the greater part of my constituency. TThere are small industrial towns in the eastern part of it as well. There are 25 municipalities and some 50 small towns.
The gas tax that was included in the Budget is most unfair to my rural constituents. They do not have a choice with respect to whether or not they should own an automobile. If one wants to work in a rural area then one has to find a means of getting to one's job. That means is usually an automobile. That automobile must have its tank filled with gas in order to run. People filling their tanks are now paying a higher level for
February 23, 1988

gas than they have ever paid. This is from a Government which promised prior to the 1984 election not to increase taxes. Since the Government was sworn into office gas taxes have increased 5 cents per litre. That comes out to 23 cents per gallon.
The same Conservative Party under a different leader and under a different Finance Minister was turfed out of office in 1979 for attempting to raise gasoline prices by 18 cents per gallon. Just imagine what taxpayers would do to the Tories which presently form the Government if they had a chance to vote. They will soon, and they will turf them out of office.
1 wish to talk about one other tax which is equally unfair to my constituency. It is the 10 per cent tax on long distance phone calls. If one lives in Plantagenet in my riding and wants to phone Ottawa or even Rockland to talk to the doctor, the medical clinic or to gain any type of assistance at all, one has to pay a long distance telephone charge. My constituents even have to pay long distance phone charges for contacting the local welfare office, if Hon. Members can imagine that. If that was not bad enough they now must pay a 10 per cent tax on the long distance phone calls they make. That is taxing free speech, that is what it is.
My constituents are not pleased with this tax. It is an unprecedented tax. No Government in the past has ever taxed long distance phone calls, no Government of either political party, be it Liberal or Conservative. Those Governments recognized that rural Canadians would be unfairly affected by such a tax. In my constituency it is not the basic rate of the telephone that is the problem, that $6, $7 or $8 per month in rural areas. The problem is with the long distance phone charges since almost every phone call one makes is a long distance phone call.	[DOT]
The Government said in its tax reform proposal which it brought in just before Christmas, something that was really another Budget in disguise, that it would tax long distance phone calls. "Not to worry," said the Minister of Finance (Mr. Wilson), "we will not tax the basic rate". Who cares? For my constituents the problem is not with the basic rate, it is with the long distance phone charges which are too expensive already.
Some communities in my riding which are just on the outskirts of Ottawa have to pay long distance charges in order to phone the city. That is another matter and it is unfair. It is unfair for the people of Plantagenet, the people of Casselman, Clarence Creek and Bourget to pay long distance charges at all to phone Ottawa. To add insult to injury they now have to pay a tax on those long distance phone calls. Many of my constituents have corresponded with me about the unfairness of that tax and its impact on rural Canadians and small businesses.

Mr. Speaker, when the Prime Minister praised the so-called Free Trade Agreement, his own trade agreement, he told us
The Budget-Mr. Boudria
and all Canadians willing to listen to him, and their number is getting increasingly smaller, that one of the great benefits of the Free Trade Agreement would be that the customs tariffs would go down and that Canadian consumers would be able to purchase products made in the United States at a lower price than those made in Canada. According to the Prime Minister, this was one of the major benefits of his trade agreement.
Yet, Mr. Speaker, we have learned differently in the recent Budget. The Budget or budgetary papers show that the bilateral agreement between Canada and the United States will result in a loss of revenue of about $460 million. In other words, because of the lower tariffs, the Government will lose $460 million in revenue.
At first glance, this seems like a bargain as Canadians will pay $460 million less. However, the facts disprove this. The Government has increased the tax on gasoline to collect an additional $300 million in revenue, which amount approaches that of the revenues lost because of the lower tariffs under the trade agreement.
Mr. Speaker, in other words, all Canadians, including the constituents of Glengarry-Prescott-Russell, especially those in rural areas, will have to pay 1 cent a litre more in taxes on gasoline this year to pay for the Free Trade Agreement of the Prime Minister.
Let it never be said that this trade agreement is free trade. Every time we fill up the gas tanks of our automobiles we will be paying one cent more per litre in taxes to fill government coffers emptied by the tariff reductions under the free trade agreement. When the Prime Minister (Mr. Mulroney) said Canadians would benefit from lower tariffs, he did not quite tell the whole story. That is not surprising because it has happened before. However, this time Canadians are going to be mad because every time they fill their tanks they will be paying more, not just for services but because the Prime Minister gave them erroneous information. He told them they were going to be getting a deal, that goods would be cheaper, but all the Government is doing is transferring the burden to rural Canadians and those who drive automobiles.

Mr. Speaker, Canadian taxpayers have certainly been treated unfairly by this Budget and by the previous budgets of the Conservative Government. For instance, since the coming to power of the Conservatives, taxes paid by Canadians have increased by 68 per cent.
Can you imagine! In 1988, with this new Budget, Canadians will pay 68 per cent more taxes than the day before this Government took its oath of office in 1984. If the taxes were applied equally to everyone, it would perhaps not be quite so bad. However, Mr. Speaker, the taxes of large companies have

February 23, 1988
The Budget-Mrs. McDougall
increased only by 28 per cent, or half the increase which applies to individual Canadians.

A one-earner family of four with an income of $32,00 a year is now paying $1,200 more in taxes. That family, not having had a salary increase at all for the last four years, actually end up with $1,200 less than before the Government came into office.

Mr. Speaker, the Conservative Budget of February 10 is a plan designed to create two Canadas and two solitudes: A nation of privileged Canadians who enjoy prosperity while the poorest and neediest will suffer even more.
My colleagues in the Liberal Party and myself believe that Canada is a generous nation and that all Canadians will reject the cynical budgetary plan of the Minister of Finance and the Conservative Party.


Hon. Barbara McDougall (Minister of State (Privatization and Regulatory Affairs)):: Mr. Speaker, let me begin by quoting from our Government's agenda for economic renewal which all Hon. Members will recall was presented to the House November 8, 1984:
We have set four challenges:
first, to put our own fiscal house in order so that we can limit, and ultimately reverse, the massive build-up in public debt and the damaging impact this has on confidence and growth;
second, to redefine the role of government so that it provides a better framework for growth and job creation and less of an obstacle to change and innovation;
third, to foster higher investment, greater innovation, increased international competitiveness and a positive climate for the birth and growth of new enterprise; and
fourth, to bring about these changes in a way that is fair, open and consistent with the basic sense of compassion, tolerance and justice that is characteristic of Canadian society.
Those were our four challenges after 25 years of Liberal profligacy, spending everything they could lay their hands on. Let us look at how we lived up to these commitments.

Our first commitment was to set our financial house in order. By 1985 the federal deficit and the national debt were practically out of control, and everyone suffers when a government loses control over its finances. It invariably leads to higher rates for mortgages as well as for corporate and consumer loans, economic faith vanishes, growth stops, and jobs get ever scarcer. That is what we inherited from the previous Liberal administration.
We believe that Canadians want their children and grandchildren to look forward to a promising and challenging future instead of saddling them with crushing debts and lost hopes.
The only way to prepare for this kind of future is to devise a medium-term financial plan geared to a steady deficit decline, and to stick to that plan.

That is exactly what we have done through a series of actions. Our first priority had to be to get government spending under control. In the four years prior to our coming into office, spending on programs had increased at an average annual rate of 14 per cent. Fourteen per cent! That is way ahead of the rate of inflation, enough to double spending in about five years. Since 1984 we have cut the average annual rate of increase in Government spending to just 3.5 per cent, less than the rate of inflation. We achieved this record because we put in place a new and disciplined approach to the management of Government and its finances.
We said that control of expenditures would be the main source of deficit reduction, and it has been. For the current fiscal year we said that we would cut the deficit to $29.3 billion, and the Minister of Finance (Mr. Wilson) has said that he will meet that target. Our Government has met every deficit reduction target that it has set. I need not remind Hon. Members of the very poor planning of previous Governments that never could meet a target.
We said that we would respond to the priorities and the real needs of Canadians in a fiscally responsible way, and we have done so. When we came into office there is no question that sound financial management was essential. It is essential now, and it will be essential in the future. It is a fact of life. It is a fiscal principle that we will adhere to.
First, we are reducing the growth rate of the national debt to no more than that of the economy by 1990-91, that massive debt that was accumulated under the Liberals. Second, we are achieving steady year-to-year declines in the deficit. The reduction projected for 1988-89 will be the first time in the post-war period that the deficit has declined four years in a row. Third, we are ensuring substantial reductions in the Government's financial requirements. Fourth, we are achieving the greater part of this progress through expenditure restraint and disciplined management. Our fiscal principles and structural improvements will ensure that we stay on our fiscal course.
Our next commitment on the agenda was to change the role of Government intervention in order to foster a climate for job creation. We recognize that the driving force behind productive growth, new jobs, is a dynamic private sector. In order to facilitate this growth our Government has undertaken many measures that have resulted in record job increases.

We have deregulated the energy and transport sectors. We have opened the financial markets to world-wide opportunities and emphasized even stronger competition in financial services. We have set up Investment Canada with a view to
February 23, 1988

promoting and welcoming foreign investment in this country, the kind of investment which create jobs for Canadians.

For the corporate sector many special tax breaks thoughtlessly introduced previously are being eliminated or reduced, and tax rates are being lowered. That means our corporate tax system for small businesses and others will be more competitive with those in other countries. But there is, of course, more to be done.
We are going to replace an archaic federal sales tax system with a multi-stage system which will be effective in supporting growth and job creation, and it will be fair. We have been working with the provinces and others to develop the most effective means of implementing this new system, particularly the opportunity to have an integrated national sales tax. So far progress with the provinces has been good, but we do have more work to do.
Let us look at where all this has led-massive job creation. Let us look at the record. First, contrary to all the constant whining from the other side of the Flouse, employment under this Government has risen in every single province in Canada. That translates into 1.156 million new jobs; people who are working today who were not working in September, 1984. Those are not only temporary or part-time jobs, as was the case with the previous Government. Eighty-five per cent of these new jobs are full time. The Liberals created only 87,000 full-time jobs in 55 months. Our Government has seen to the creation of 978,000 full-time jobs in only 40 months.
In my home town, if I may be allowed to discuss the City of Toronto and the good people of St. Paul's, unemployment is only 4.4 per cent and 181,000 new jobs have been created since 1984.


Margaret Anne Mitchell: It is 27.5 in Vancouver East.


Barbara Jean McDougall: Employment has increased in every province in Canada. Those people are now working because of the new climate that our Government has created in this country. We do not create the jobs. We create the climate, and the private sector, the people and businesses of Canada-


Margaret Anne Mitchell: Regional blindness.


Barbara Jean McDougall: -they are the ones who create the jobs, as they have done in every region of Canada since September, 1984.
I am particularly pleased because half of the jobs created have gone to women. There have been 611,000 new jobs, and I am sure that the Hon. Members opposite will be very pleased with that. Do I hear applause?


Margaret Anne Mitchell: We know what kind of jobs they are.


Barbara Jean McDougall: I am about to explain that to the Hon. Member, Mr. Speaker, if she is prepared to listen.
The Budget-Mrs. McDougall
A large portion of those jobs, 50 per cent, have been in managerial, professional, and administrative positions. I do not need to remind the women of Canada that their unemployment rate rose by 3.4 per cent under the previous Liberal Government, and most of those jobs were part-time. This is a solid record of progress. It illustrates how our policies and our approaches work.
Our third commitment on the agenda for economic renewal, Members may recall, was to create policies to increase our international competitiveness and innovation. That we have done in three ways. Earlier I mentioned Investment Canada, and that has resulted in new job opportunities for Canadians. It has been a part of the success that we have had since taking office. We are also moving on two other fronts of enormous significance to Canadians, first, the multilateral trade negotiations under the General Agreement on Tariffs and Trade and, of course, the free trade agreement with the United States.
Our Government recognizes the dangers in protectionism in other countries, and we are pushing hard for reforms to reduce protectionist policies in those trading nations involved in the GATT. It is important for our Government to continue to work hard to this end, but it is also important to remember that there are more than 90 nations involved in this process. It takes a great deal of time, a great deal of discipline, and sometimes some compromise among such a large number of nations. That is why we decided to pursue an agreement with our largest trading partner, the United States. The free trade agreement is a major building block in the Government's strategy to strengthen Canada's competitive position, not only with the United States but in the world, and to enhance the prosperity of our people.
Canadian producers will now have access to a market of 270 million people. Canadian consumers will benefit from more competitive prices on a wider variety of goods, and both countries will be able to appeal unfair trade practices to an appeal panel. Those are important breakthroughs in the world's largest trading relationship, and breakthroughs that are being watched with great interest by other trading partners in the world. They also mean greater opportunity and prosperity for Canadians.
There are many cases. There was one profiled yesterday in a Toronto newspaper, Mr. Speaker, the The Globe and Mail, where a manufacturing company in Guelph, Ontario will spend $9 million on capital expenditures next year to gear up for free trade. The company stated that the $9 million would not have been spent without this agreement. These are real opportunities, real growth, real industrial expansion, and this will lead to real jobs, despite all the noise and rhetoric from the other side.
Ever since October I have been travelling across Canada talking to many Canadians about free trade. I have been struck by the amount of support for the agreement from two particular groups, the first being Canadian entrepreneurs.

February 23, 1988
The Budget-Mr. E. Epp
They are very anxious for this agreement. When I asked a friend why they were not out making speeches on behalf of themselves and their companies, he said that they were not doing it because they were too busy getting ready. The second group with which I am particularly impressed is our young people-the future of our country. They are embracing this arrangement with enthusiasm. They are enthusiastic about the opportunity to compete and to have a prosperous future. They want this agreement.
Finally, our fourth commitment on the agenda for economic renewal is to bring about these changes in a way that is fair, open, and consistent with the characteristics of our Canadian society. By creating more jobs, more opportunities, and better incomes, the Government enhances its ability to do more for Canadians and to have Canadians do more for themselves, and we have done more.

1 am extremely proud of the national day care strategy recently unveiled by our Government, a series of initiatives through which $5.4 billion will be channelled towards our most precious resource, our children. The approach we took gives every consideration to the various options facing families, according to their own preferences and circumstances. By means of tax credits and other incentives we will help parents who want to avail themselves of outside day care services or who would rather provide such services at home.
We have also set up a $100 million fund for special initiatives which will enable us to establish new programs for children in particular situations, including smaller localities and rural areas. We will soon release more details concerning this program.

We have expanded the spousal allowance to widowed persons between the ages of 60 and 64 years. We have improved the Canada Pension Plan and veterans' pensions, and we have provided assistance to the disabled.
In response to the current situation facing agricultural producers, federal government expenditures in agriculture will increase from $1.2 billion last year to over $4 billion this year.
The Government has also taken far-reaching measures to reform the federal tax system, a system which had reached a dreadful state of affairs when we took over. We are making the tax system fairer for individual Canadians. We are making it more effective in supporting job creation and growth. We are creating a system which helps our small businesses and industries to compete in the world. For individuals we are replacing 10 tax brackets with three. To make the system fairer we are converting personal exemptions and many deductions to tax credits, and we are reducing and eliminating many special tax breaks.
The results are substantial. More than eight out of ten households will see their personal income taxes reduced. Some
850,000	lower income individuals will have their income tax reduced to zero. Almost nine out of ten Canadians aged 65 years and over will have income tax reductions. The vast majority of families with children will pay noticeably less personal income tax.
We will continue the course set out three and a half years ago, because we know that it is right and Canadians know that it is working. As the Minister of Finance stated in The Budget Speech, "there are no short cuts to achieving Canada's economic potential".
We are heading into a new century and, as we approach its last decade, Canadians-men, women, and young people-are ready and confident. Every time a key is turned in the door of a new business, a new home, or a new factory, that confidence is shown. We are seeing more of that every day under this Government. Every time a kid passes an exam, a young couple gets married, or a family chooses Canada as their new home, it is an expression of that confidence. As a country we do not take a back seat to anybody. Government policies must reflect the confidence which Canadians have in themselves and the pride they have in our country.
These initiatives and others like them are why Canadians elected a Progressive Conservative Government in 1984. It is the reason that I am very proud to be a member of the Government. It is the record on which Canadians will vote in the next election when they re-elect a Progressive Conservative Government.


Some Hon. Members:: Hear, hear!


Abram Ernest Epp: Mr. Speaker, I appreciate the opportunity to join this afternoon in the debate on the very thin budget speech which the Minister of Finance (Mr. Wilson) read on the afternoon of February 10. It was a speech full of election rhetoric and the kind of complacency which the Minister of State for Privatization and Regulatory Affairs (Mrs. McDougall) has just served up in her speech. It is the kind of pleasure people feel when they represent St. Paul's or other ridings in the metropolitan area, when they look around and see unemployment rates down to 4 per cent, when they think that all is well with the country and that their program is succeeding. They think that they simply have to stay the course and the Canadian people will re-elect them to serve up more of the high unemployment which so many regions of Canada still know, the kind of taxation which has been dumped on average and low-income Canadians over the past three years, and the kind of taxation which allows the Government to talk now about reduction of taxes for this same mass of Canadians.
Of course one can reduce taxes somewhat if one is loading thousands of dollars more on the average family. Of course one could achieve some reduction after having done so, but that is hardly real cause for complacency.
February 23, 1988

Government Members will regret the fact that election after election they served up that kind of inequity and that they ignored so much of the country in the way they have. We have commentators wondering these days whether they will make a serious try to win seats in the Metropolitan Toronto area. If they cannot win them there, they are certainly not going to win them in other parts of the country where they have done nasty things to people, ignored the regions, and neglected again in this Budget to recognize what the country needs, to take up the challenge, and to provide the kind of leadership the country wants.
What we have as a reality in much of the country is unemployment rates which are still, in eight of the ten provinces, very close to the levels they reached in the recession or the interest rate depression of the early eighties, from 1981 to 1983. There is no reason for complacency.
They have failed to come to grips with these matters or to take action for regions of the country which so desperately need it, other than press releases and the flackery of an Atlantic Opportunities Agency that is still not funded, a western development organization that is still more structure than activity, and a northern Ontario initiative that is still busy developing application forms.
This hiving off of responsibilities for the regions, which has marked the Government's policy over the last couple of years, deserves very critical and careful examination. I suspect that what it actually reveals is the constraint or the strait-jacket that the Government is taking on even before the free trade agreement has been passed by the U.S. Congress or adopted by the Canadian Parliament. It is a consequence of this action of tying Canada to the United States in so many ways.
I make that argument because we realize very well that the attack of the Americans-the American people, American industries, politicians, or U.S. administration-to facilitate the process carried out on Canadian industries was very often focused on development programs or regional development initiatives that encouraged those industries. The Government has accepted, in its free trade agreement, and not having had any success in that area, a five-year to seven-year process of negotiating its way through these matters. What the Government is desperately afraid of is that any kind of initiatives that it takes on these matters in the regions will be attacked by the American partner in this trade deal.
[DOT] (BOO)
Recognizing that, what the Government has done is to put the responsibility on agencies, leaving them some money which will be in their control, not really in Ottawa's control; $3 billion has been pulled out of regional development reducing the amount that is actually spent in the hope that this will get us past the American attacks on government programs in Canada. The end result is that the Government is left hoping that the free market, to which it pays its respects time after time, the lower interest rates, for which it has precious little
The Budget-Mr. E. Epp
responsibility, will continue to allow the creation of jobs that has taken place over the last three years. Unfortunately that situation has not occurred in much of the country. In northern Ontario where my constituents live and in other regions, unemployment rates still remain very very high.
If we have a government that continues on the course which this Government has taken in the trade deal negotiation with the U.S., I do not see any way out. It only underscores our criticism of the deal, our opposition to it, and our need to find a different framework. We need desperately to come up with an economic policy that will allow us to achieve full employment in the regions of Canada and to move the country toward the balanced budget that all of us would like to see. If we are going to do that, we will have to move away from this preoccupation the Government has with deficit reduction; first and foremost with the loading on of higher taxes in a completely unbalanced way, and with the focus on the trade deal that I have already pointed out.
We might note that in all the advocacy for the trade deal which the Conservatives have put forward, the actual number of jobs we are supposed to get out of it over half a decade-or perhaps it is over 10 years-as a net result, is a very small number. One hundred and twenty thousand jobs is the net gain which is less than half of what lower interest rates allowed Canadians to achieve year by year since 1983. Fully realizing, even if the Minister of State for Privatization and Regulatory Affairs does not want to admit it in public, that there will be massive dislocations in the Canadian economy and thousands of jobs will be lost in the various industries with only the hope that the theoretical results to flow from freer trade will, in fact, bring us more employment, we are faced with the possibility that even the hope for 120,000 jobs as the net gain is a doubtful projection.
If one looks at all of that and recognizes the dislocations that will occur, the limitations the Government has accepted in the free trade agreement in dealing with those things, I can understand why the Minister does not want to admit that the Government should take action. The result for thousands of Canadians will be even more of the distress we have already known.
What should be have in these circumstances? I suggest we should be looking to opportunities within Canada as much as outside. Certainly Canadians want to trade. New Democrats are supportive of trade with the United States in our various industries, as is anyone, from the raw materials to the achievements of the automotive industry and high technology. But opportunities within Canada deserve to be emphasized, and challenges within this country as well. We want to look toward achieving full employment in every region and not be content with it in southern Ontario, particularly in the golden horseshoe and around metro Toronto.
We should be looking at a policy of fair taxation in which the burden of expenditure by the federal Government and other Governments is fairly distributed. Those who have the

February 23, 1988
The Budget-Mr. E. Epp
wealth and the income should shoulder that burden much more fairly than is now the case. Particularly looking at fairness, we should be looking to a rebalancing from individuals to corporations so that all recipients of income-and corporations so often receive income but do not distribute it- share in tax paying far more than is now the case. All should share in carrying the burden, meeting the challenges and seeing the promise of Canada achieved.
In this policy, we should be recognizing the importance of lower interest rates and pressing the Governor of the Bank of Canada to get those interest rates down. There are only the first suspicions of this developing these days, but the Bank of Canada is maintaining a policy of fighting inflation. The governor actually suggests reducing inflation to zero which strikes me quite incredible. A dynamic private sector uses price increases as one of its responses to the market. Achieving zero inflation will have incredible costs for Canadians, the kinds of costs which the United States federal reserve system imposed on much of the world in the early 1980s. If the Governor of the Bank of Canada is going to maintain that kind of course he will ruin the country.
Why would the Minister of Finance and the Government tolerate that? Are they again, because of the free trade agreement, encouraging the governor to keep interest rates high in order to have the value of the dollar appreciate? The dollar has increased in value by pretty close to 10 per cent in the last little while against the U.S. dollar. That increase of 10 per cent strikes Americans, who are competing with Canadian producers in their market, as a real advantage. Canadian products become more expensive. Those who saw the lower valued dollar at 72 cents, or whatever value it was in the last little while, saw that as a Canadian Government subsidy and could very well think that the Canadian Government, Mr. Crowe at the Bank of Canada and the Minister of Finance, are involved in raising the value of the dollar through higher interest rates to reduce one more subsidy, so-called, to Canadian industry. These are the kinds of charges by the United States that should be forthrightly met rather than yielded to.
It is all the more important to deal with this and to get those interest rates down when we recognize what lower interest rates have made possible in the last several years. As I suggested before, we have seen something like 300,000 jobs created by Canadians year by year for the last several years. The main reason is that interest rates have been at a reasonable level. The American authorities recognized that what they did in the early 1980s could destroy the world, bringing about a global depression, and they have backed off.
It has been possible to carry on housing construction again. Industries have been prepared to invest. We have seen new plants established and so on. All of these things have made a
300,000	person year increase in employment in Canada. It is that kind of possibility within this country which within one year gives us more jobs than the trade deal the Government
holds out promises over a decade. That indicates the importance of lower interest rates and other domestic policies to achieve full employment.
The fact that we still have about one million Canadians unemployed, and there are still about as many people unemployed now as have found jobs over the last three or four years, is an indication of the challenge we find in the various regions of Canada. If we had the interest rate reductions that we should have, one or two percentage points now, to bring interest rates closer to American rates, such a reduction would have a significant impact. It would have an impact first on the Estimates of the Government, which were tabled this morning, and on the finances of the country. A 1 per cent drop in interest rates on government financial obligations would save the Minister of Finance over $1.3 billion in a year. That is certainly a saving to make when there are so many needs, so many calls on the Government, in various regions of the country. It would also bring the cost of establishing businesses in Canada closer to the American level. Interest rates that are 30 per cent to 40 per cent above American interest rates clearly represent a penalty on Canadian industry and it is the very opposite of a subsidy. This is an additional cost which Canadian industry faces when it wants to compete with American industry. There is a second very sound reason for reducing the interest rate.
Of course, over the last three years, Canadian consumers have played an important part in the return to some prosperity in certain parts of the country and in some reduction in the unemployment rate in various places including my community where housing construction has been an important factor. The fact that consumers have been able to buy houses again is surely a factor of lower interest rates. I would suggest, particularly after the crash of last October and the impact that has had on the North American economy and the U.S. economy particularly, an impact that is being felt in Canada bit by bit, it would be very important to have a reduction in interest rates.
I think these observations suggest to us that in the fiscal and monetary policies the Government is following in its Budget, the Minister of Finance failed to come to grips with the challenge. He is prepared to let the resource hinterland of the United States, which a continental energy deal would suggest, be a basic feature of his view of Canada. Of course, he thinks there will be more industrial opportunities thanks to the trade agreement, but no one can be really sure of that. There are many questions about that.
The possibility of a Canada that is well developed, prosperous and balanced, a country in which taxation is fair so that lower and middle-income Canadians do not bear the mammoth burden they do now, is a possibility toward which changes should be made. The Minister of Finance has failed to do that. He has failed to recognize the importance of supporting prosperity across the country, of building up all the regions.
February 23, 1988

Fie has failed to realize the importance of initiatives by the federal Government that would assist the movement toward full employment in northern Ontario, across the West, in Quebec and in Atlantic Canada.
I think of our infrastructure needs. One such need in particular has become very important for us in northern Ontario, and that is improvements to the Trans-Canada Highway which is now a quarter century old. Quite clearly, it is inadequate to the challenge, particularly in the context of trucking deregulation. The Canadian Government is supporting highway construction in every Province of Canada but Ontario. It is supporting construction on the Yellowhead Highway in the West, of all things, not even the Trans-Canada. It is under pressure these days in New Brunswick and in Ontario to take up the challenge of improving significant sections of the Trans-Canada Highway. We in northern Ontario have a quarter of the total kilometres of the Trans-Canada Highway.
A Government that is prepared to look to the market and thinks that agreements with the United States will do it, a Government that is prepared to be complacent about the rest, given the prosperity in the Metro-Toronto area, is a Government that ignores these particular challenges. It ignores the needs of the regions which, if met, could produce better employment.
I can think of other needs for municipal infrastructure. More particularly, in northern Ontario, some of the new Indian reserves should be developed, reserves on which the Government is refusing to spend any money. These are needs that would support the prosperity of the communities and move us closer to full employment. These are real Canadian needs. Meeting them would support the good health and the safety of the Canadian people. These are actions the Government should be taking. However, there has been no such action.
There has been an obsession with the market and with the U.S. tie-in. This obsession is likely to bring us incredible uncertainties over the next years, incredible dislocations and losses of jobs. Maybe there will be some net gains at the end, but there is no assurance of that. The Government has failed to recognize the challenges which face us. It has failed to take up those challenges. That is why in the regions of the country, province after province, this Government will be defeated in the next election so that other people who recognize the need to get on with the job will actually do it.


Mr. Ferland:: Mr. Speaker, I have a question for my socialist colleague from Thunder Bay-Nipigon (Mr. Epp). He says the Budget is unrealistic and does not reflect the real situation in this country. However, in his speech he failed to mention how his party, if it had to make the decisions and prepare a budget, would improve the lives of Canadians. I could find nothing in his speech that gave any indication of the approach his party would take. He says he would reduce unemployment,
The Budget-Mr. E. Epp
but he fails to say how. He says he would increase services to Canadians, but he doesn't say how. He says he would reduce taxes, but he doesn't say how. I would appreciate it if the Hon. Member, in the few minutes he has left, would consider this essential part he left out of his speech and inform Canadians what he would do if he were Minister of Finance and what kind of action he would take.


Abram Ernest Epp: Mr. Speaker, I thank my colleague for the question. In 20 minutes one can do so little. 1 think 1 did more than he has suggested, but I appreciate an opportunity to expand somewhat.
I was suggesting that we want to achieve a full-employment and a balanced-Budget Canada, a Canada in which we would be able to begin paying off some of the national debt rather than being obsessed with deficit reduction. We want to do that through a number of different actions. We want to reduce interest rates in order to encourage economic activity and reduce the cost of Government. I think I said enough about that so I will not expand on it.
We want to have a fair tax system, a tax system in which some of the burden is taken off individual Canadians. Once upon a time, within our lifetimes, as a matter of fact, the tax balance between individuals and corporations was more or less fifty-fifty. That was back in the 1950s. But over the years, particularly through the 1970s when the Liberals were in charge and the present Right Hon. Leader of the Opposition (Mr. Turner) was Minister of Finance, things began to go badly awry. Corporations ceased to pay as much as individuals. By now, of course, individuals pay four and four and a half times as much.
I would suggest that real tax reform would get things back into balance and would reduce taxes for individual Canadians. That real tax reform supports economic activity and allows corporations to achieve profits and pay the taxes, something which they might not like initially but which would be quite bearable, given the prosperity that would follow from tax reduction. After lower interest rates, that could be the most dynamic and explosive force the Canadian economy could achieve.
When we move toward full employment, we should get budgets that are closer to balanced. When the Auditor General's Office tells us that if the Canadian economy currently were in full employment, the Budget would still be in the red by perhaps $8 billion, we can see a measure of how unbalanced and unfortunate the Canadian tax system actually is. We simply have to come to grips with bearing the load in a balanced way, not by dumping it on individual Canadians as this Government has done even more than the Liberals did before. We need to get this into balance. Having achieved that, we would then spend our money carefully in order to encourage the move toward full employment, whether it be spent on infrastructure improvements or on post-secondary education and health. Year after year, we have seen pressures to hold

February 23, 1988
The Budget-Mr. Ferland
back in those areas. After 10 to 15 years of inadequate funding in these areas, one wonders how many thousands of jobs could be created by doing these things properly.
These days, Ontario universities are very anxious because there is a 10 per cent increase in applications for next year. How can these applications be managed when the Canadian Government is not doing its share and the provincial Government is failing in the same way?
We have challenge after challenge to be met. As we do all of those things and also encourage trade within the country and realize the possibilities of energy goods across the country, rather than tying ourselves more and more firmly into the United States, I would suggest we could reach full employment, balance the Budget, and pay off the national debt instead of adding to it every year as Conservatives have been forced to do too. They have added $100 billion over their three years, plus, in power. That is hardly something to be very proud of for people who are obsessed with the national debt.


Marc Ferland: Mr. Speaker, 1 hope the Hon. Member for Thunder Bay-Nipigon (Mr. Epp) will stay around for a while, because we would like to explain some of the things he does not seem to have understood about public administration and the Government of this country.
Mr. Speaker, he started earlier by saying that it was a very thin Budget Speech, a Speech that lacked substance.
I can inform the Hon. Member that the Budget brought down by the Minister of Finance (Mr. Wilson) on February 10, 1988, continued the policies in the first Budget brought down in early 1985.
Mr. Speaker, perhaps the Hon. Member would like to recall the circumstances in which Canadians, in 1984, decided to elect a Progressive Conservative Government.
I remember what the people in the riding of Portneuf wanted in 1984. And I also remember the election platform we presented to Canadians and especially to the people in the riding of Portneuf.
Mr. Speaker, we all remember that before 1984, interest rates were very high, and the annual inflation rate was around 12 per cent. We had incredible chronic unemployment. Young Canadians could not look forward to starting a family like their parents did, because there just weren't any jobs. More plants were closing than new ones starting up.
Meanwhile, we would regularly see Liberal and NDP Members attending grand openings of nature paths and small parks they were setting up all over the place, all because of these people who were being given jobs under federal programs, the so-called "twenty-week" programs dreamt up by the Liberal Government.
My father used to say that when he was a young lad, they had Valcartier's 20 cents. Some Members may recall Valcar-tier's 20 cents from the Depression. People were given 20 cents a day plus a package of tobacco and cigarette paper, and that is how they managed to survive.
The Liberals invented the 20-week job. Obviously, the people who worked at these jobs had a much better chance of doing so if they had the right connections.
In any case, Mr. Speaker, in 1984 Canadians were fed up with this approach. They asked the Conservatives to do what was necessary to put the economy back on its feet and create a situation in Canada where Canadians would be able to participate in the development of their country.
Mr. Speaker, that is what we did, that is what the Minister of Finance has done, that is what the Prime Minister (Mr. Mulroney) did and that is what this Government has been able to do.
On February 10, the Minister of Finance may have brought down the least spectacular Budget this Parliament has seen in decades. We have not made any rash promises during the past four years, Mr. Speaker. Maybe not four, but almost four years. What we did was to put in place the mechanisms we promised, starting in September 1984.
Recently, I met people in my riding who asked me: "Mr. Ferland we have plans for a playground in our community. It would be good for the kids". I said: "Sure, but we don't have any money". They answered: "How come the federal Government doesn't have any money? You spend $100 billion annually. You must have $25,000 or $30,000 to help build a playground". But I said: "Let me tell you that our Government has reached the objective it set for itself in 1984, which was to revive the economy and renew the hopes and dreams of Canadians, something people had lost in 1984". So they said: "Now listen, we are developing this community and we need certain facilities". So 1 said: "Remember, in 1984 the Conservatives said: We have to make a choice between creating permanent jobs or building playgrounds. However, to create permanent jobs, first the economy has to be in good shape. To revive the economy, we have to deal with the deficit".
The former Minister of Finance, Mr. Lalonde, used to say that an annual deficit of $50 billion should be considered normal in Canada. I may remind you that the NDP never disagreed with this stand. In any case, you can put the Liberals and the New Democrats in a box, shake well, and one comes out green and the other comes out red. Philosophically, they are all the same.
So I told these people, Mr. Speaker: "We made a choice. We made cuts in the Government's discretionary spending, cuts totalling $4 billion the first year. The following year, in the second Budget, we cut $2 billion. Last year we cut $500 million. This year, we intend to cut $300 million in discretionary spending. Mr. Speaker, we have now cut a total of $6.8 billion in our Budgets, funds I am sure could have been used
February 23, 1988

to make our backbenchers, especially, look good in their ridings. Of course it is nice for a Member to be able to tell an association or a group in his community: "We are happy to give you this cheque to develop your project. It will help the community and put people to work for eight or ten weeks". However, that is not what we had in mind in 1984, as Members of this Government. In 1984. our objective was to create permanent jobs.
When we were elected, there was a whole series of job creation programs, a total of 24, Mr. Speaker. There were all kinds of programs, except programs that provided for permanent jobs. We did some housecleaning. We eliminated 18 programs and kept six. My constituents are particularly happy with one of those programs, the Job Development Program. This government took the initiative in working with the private sector, the municipalities as well as with non-profit-making organizations in order to create permanent jobs. And it has succeeded, Mr. Speaker. In my riding, hundreds of workers now have a permanent job thanks to this Canadian government program. And I can tell you that people thank me for that. Members do not get thanks very often, but when people have been unemployed for one or two years they do not mind thanking you for helping them find a job by creating a situation conducive to job creation.
Speaking of job creation, Mr. Speaker, before 1984 in my riding plants closing and job lay-offs were almost a regular occurence. But since 1984, Mr. Speaker, the trend was reversed. Although one may want to criticize the performance of the Conservative government, one cannot deny what has been achieved in my own riding and which is there for every one to see.
Since 1984, we have seen 36 expansion projects and the creation of new businesses with the assistance of the Federal Government. And in my riding it was the work of only one department, the Department of Regional Industrial Expansion. The Opposition criticizes the work done by that Department but I can tell you that people in my riding are totally satisfied with the job done and they just want that Department to put even more money for development in my constituency. But from 1984 up to now the Federal Government has invested $4,056 million, thus allowing the private sector to carry out projects to the tune of $16,240,000. That is a lot of money, Mr. Speaker! Thirty-six businesses expanded or were established, and I don't mention those which did not need the help of the Government of Canada because they had enough financial backing to go at it alone, and also because as a result of the economic climate created by the Government throughout the country they could do it by themselves. They were proud to say that they did it all by themselves and they said so to the reporters. But what they don't forget to mention is the fact that if we are able today to invest without anybody's help, it is because of the policies implemented by the Conservative
The Budget-Mr. Ferland
Government. But this is another objective, Mr. Speaker, that the people from Portneuf in my riding has asked us to reach.
The people were asking me to put pressure on my Government, on the Ministers to get action along those lines.
I think the Minister of Finance (Mr. Wilson), the Prime Minister (Mr. Mulroney) and the Governmeent delivered the goods and that we can be proud as Canadians to have such a good Government, managed by men and women who took over an administration which was really terrible and transformed it into an administration worthy of a country like Canada.
Considering how the New Democrats and the Liberals behave in this House, Mr. Speaker, I wonder if they really want fairness in Canada. In 1984, indeed, we stated that we wanted fairness for each and all in this country. The most recent example that I believe Canadians will remember, particularly those from Quebec, and I know that residents of Portneuf are still reminding me about it, concerns Bill 22. Who filibustered Bill 22? That Bill was precisely about high technology, about our future, about research. Members from the NDP and the Liberal Party say that we do nothing for research. Yet, we introduced Bill 22. The New Democrats supported it, and even though they are against the Senate, they supported the Senate as well. That is something, Mr. Speaker! 1 say they are whited sepulchres. What else can I say? We cannot use other terms for fear of unparliamentary language. So I shall refrain. Nonetheless, it is outrageous. It is outrageous for Canadians and especially for Quebecers, for what were the New Democrats and Liberals doing by filibustering Bill C-22? They were doing, Mr. Speaker, what the Liberals had always been doing: They were creating a strong central Canada and weak eastern and western Canada and forcing East and West to go down on their knees to central Canada, that is southern Ontario.
And that is what they have done, Mr. Speaker, for where were the copying companies? They were in Ontario, not in Quebec. On the contrary, we had in Quebec innovative companies. Hundreds of millions of dollars were contributed by the private sector and were not coming out of the taxpayers pocket, Mr. Speaker. But no! The research must be done in Canada but not by the private sector. It must be done by the Government. They would have Canadians believe that people are not the Government. Well now, Mr. Speaker, when I travel through my riding I say to them: You are the Government. You are the people from whom we get the money. We get the money from your pockets, we do not ask for your permission, but we are the ones who decide how it is going to be spent. That is reality.
Provincial and municipal administrations do exactly the same thing. All Government levels in Canada do that, but indeed they have to provide sound financial management. If we were to listen to the socialists-small-s and capital-S, minor red or green socialists-we would take even more money out of their pockets to be able to make bigger deals and thus appear to be even more important. Budgets would be much

February 23, 1988
The Budget-Mr. Ferland
more impressive and the state would do even more. Still, Mr. Speaker, I am not convinced that the state managed by officials would do better with the money than the private sector or the individual who had to work to earn that money.
Why would these same individuals be against free trade? It just happened that way. I am sure the leader of the New Democratic Party does not come from Canada's most destitute region. I was told that the unemployment rate in his riding is something like 3 per cent. I certainly wish it was at that level in my riding, Mr. Speaker. In spite of the hundred of jobs which have been created, the unemployment rate there is still close to 12 per cent. "If it is good for Ontario", as the Portneuf people will say, "it is good for us too". The people in my riding are not afraid of the American market. We have papermills. We have sawmills and granite processing plants. We have cement plants. And do you know to whom our people are selling? To the Americans! And it is not in their mother tongue that they do! They have learned how to speak English and even American to be able to make themselves understood. They are not afraid of that. Quite the contrary, they are saying: "We are finally going to get the same opportunities as the people in Ontario". But we hear Premier Peterson of Ontario, supported by Mr. Broadbent, the NDP Leader, and Mr. Turner, the Liberal Leader, saying: "We are going to tear up this deal". Can you imagine that, Mr. Speaker? The Liberals and the NDPs are clearly demonstrating that they do not want to give a break to Canadians, whether they live in Western, Eastern or even Central Canada. That is unacceptable. It is as though the country had been governed for 75 years by a Liberal Government only for the benefit of Ontario. It is a fact that Quebec may have been slow understanding. It may have had to wait until the Conservative Party chose a leader from Quebec before it decided to trust him and elect him as Prime Minister in Ottawa with a Conservative Government. But I can tell you something, Mr. Speaker: Ever since a Conservative Government was elected in Ottawa, Quebec has had its fair share, as evidenced by ... Who are the staundest supporters of free trade, Mr. Speaker? The Governments of Quebec, Western Canada, and British Columbia. Why?
Because they are aware that their people will finally have an opportunity to make deals with the Americans, to expand and find new markets in the United States without having to go through Toronto, because we must admit, even if the NPDs and Liberals are loath to say so, that free trade has existed for twenty years in Ontario. It has clearly existed there for twenty years. So if it has been good enough for Ontario ... I remember the slogan: "If it is good for Ontario, it is good for Canada". But now, they have a new Premier... It was a Conservative Premier who was saying that then. Today, the Liberal Premier is saying the reverse: "If it is not good for Ontario, it is not good for Canada". It is funny! Unfortunately, Mr. Speaker, if it is good for Canada, it must be good for Ontario, Quebec, British Columbia and New Brunswick. This is the case of the Free Trade Agreement. It is also the case of the Budgets introduced by Mr. Wilson in this House and of everything which the Governement of the Right Hon. Prime
Minister, Brian Mulroney, has accomplished in the last three and a half years. This is what we have tried to do, Mr. Speaker, and it is not always easy.
I was reading an article today by Rodrigue Tremblay. He is not just anybody; he is very well-known in Quebec. This is what he had to say: Without free trade, there would be only one major centre, Toronto. .. The reason is quite simple: The St. Lawrence valley is now attractive to investors, and the region of Montreal becomes an ideal location to gain access to all North America, especially to the Montreal/Boston-New York-Washington/Chicagop-Toronto triangle.
I know that my time is almost up, Mr. Speaker, but I want to say that everything the Government has done was done openly. The Government had said in 1984 that it would be difficult, but that it would be done. The Opposition says that we have increased taxes. However, not a single Quebecer, not a single Canadian, even if he only has a grade one education, knows that a Governement cannot work miracles and that, when there are debts, they have to be paid. Those debts were not created by the Conservative Party, but by the mismanagement of a Liberal Government in partnership with the New Democrats. Together, they brought Canada to the brink of bankruptcy. What we have done, Mr. Speaker, is to give back some hope to our youth, to all Canadians so that they may develop this country and put it back on track. We have given them proper direction and we shall continue to do so. After the next election, Mr. Speaker, you and I will still be here in this House to protect Canada's interests.


Margaret Anne Mitchell: Mr. Speaker, I would like to ask the Hon. Member a couple of questions. If I heard him correctly, he said we want a Canada that is fair to everyone. I am sure there is unanimous agreement with that statement. Then he went on to give a few statistics on unemployment. He indicated that in Oshawa the unemployment rate was about 3 per cent. In his riding he said it was about 12 per cent. I would like to add that in my riding we did a study which indicates it is 27.5 per cent. Colleagues of mine have said that in the North and on Indian reserves it is over 60 per cent in some instances.
Therefore, 1 think all of us would agree that we just do not have a way of coping with unemployment which is really fair to everyone. Although I agree with him that a lot of jobs have been created and we are glad that the people of Oshawa and the golden horseshoe have low unemployment, we would like to see it right across Canada. Therefore, I would like to ask him what more he thinks his Government, or indeed any Government, can do to get rid of these regional disparities and do more for all Canadians.
Secondly, he referred to the NDP opposing Bill C-22. I think he was a little unkind in some of his remarks. The main reason we opposed Bill C-22 was because drug prices, particularly prescription drugs for the elderly and the chronically ill,
February 23, 1988

will go up phenomenally. They have already gone up almost 200 per cent in some cases as indicated in a recent study in Ontario, 1 believe. 1 wonder if he thinks that is fair. Has he talked to seniors in his riding and does he know what they feel about drug prices going up to that degree?


Marc Ferland: Mr. Speaker, I am always surprised to hear the socialists say that we are attacking senior citizens and that we do not take their problems into account, as though the socialists were the only ones to do so. There is no need to remind you that Old Age Security Pensions were not brought in by the New Democratic Party. As for the price of drugs, the Hon. Member for Vancouver East (Ms. Mitchell) should know that, in Canada, drugs are covered by health insurance throughout the country. There is no question of attacking senior citizens. Absolutely not! Everyone knows that. In my constituency, senior citizens were certainly not scared by Bill C-22. This is because their drugs ... In my riding, senior citizens tell me: There is no problem; our drugs are paid for, and if we cannot afford them, they will be paid by welfare. In any case, the drugs will be paid. So, where is the problem?
As for unemployment in Vancouver, this relates to what I was saying earlier.
It is beyond me that a Member from a part of British Columbia that is one area of Canada with a very high unemployment rate would accept that her party oppose the free trade agreement, which will enable British Columbia to enjoy the same opportunities Ontario has.
Mr. Speaker, I can hardly get it into my head that a Member from an area that calls itself underpriviledged, that claims to have unemployment problems, would oppose extending the same opportunities to her constituents, the same avenues as people have in Ontario. I find that amazing, Mr. Speaker.
I can tell you that in my province of Quebec, we support free trade and will work for the agreement's enactment, for its speedy enactment because in Quebec we want to have the same opportunities as Ontario-the same opportunities for high salaries, the same opportunities to find jobs. We want to ensure we can keep the markets we already have and will not be hit at some point by an untimely tax that would eliminate our jobs. Quite the opposite!
For that reason, Mr. Speaker, it is always a surprise that on the one side of their mouths the socialists would preach virtue and on the other side they will not practice that virtue. Because where I come from practicing virtue means doing what one preaches.
And if we are really to eliminate unemployment in Canada, we must provide our young and all our people with the best tools to do their jobs. If we do not supply them with the best tools, they will have less chance of being successful. And there is no reason for not having in this country the same opportunities from sea to sea, and I will constantly fight any politician,
The Budget-Mr. MacLellan
of whatever political stripe or persuasion, who wants to oppose the free trade agreement, because in my province, in my constituency, it is essential to the survival of small businesses and to ensure ...


The Acting Speaker (Mr. Paproski):: I regret that the Hon. Member's time has expired and questions and comments are now terminated.


Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, it is a pleasure for me to be able to speak in the debate on the Budget recently presented to this House by the Minister of Finance (Mr. Wilson). It is a very curious document because it says so little. One wonders what could possibly have been in the mind of the Minister in bringing out such a bland document, a do-nothing Budget, a non-event, really. Is he saying there is nothing to be done, that the situation is rolling along beautifully? If so, nothing could be further from the truth.
We hear negative comments from all over the country. The business community says the deficit is too high. People from all walks of life say the Government is not concerned about their interests. Certainly if there is one group that must be listened to it is lower-income Canadians. This Budget, like previous Budgets, increases the disparities between the wealthy and not so wealthy. It is a sad commentary on our times that a country as wealthy as Canada should be neglecting people and areas of this country which need assistance in developing their economic possibilities.
Just look at the tone of this Budget, not only what is there but what is not; for example, the child care program. The Government told us it would be bringing forward a child care credit which would apply equally no matter the income of the person claiming the deduction. But it did not do that. It created a deduction of $4,000, which will of course be more significant to wealthy Canadians than it will be to lower-income Canadians. A person in a 29 per cent federal tax bracket will be able to save as much as $1,800 under that deduction, yet someone in a 17 per cent bracket will save only $1,000. That is not what we were led to believe the Government was going to do. We were told one thing and the Government did another.
It seems as though the Government always drifts away from ordinary Canadians when it brings down a Budget or makes its economic pronouncements. Not only does the Government seem to ignore low income Canadians and areas in which economic difficulties are prevalent, it seems to make matters worse. That is not right.
What did the Government do with this Budget? It increased excise taxes. Who will that hit? It will hit the Canadian motorist. The excise tax on gasoline will be increased significantly. Since the Government came to power it has imposed excise taxes on gasoline amounting to 5 cents per litre,

February 23, 1988
The Budget-Mr. MacLellan
inclusive of the tax that was imposed in this Budget. That 5 cents per litre is equivalent to 23 cents per gallon. This amount is higher than the amount of excise tax proposed by the former Minister of Finance, the Hon. Member for St. John's West (Mr. Crosbie), which he was planning to impose in his Budget in December of 1979. He wanted to impose an 18 cent per gallon excise tax. The Government has increased the sales tax. The sales tax also applies to gasoline. There will be a 1 cent per litre increase, which is incredible.
What does this mean? It means that the average Canadian family of two adults and two children will pay $1,200 more in taxes today than it was paying when the Conservative Government was elected in September, 1984. This is not getting to the problem of ordinary Canadians.
The speaker who spoke before me talked about the unemployment rate and how the Government wants to see equal opportunities throughout the country. That is not happening. There are not equal opportunities throughout the country. In fact the opportunities for certain Canadians are becoming fewer and fewer. The Member who spoke before me talked about the unemployment rate being 8.1 per cent nationally. In Nova Scotia it is 12.1 per cent. The Hon. Member for Vancouver East (Ms. Mitchell) said that according to her own tabulations in her own constituency the unemployment rate there is 27 per cent. In my constituency on Cape Breton Island the unemployment rate is 21.1 per cent. It is higher by far than when the Government took office in 1984.
Yet what do we get from the Government? We get the general pronouncements with respect to its strong economic performance. This leads to the apology that perhaps this does not apply across the country, that there are certain areas the Government would like to see a little better off economically. That is all we get.
There is always an asterisk in the Budget about how it is too bad that certain areas of the country are not doing better economically, that certain people in certain areas are more prone to unemployment than people in more prosperous economic areas. That is just not good enough. The Government has been in power now for three and a half years. It is high time that something was done to correct the regional disparities, not making them worse than they were before.
We see continuing evidence that the Government does not care. It says that it will do something and immediately thereafter it says that it forgot all about it. It says these things for public consumption hoping that certain words, phrases or promises will stay in the minds of Canadians. Canadians might have been predisposed to think of these niceties when the Government was first elected, but they will no longer. They know that the words of the Government are hollow and that it does not mean anything that it says when it comes to helping low income Canadians and those living in areas of regional disparity.
What has the Government done? The Minister of Finance started off with his first statement which was not a Budget. It
was an economic statement that he put forward in November, 1984, in which he started to slash programs, including programs that were very necessary for Canadians.
One thing that bothered me in the energy field-something which bothered me then and continues to bother me now-is that the Government slashed programs which helped Canadians save on their energy expenses. Why would a Government do that? That certainly hits low income Canadians. The Government did away with those programs and said that they had never served their purpose. In effect, the Government said, "We are going to get away from actually throwing money at Canadians. We are going to promote programs but we are not going to give away money". It was right about one thing, it certainly did not give away any money. However, it has not been promoting programs either.
The difficulty is that those programs were important to Canadians. Conservation was the most successful aspect of the former Liberal Government's National Energy Program. That program saved Canada 75 million barrels of oil per year. That is something important to consider. It is important to take the strengths of a program or of a country and to build on them, not to destroy them. Destroying them not only does away with the program but hurts the people who the programs were intended to help. In most cases those people are low income Canadians. Not only does this affect the ability of people to pay for their energy, it also affects their ability to stay in their own homes. The conservation program was important in terms of allowing senior citizens and low income Canadians to remain in their own homes.
That was not the only program the Government destroyed. It reduced substantially the Registered Home Ownership Savings Plan. It also cut back on RAP which was an important program giving assistance to Canadians who wanted to stay in their own homes. Not only is my constituency an area of high unemployment, it is an older area as well. It is important that people who are in their homes are able to fund repairs for their homes because if they cannot then they cannot stay in their homes. They will be condemned. What will happen then? They will find themselves without a place to live or the Government must provide public housing. Today, public housing costs between $40,000 and $50,000 per unit. Where is the advantage to Canadians? Where is the advantage to the Government?
The Government promised jobs. It has made many statements. Yet in the Budget the Government does not say what it promises to Canadians. It does not give an accounting of what it has said, showing us what has been delivered on. The Government ignores that. It ignores the promises it has made. It has gone on to make new promises. It wants to make further promises, which of course it has no intention of keeping.
It is important that Canadians know that the Government is not resolving their predicaments at all. What the Government is doing is trying to see what is its best position before going into another election. In the upcoming election Members of the
February 23, 1988

Government will run into a great number of skeptical Canadians. Canadians will no longer take the words of the Government at face value. They will not do that. They will be prepared to accept the promises of the Government, but they will be duly skeptical.


The Acting Speaker (Mr. Paproski):: When debate resumes at 3 p.m. the Hon. Member will have seven minutes left in which to conclude his remarks. That will be followed by a 10 minute period for questions and comments.
It now being 2 p.m. the House will proceed to Statements by Members pursuant to S. O. 21.



STATEMENTS PURSUANT TO S. O. 21


Roland de Corneille: Mr. Speaker, we now have the intolerable situation that there is no federal law in place to protect in any way the rights of the unborn.
Because the right to life is obviously the supreme and highest of all human rights, the recent decision by the Supreme Court of Canada places an urgent requirement, not only on the Government which has the lead responsibility, but also on each and every parliamentarian to see to it that good legislation is passed.
As Members of Parliament we now have at last a rare opportunity, at the invitation of the Supreme Court, to pass legislation to protect the life and the rights of the unborn fetus. I want to make it clear again that I personally am opposed to abortion. But while it is obvious to me that the process of life starts at conception, I am sure that the courts will continue to argue over the legal definition as to when a human life begins, and our legislation will have to anticipate this problem.
However, I am deeply concerned that the Government may decide not to act, or that it may delay. Even if it does bring in legislation, there are dangerous signs that it will imitate a number of other countries, by only limiting protection of the fetus until after a fixed time such as 20 weeks following conception. Such legal rigidity would be tragic because it would deny the full protection of the law to the fetus at an earlier stage. We cannot afford to delay as we are talking about the survival of human life. I call upon the Government to give us an immediate commitment to a timeframe for action.
5. O. 21 ABORTION



RIGHTS OF UNBORN CHILDREN-CALL FOR INTRODUCTION OF LEGISLATION

Mr. Gerry St. Germain (Mission-Port Moody):: Mr. Speaker, I rise on the same subject which is an issue of urgent and pressing necessity. Since the recent Supreme Court decision striking down the abortion law, Canada has become the only civilized nation in the world which has no legislation protecting the unborn child.
Yet a recent Gallup poll of Canadians revealed that 53 per cent of Canadians want some legislation to protect the fetus. They are looking to the federal Government for leadership on this emotional issue.
I recognize and support the current Government on the process of consultation with the provinces prior to the introduction of legislation. Let us move with speed and deliberation. Let us take the lead and demonstrate to Canadians and to the world that we, as a nation, have the courage to balance the rights of women with the protection of human life. No group has unlimited rights.
Every civilized nation will ultimately be measured by how it treats it most vulnerable, those who cannot speak for themselves and who ask for nothing but a chance. I urge the Government to act with courage and compassion.



ABORIGINAL PEOPLES


Mr. Jim Fulton (Skeena):: Mr. Speaker, 1 rise today to insist on the resignation of the Minister responsible for aboriginal affairs. The Minister has broken the trust relationship with Canada's first citizens.
The 1973 ruling of the Supreme Court of Canada on the Nishga case brought Canada into negotiations on the comprehensive claim to the Nass Valley. The Minister has now crushed those negotiations and refuses to act in good faith.
Since 1940 the Lubicon Band has sought the respect and assistance of the federal Crown for the historic lands of the Lubicon people. The Minister has chosen to fund the Dai-shawa Corporation to log the very lands that the Lubicon seek, in contravention of Cabinet requirements for an impact evaluation. This is bad faith.
Since 1985 the Lytton and Mount Currie Bands have sought to meet with the Minister for assistance in preparing their case on the Stein Valley. Even today they are here in Ottawa and the Minister has refused to see them. This is bad faith.
The Chief Justice of the Supreme Court of British Columbia has encouraged aboriginal people in British Columbia to stand up for their rights. The first citizens of Canada cannot put

February 23, 1988
trust in a Minister who will not meet and who will not negotiate. Race relations are disintegrating in British Columbia as a result of the calculated budget cuts combined with accelerated pressure on the lands and resources.
The Minister must resign because these federal policies are forcing natives and non-natives into confrontation and, potentially, violence.

[ Translation]



NATIVE PEOPLES


Mr. Guy St. Julien (Abitibi):: Mr. Speaker, the article by Pierre Foglia published today in La Presse which deals with the James Bay Cree is contemptuous as well as slanderous towards this wonderful people which I have known personally for over thirty years.
Pierre Foglia should know that the white population of Abitibi has respect for this people which has greatly contributed to its economy, its knowledge of the North and its renowned arts and crafts. I have great respect for the Great Chief Matthew Coon-Come and all the chiefs of Cree communities which represent this great people.
We have here a remarkable people, recognized before the United Nations and in Geneva, and able to manage its own affairs. The Cree also have a mind for business and I might recall that they own 42 corporations and a profitable airline, Air-Creebec, in Quebec.
Mr. Speaker, I am apalled and indignant at the racism and baseness which transpire from every line in this article. For such ignorance and foolishness, I can only ask: Lord, forgive this "foolish-glia" for what he says!



SCOUTING


Mr. John Nunziata (York South-Weston):: Mr. Speaker, this week is National Boy Scout and Girl Guide Week. I would like to take this opportunity to congratulate all the boy scouts and the girl guides in the federal riding of York South- Weston.
On February 12 the Hon. Member for York West (Mr. Marchi) and I had the pleasure of attending the First Weston
Beaver-Cub and Scouts fund raising dance. We were extremely honoured that evening to have been made honorary scouts of Weston. Scout Leader, Mr. Kevin Breakey, administered our oath and gave us our scout scarves, which I am wearing here today in the House. I promised the boys that I would wear this scarf in the House today.
Yesterday, February 22, was Lord and Lady Baden-Powells' birthdays. Their birthdays coincidentally fall on the same day. Lord Baden-Powell was the founder of the Boy Scouts of Canada, and Lady Baden-Powell was the founder of the Girl Guides of Canada. Our Chief Scout of Canada is Her Excellency the Right Hon. Jeanne Sauve.
The scouts and guides are a community oriented organization that unselfishly supports communities by such events as food drives for the needy and special projects for senior citizens. One of the major endeavours of the boy scouts is the "Trees for Canada" project. Over the past 15 years the boy scouts have planted more than 2 million trees across the country as a conservation project. Incidentally, 15 per cent of all funds raised on this particular project go to youth education in Third World countries.
The scouting oath is based on the following principles:
I promise to serve my God, my Queen, my country and my fellow man and
to be wise in the use of my resources.
I am sure that I speak on behalf of all Members when I say congratulations to all the boy scouts and girl guides in Canada.



INDIAN AFFAIRS


Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, the attention of the Ministers of Public Works (Mr. Mclnnes) and Indian Affairs (Mr. McKnight) ought to be directed to the problems being caused by the arrears, some going back to 1985, of payments of grants in lieu of taxes to municipalities in respect of land reserve for Indians within these municipalities.
People live on the lots in question, but title to the land is held by the Department of Indian Affairs. Grants in lieu of taxes are supposed to be paid by the Department of Public Works. If it does not pay, municipalities will no longer be able to provide services to the affected residents.
In northern communities such as Fort Smith and Fort Simpson where land so designated constitutes a large proportion of the total, the burden caused by non or late payment is extremely heavy.
February 23, 1988



POLITICAL PARTIES


Howard Douglas McCurdy: Mr. Speaker, allow me to pose a question. When would a free trade agreement no longer be a free trade agreement? Doubtless, Mr. Speaker, your impeccable logic would conclude that if it were torn up it would no longer be a free trade agreement.
But, Mr. Speaker, Liberal utterings indicate a greater freedom in labile Liberal logic than that available to the rest of us, because there are Liberal voices who suggest that we are wrong. Perhaps we did not have the question right. Perhaps our question should have been, when is a commitment to tear up a free trade agreement no longer a commitment to tear up a free trade agreement? Perhaps the answer is when Liberal corporate donors say that such a commitment is to commit suicide. A conundrum to find an answer to which the Member for Windsor West (Mr. Gray) and the Member for Winnipeg-Fort Garry (Mr. Axworthy) were dispatched to Washington, to find a new commitment perhaps to avoid committing financial suicide.



HUMAN RIGHTS


Mr. Jim Jepson (London East):: Mr. Speaker, the year 1988 is special to Ukrainian Canadians as it marks the millennium of Christianity in Ukraine. It also reminds us that, although the Soviet Government has claimed to have adopted a spirit of openness or "glasnost", persecution of Ukrainian Orthodox and Ukrainian Catholic clergy continues. As well, the Soviet Government has perpetrated numerous human rights violations, disregarding the statutes of the Helsinki Accord, to which it is a signatory.
An example is the case of Yuri Shukhevych who has been in prison for 36 of the last 40 years simply because he is the son of General Roman Shukhevych, the Commander in Chief of the Ukrainian insurgent army who was killed in 1950. Today Yuri Shukhevych remains in prison in very poor health.
Yuri Shukhevych's "guilt" lies not in commission, but in association. This is a travesty of human rights. Until the Soviet Government ceases human rights violations there can be no glasnost and no justice.
Lest we misinterpret the true intentions of the Soviet Government, I urge the Secretary of State for External Affairs (Mr. Clark) and the Government of Canada to pressure the Soviet Government for the release of Yuri Shukhevych and other prisoners of conscience in the Soviet Union.
We all want peace, but not without freedom.



CHALLENGE '88 ADMISSIBILITY OF CERTAIN INSTITUTIONS TO PROGRAM

Mr. Giiles Grondin (Saint-Maurice):: Mr. Speaker, again this year we are faced with the same problem: homes and institutions belonging to the Social Affairs network in Quebec cannot apply to the Challenge '88 Program. Last year we were told that these institutions could not participate in the Challenge Program but, at the last minute, an agreement was reached and, had we decided then to favour those institutions, we would have had to cut help already given to organizations or other institutions in various ridings.
1 am wondering, Mr. Speaker, why, this year, as soon as the Challenge '88 Program was announced, the Minister of State for Youth (Mr. Charest) did not start to negotiate quickly with the institutions which are part of the Social Affairs network, instead of waiting until the last minute and, may be, announcing the same thing as last year.



AIRPORTS


Mr. Geoff Scott (Hamilton-Wentworth):: Mr. Speaker, at almost exactly this hour in Hamilton City Hail, regional councillor Ann Sloat is delivering the same message to concerned residents of Ancaster as I am telling Hon. Members in this House.
The entire Hamilton-Wentworth area desires to get as much air traffic as possible into Hamilton Airport. The just announced Pan Am express service from Hamilton to New York is great.
What we do not need, as just one example of sleep disturbing activity, is a major airline which purchases giant airbuses from France and then test flies them, with 36 take-offs and landings from one o'clock to three o'clock in the morning.
I am fully supporting a midnight to 6 a.m. curfew on all flights in and out of Mount Hope, except for unforeseen circumstances, and that is the region's problem.
To enforce the curfew, I am urging Transport Canada to consider staffing the control tower 24 hours a day with round-the-clock surveillance to monitor all air navigation and to put an end to some strange nocturnal happenings up there.
We want full use of Hamilton Airport, not flagrant abuse of our airport.

February 23, 1988
Oral Questions PRIVATIZATION



MERGER AND SALE OF ELDORADO NUCLEAR AND SASKATCHEWAN MINING DEVELOPMENT CORPORATION

Mr. David Orlikow (Winnipeg North):: Mr. Speaker, our billion dollar Minister of State for Privatization and Regulatory Affairs (Mrs. McDougall) has struck again. Perhaps the most disturbing part of the Minister's press conference yesterday in Saskatoon was her statement that the proceeds of the sale of a merged Eldorado Nuclear and Saskatchewan Mining Development Corporation would go toward retiring the debt of the two companies.
What this means is that the people of Canada will be forced to assume $600 million in debt, and the people of Saskatchewan another $450 million, for a total of over $1 billion. The only people who will benefit will be those able to buy shares, not the ordinary citizens of Canada who advanced the hundreds of millions of dollars necessary to establish both these public enterprises.
Since both Eldorado and Saskatchewan Mining Development Corporation have been presented to the public as viable, well managed companies, why do the purchasers need an additional public subsidy of $1 billion in order to be persuaded to buy?
Clearly the Government wants future high share prices and increased profits for its private sector friends. Under this proposal future profits will be paid for, in advance, by the Canadian public, thanks to the Conservative Government.



POLITICAL PARTIES


Don Boudria: Mr. Speaker, the "BBC" is at it again. The Back Bench Committee, not content with its attempts to scuttle bilingualism in Canada, has now decided to stop the new conflict of interest Bill. Those remnants from the Neanderthal and brontosauras era do not want the new "ease the sleaze" legislation. They say: "It is not our fault if Tory cabinet Ministers cannot keep their dirty paws out of the public trough".
In 1984 the Tories won an election, not a lottery. Let us have the new Bill. We can live with the rules on this side of the House. The question is: Can the Tories do likewise, for a change?



HOUSING


Mr. Marcel R. Tremblay (Quebec-Est):: Mr. Speaker, the housing sector is given a very high priority by the Conservative government because many Canadians have trouble finding affordable housing. For example, in my Quebec-Est riding, since September 1984, the federal government has allocated over $2 million to build close to 500 public and private nonprofit housing units. On top of that, our government spent, under the nonprofit housing program, $13 million on guaranteed loans for homeowners as well as $3 million on rental housing.
Whether they live in the city or in the countryside, Quebecers are very attached to their neighbourhood. Our policies, Mr. Speaker, are people-oriented. They are humane and respectful of individual liberties.
The Progressive Conservative party, Mr. Speaker, has revived the Canadian economy, thus guaranteeing our social initiatives for the coming years.



FREE TRADE


Mr. Gabriel Fontaine (Levis):: Mr. Speaker, the Oshawa City Council has just endorsed our free trade deal by a majority vote of eight to five. This city is located in the riding of the socialist leader. The people of Oshawa, the elected members of this city, have passed a motion which flies in the face of the socialist leader, and they say to him that the free trade that has existed in the automotive industry since 1965 must continue. They stated that they do not agree with the position taken by the Hon. Member for Oshawa, their representative in Parliament. The aldermen of the city of Oshawa are elected by people who benefit from the free trade, from the Auto Pact. They know what they are talking about. Their member of Parliament does not represent them anymore, and he must resign, Mr. Speaker!



ORAL QUESTION PERIOD


Mr. Brian Tobin (Humber-Port au Port-St. Barbe):: Mr. Speaker, my question is for the Prime Minister. In eight of ten Canadian provinces unemployment is higher today than it was prior to the 1981-82 recession. The Prime Minister, indeed his
February 23, 1988

Government, has acknowledged that fact. For three years the Government has said that it is concerned about the uneven growth of the economy in Canada's regions, and for three years the Prime Minister and his Government have promised to increase regional economic development spending.
This morning's budget Estimates show that while the Government has been preaching the virtues of regional development, it has in fact been practising a policy of regional abandonment.
Will the Prime Minister now admit that, despite his promises of new regional development programs and new money for those programs, regional development spending in Canada has been cut by 20 per cent since the Government came to office in 1984?


Donald Frank Mazankowski: Mr. Speaker, first I would like to correct the false impression which the Hon. Member has left. For example, in September, 1984, when the Government assumed office, the unemployment rate in Newfoundland, his home province, was
23.8	per cent. Today it is 17.4 per cent. In New Brunswick it was 16.2 per cent. Today it is 12.5 per cent. In Quebec it was
12.9	per cent. Today it is 9 per cent. In Alberta it was 12.1 per cent. Today it is 8.8 per cent. There has been a significant drop in unemployment. As a matter of fact, it has dropped to its lowest level in six years.
With respect to DRIE, it is unfortunate that the Hon. Member has not examined the Estimates in a proper manner. He will find that in 1984-85 grants and contributions to support industrial development and regional development amounted to some $832 million. In 1988-89, according to the Estimates which were tabled today, it is $1.7 billion, or an increase of more than 100 per cent.


Some Hon. Members:: Hear, hear!


Brian Vincent Tobin: The Estimates speak for themselves, and I invite all Canadians to read them. Comparing unemployment today with unemployment during the height of a recession is not the mark of a government accomplishment.


ATLANTIC CANADA OPPORTUNITIES AGENCY
Brian Vincent Tobin: Mr. Speaker, when the Prime Minister announced the formation of the Atlantic Canada Opportunities Agency and the Western Diversification Program, he promised that both these regional development programs would be funded with new money over and above existing levels of regional development spending.
On June 6, 1987, in St. John's, Newfoundland, the Prime Minister said:
This is not a "topping-up"; it is not old money in a different guise. It is a
commitment of new resources to a new agency for new programs in the
Atlantic region.
Oral Questions
This morning's Estimates merely indicate that the Government is playing a shellgame with Atlantic Canadians and with western Canadians.
I ask the Prime Minister, because I addressed his words and his commitment, how he squares his commitment to put new money into new programs with the reality of a $1.5 billion cut contained in this morning's Estimates in regional development programs. I ask the Prime Minister that question. I hope he has the courage to answer.


Donald Frank Mazankowski: The Prime Minister not only has the courage, he has the vision. That is why the unemployment rate has dropped to 8.1 per cent.


Some Hon. Members:: Hear, hear!


Donald Frank Mazankowski: Instead of the Hon. Member relying upon his research assistant, he should read the Estimates himself for he will find-


An Hon. Member:: He can't read.


Donald Frank Mazankowski: -that in 1984-85 under DRIE commitments, they amounted to just over $1 billion. That was the total envelope. Today with DRIE, the Western Diversification Initiative, the Atlantic Canada Opportunities Agency, the envelope has increased to $1,966 billion, or an increase of almost $900 million. Those are the facts, Mr. Speaker.


PRIME MINISTER'S COMMITMENT
Brian Vincent Tobin: Mr. Speaker, the tragedy for the Government is that Canadians can read and they do remember the Prime Minister's words. Let me quote again from a statement last June in the middle of a by-election in Newfoundland when he said, with respect to the Atlantic Canada Opportunities Agency:
We begin with new money, a new mission, and new opportunity. Perhaps we
could also add-and with the goodwill of the people of Canada.
Does the Prime Minister of Canada not realize that this cruel and cynical shellgame he is playing with the dollars in the regional development department does not generate goodwill, it generates mistrust by the people of Atlantic Canada and by the people of western Canada? Will he order his Minister of Finance to stand in his place and to restore the cuts that have been made in the area of regional development at a time when Canada's regions are seeing the development of two economies? Will he do that and keep his word given last year in Newfoundland?


Donald Frank Mazankowski: Mr. Speaker, it is indeed unfortunate that the Hon. Member does not listen to the answers. He had his questions prepared before he heard the answers. He is just reading.

February 23, 1988
Oral Questions Mr. Tobin: You don't listen.


Donald Frank Mazankowski: He talks about trust and commitment. He overlooks the fact that 1,156,000 new jobs have been created since the Government took office. He overlooks the fact that last year there were more new jobs created than at any time since Statistics Canada recorded the job-creation activity in this country, 611,000 jobs, of which 53 per cent of all jobs created have gone to women.
In so far as Newfoundland is concerned, Mr. Speaker, I refer the Hon. Member to page 12921 of Hansard for February 12, 1988, where the Minister of Finance pointed out:
The transportation and highways ERDA agreement, $112 million; the pulp and paper ERDA agreement, $38 million; forestry resource development, $33 million-
These are all in Newfoundland, Mr. Speaker.
-Channel of Port aux Basques water supply, $6.5 million; Newfoundland offshore development fund $225 million; Goose Bay airport redevelopment, $93 million; the FBI equity injection of $77 million; Terra Transport-


Some Hon. Members:: More!


Some Hon. Members:: Hear, hear!


Mr. Speaker:: The Hon. Member for Mount Royal.


TELEFILM CANADA
Mrs. Sheila Finestone (Mount Royal):: Mr. Speaker, Jean Sirois, friend of the Prime Minister, has caused untold grief as Chairman of Telefilm. Yesterday the Minister was too clever by half. She tabled a five-page letter instead of Mr. Pearson's full 24-page letter of October 13 in which he says that Mr. Sirois, her political appointee, had overstepped his authority as well as abusing his expense account.
Why did the Minister hide the other letter? Why did she not give us the full story?


Hon. Flora MacDonald (Minister of Communications):: Mr. Speaker, I tabled the official, signed letter that Mr. Pearson sent to me. I admit, of course, that there was a second letter. I may also say to the Hon. Member that the action I took on the difficulties in Telefilm would have been the same regardless of what letter I had received because we knew that Telefilm was in financial difficulty. We knew that there had been difficulties with management, and we moved immediately to ensure that there was an audit made of the finances of Telefilm, and that financial systems and a financial management team were put in place.
It is interesting to note that the film industry itself, the association representing some 200 film producers in this country, wrote to me and said: "We share your distress over
recent attempts to make political mileage out of, what for us, was old news. We have been working with Jean Sirois in trying to get everything ready for a new Executive Director".
You see, Mr. Speaker, the industry wants the success story of Telefilm to be carried forward. It is people who are trying to disrupt it, such as the Hon. Member for Mount Royal, who are causing difficulty.


OVERCOMMITMENT OF CORPORATION FUNDS
Sheila Finestone: Mr. Speaker, sticks and stones to me will not improve the television industry unless this Minister has a better commitment. I will send the Minister a copy of the letter I am talking about. I will also send her the other story which is absolutely disgraceful.
Does the Minister still stand by her response, and I quote, the response she gave yesterday:
The executive director reported that Telefilm was overcommitted to the tune
of $48 million.
Would she be prepared to correct her misinformation and acknowledge that it was Chairman Sirois on October 26 who made that unfounded announcement?


Flora Isabel MacDonald: Mr. Speaker, I can tell you that we had been advised by the former Executive Director that there was probably going to be a lapse of $53 million. Then through the month of September we learned that that was not so. In fact the Department of Communications worked with the management of Telefilm to bring auditors into place to find out what the correct situation was.
The Hon. Member says that we have not done anything, in fact, to help out with this situation. May I say that that is not the view of the people in the industry. They write and say to me that: "Telefilm Canada is a success story"-they recognize that-"and will remain a crucial part of the success of the Canadian film and television industry. The membership acknowledges your role and your staffs assistance in the gains that we have made".


OFFICIAL LANGUAGES
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is for the Deputy Prime Minister. I have here a copy of a confidential report from members of the Conservative caucus about the amendments to the bill aimed at improving the Official Languages Act. According to this report, some members of the Conservative caucus want to have 15 amemd-ments to that legislation, 15 amendments which would destroy the Official Languages Act. Would the Deputy Prime Minister
February 23, 1988

assure the Flouse of Commons that the Government has no intention to yield to their wishes thereby destroying Canada official languages Act?


Donald Frank Mazankowski: Mr. Speaker, I have responded to a similar question in the House before. 1 have indicated that there are some Members who have expressed some concern about certain elements of the Bill. There will be a caucus held to deal with this particular issue.
As I said at the time, the Government has no intention of deviating from the principle of the Bill. I would be surprised that any piece of legislation, given the scope and magnitude of Bill C-72, would proceed through the House and committee without some amendment. If that were not the case, then I am sure the Hon. Member would be the first to agree.
The Government has no intention of deviating from the principle of the Bill. If there were some fine tuning and some clarification required, those suggestions will certainly be entertained.


GOVERNMENT POLICY
John Edward Broadbent: Mr. Speaker, the fine tuning, specifically with the intention of improving legislation that has in the past been supported by all the Leaders and all the Parties in Canada and has been accepted by the large majority of all Members of all Parties, is one thing but 15 amendments would destroy the Bill. That is completely unacceptable to the House of Commons, and I hope it would be unacceptable to the Government.


Donald Frank Mazankowski: Mr. Speaker, I have just indicated the position of the Government. I do not know why the Hon. Member is getting so worked up. He has some pretty serious divisions in his own Party with respect to its policy on NATO. We do not go out exploiting that particular issue-


Some Hon. Members:: Oh, oh!


Donald Frank Mazankowski: Mr. Speaker, I am sorry, we do once in a while, mildly.


John Edward Broadbent: I was about to say that the Deputy Prime Minister is an honourable man and normally quite candid.


REQUEST FOR EARLY VOTE ON LEGISLATION
John Edward Broadbent: Mr. Speaker, I want to return to what the Deputy Prime Minister understands, the House understands, and the country understands to be a very serious subject. Having heard that, according to him, the Government remains committed to the principle of the Bill
Oral Questions
that has been introduced, will he assure the House that his meetings with his own back-benchers will be concluded soon so that we can have a vote very soon in the House of Commons on this important matter of principle?


Donald Frank Mazankowski: Mr. Speaker, that is a very interesting turn of events. If that is an indication that the NDP will not put up any more speakers and the Liberals will not put up any more speakers, I am sure we can move on this fairly quickly.
I appreciate the Hon. Member's interest. I just hope that he is a little patient. We are dealing with the Budget now, and when we have dealt with the Budget I am sure we will then be able to deal with this piece of legislation. It is a very important piece of legislation and we intend to proceed with it.


REQUEST FOR SPEEDY PASSAGE OF LEGISLATION
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, my question is with respect to the same report from the Back Bench Committee of the Conservative Party. If the Government is committed to the principles of the Bill and simply contemplates technical and fine-tuning changes, then certainly these should be done after second reading and after committee hearings at a committee of the House of Commons, and not in the back rooms of the Conservative caucus. Will the Minister make a commitment to proceed quickly with this Bill as requested by Alliance Quebec and by the Association des francophones hors du Quebec and make changes as they are made in the usual way in this House?
Donald Frank Mazankowski: Mr. Speaker, I guess I can take from the Hon. Member's intervention that the Liberals are prepared to see the Bill pass very quickly. I am glad. That is a good indication.
The Hon. Member has been around here a long time. He knows that discussions go on in caucus. I certainly know that they have some differences of opinion in their caucus. Of course they have three different positions on literally every issue so it is easier for them to have a mild caucus.
These are some very important issues that have to be discussed. We intend to discuss them. We will deal with this issue. We intend to proceed with the Bill. I am glad we will have the co-operation of opposition Parties.


ADVERTISEMENT PUBLISHED BY ALLIANCE FOR THE PRESERVATION OF ENGLISH IN CANADA
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, these Conservative back-benchers have printed their criticisms of the Bill in detail publicly as has the Alliance for the Preservation of English in Canada which has taken out full-page ads in newspapers across the country. I
[Stage Direction]
February 23, 1988
Oral Questions
would ask the Minister if he, with the resources of his Government, is willing to rebut publicly in detail those unfounded allegations and misinformation put forward by Conservative back-benchers and by the Alliance for the Preservation of English in Canada. Will he do that publicly in the newspapers of Canada just as they have done?
Mr. Speaker:: I notice that the Hon. Member has not mentioned any particular Member by name, but I just want to indicate that it is not proper in this place to impute the motives of Hon. Members. That is getting pretty close to the bone. I just hope it does not get any closer.


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, I can respond to the question put by the Hon. Member who asks whether the Deputy Prime Minister will respond to some of the criticisms that have been made. In point of fact, my hon. friend will be pleased to learn that the Deputy Prime Minister and nine other senior Ministers from western Canada signed a specific point-by-point rebuttal of criticisms of Bill C-72, which was published in a western magazine, and which we believe is a very eloquent and sensitive expression of a national point of view, very much to the credit of the Deputy Prime Minister and all the leaders of western Canada.


TEXTILES
Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, 1 have here the November letter from the Minister of Regional Industrial Expansion to the head of the apparel industry, and I would like to ask the Minister about that letter. It is very precise and says:
-my colleague, the-Minister of Finance has decided to proceed with the
development of an important duty remission program for the apparel industry
prior to the June 30, 1988, deadline.
Since then various U.S. interests have said that the trade deal will not pass if we proceed in this direction. Suddenly, the Government has started to waffle. I want to ask the Minister if this is still a commitment, clear and forthright, of the Government, yes or no?


Hon. Robert de Cotret (Minister of Regional Industrial Expansion and Minister of State for Science and Technology):: Mr. Speaker, I will not quarrel with my hon. colleague's expertise on waffling. It is certainly not an area with which we are very familiar.
I can tell the Hon. Member that we did write to the industry and we did indicate to the industry that we were prepared to put a plan forward, a plan to be discussed with the industry in general, to see if we could not reach an agreement that would be accepted by all parties concerned, we do not feel that, in any way, that proposal is in contravention of the free trade
agreement put forth, and the discussions are ongoing with the industry.


GOVERNMENT POSITION
Steven W. Langdon: Mr. Speaker, there was a very precise commitment not to talk with the industry but to proceed with the development of this duty remission program. I quoted from the Minister's own letter. 1 ask him to give a direct answer, yes or no, is the Government still committed to the promise it made in November of last year?


Robert René de Cotret: Mr. Speaker, I find it rather strange that the Hon. Member should suggest that the Government cannot consult with the industry on such a fundamental matter affecting the competitiveness of that very industry in which there are some concerns raised by different sectors of the industry about the issue. We are discussing it. We want to improve the competitiveness of the industry, and this is fully consistent with everything we have said to date. I really fail to see the point of the whole question.


REGIONAL INDUSTRIAL EXPANSION
Mr. Dave Dingwall (Cape Breton-East Richmond):: Mr. Speaker, my question is directed to the Deputy Prime Minister. The people of Nova Scotia know that the Government of Canada is not committed to the coal industry of eastern Nova Scotia. First, the Deputy Prime Minister refused to include representatives from Atlantic Canada on his special committee on utilizing Canadian coal primarily for Ontario Hydro. More recently, one of his Ministers announced in the Estimates a $70-million cut for the Cape Breton Development Corporation.
I would ask the Deputy Prime Minister to explain to Canadians why the Government continues to preach about its concern for regional inequalities when in fact it is a barefaced untruth, and it is not committed to regional industrial development in Canada.


Robert René de Cotret: Mr. Speaker, the basic facts are very clear about our commitment to regional economic development. In the Estimates that were presented today, including ACOA, the Western Diversification Office and DRIE, we find that expenditures for regional development total close to $2 billion. In DRIE alone there is an increase of $197 million. In ACOA there is obviously an increase of $316 million. There is $312 million for the western development initiative. We find that Vote 10, the vote for DRIE alone, has increased from $849

February 23, 1988

million last year to $1,084 million this year. If that is not a strong commitment to regional development, I do not know what it is.


CAPE BRETON DEVELOPMENT CORPORATION
David Charles Dingwall: Mr. Speaker, my question is directed to the Deputy Prime Minister. That commitment is similar to the one which the Minister of Finance made on February 26, 1986, to older workers in this country when he promised a new program. Two years have elapsed and there is not one red cent for older workers.
The Minister has refused to answer the question. Why has the Government cut in excess of 50 per cent-54 per cent to be exact-from the capital expenditure budget of the Cape Breton Development Corporation? If the Government is so committed to the coal industry it should put its money where its mouth is.


Mr. Crosbie:: That's not a question.


Flora Isabel MacDonald: No one should have to answer that question.


Mr. Speaker:: The Hon. Member for St. John's East.


LEVEL OF GOVERNMENT FUNDING FOR REGIONAL DEVELOPMENT
Mr. Jack Harris (St. John's East):: Mr. Speaker, my question is directed to the Deputy Prime Minister. The Estimates tabled in the House this morning reveal the real truth about the Government's lack of commitment to regional development. They show that the percentage of expenditures for economic and regional development has fallen from 13.6 per cent in 1984 to 10.3 per cent today, a shocking decrease of 24 per cent in only four years.
Will the Deputy Prime Minister not admit that these figures show the abandonment of any real commitment to regional development, except for rhetoric?


Donald Frank Mazankowski: Mr. Speaker, it is unfortunate that the Hon. Member did not listen to my first answer to the Hon. Member earlier. The grants and contributions under the economic and regional development envelope have increased from $832 million in 1984-85 to-


Some Hon. Members:: They went down.


Mr. Frith:: Tell us about the Edmonton Mall.


Mr. Speaker:: The Hon. Deputy Prime Minister.


Donald Frank Mazankowski: -from $832 million to $1.7 billion which is an increase of $868 million. That is a doubling, Mr. Speaker.
Oral Questions
The Hon. Member is referring, of course, to the fact that the dismantlement of the NEP under the Department of Energy, Mines and Resources, through which the confiscation of revenue from western Canada was channeled through the Department of Energy, Mines and Resources, reduced expenditures by some $4 billion. However, thanks to the dismantlement that transaction is no longer necessary. Even with that taken into consideration the envelope for regional development has increased by some 16 per cent.
The NDP gets up day in and day out and says that the Government is not committed to regional development. The NDP voted against every regional development initiative that we brought before the House.


ATLANTIC REGIONAL DEVELOPMENT
Jack Harris: Mr. Speaker, the Prime Minister announced last June new moneys in the amount of $200 million a year for Atlantic regional development. Will the Deputy Prime Minister not admit that this is a miserly commitment in a Budget of $132 billion for a problem which the Economic Council of Canada has called the most serious economic problem facing the country?


Donald Frank Mazankowski: Mr. Speaker, I challenge the Hon. Member to stand up in this House and tell the Canadian people why they voted against a $127 million fund for the Atlantic Canada Opportunities Agency, why they voted against $101 million for the Western Diversification Fund, or $465 million for additional funding for DRIE, or why they voted against $29 million to help native self-government and economic development. Let him explain that to the Canadian people.


John Edward Broadbent: Why do you mislead Parliament?


NATIVE PEOPLES
Mr. Keith Penner (Cochrane-Superior):: Mr. Speaker, my question should properly be directed to the Secretary of State for External Affairs but I will seek an answer from the Minister of Indian Affairs and Northern Development. I wonder if the Minister is aware that on Thursday of this week the United Nations Human Rights Commission will be voting on three resolutions which are very important to the aboriginal peoples of Canada and in fact to indigenous people all around the world.
These resolutions call, first, for the setting of international standards for the treatment of indigenous peoples; second, for an inquiry to be set up by the United Nations to look into how treaties are dealt with between nations that have indigenous

February 23, 1988
Oral Questions
peoples-and Canada has many such treaties-and, finally, that 1992 is to be set aside as the International Year for the Recognition of Indigenous Rights.
Can the Minister of Indian Affairs and Northern Development explain to the House and to the aboriginal people of Canada why Canadian officials in Geneva are actively lobbying against these resolutions and trying to have their approval quashed?


Hon. Bill McKnight (Minister of Indian Affairs and Northern Development):: Mr. Speaker, I am not aware of the activities of officials in Geneva but I am aware of some of the concerns that have been expressed by aboriginal peoples in Canada to the United Nations and those concerns are being heard.
One of the reasons, I could assume-but I do not know- that officials may be putting forward a Canadian point of view is that under the UN Charter all existing avenues for redress in your own country must be explored before you go to the United Nations. In several cases in Canada, as the Hon. Member knows, there are court actions and other avenues of redress which aboriginal people have not followed to fruition and they are now pursuing their claims in other areas of jurisdiction. I hope they could be pursued in Canada.


B. Keith Penner: Mr. Speaker, the Minister will realize upon reflection how inadequate that answer was.


REQUEST THAT OFFICIALS BE INSTRUCTED TO SUPPORT RESOLUTIONS
B. Keith Penner: Mr. Speaker, I have been in touch in Geneva with the Grand Council of the Cree of Quebec. I have in my hand a direct intervention made before the Sub-Commission by a Canadian delegation.
Will the Minister arrange a meeting this week, possibly today or at the latest tomorrow, with the Secretary of State for External Affairs, and will the two of them send a very strongly worded directive to the Canadian officials in Geneva and tell them to get behind these resolutions and give Canada's fullest support to the United Nations Human Rights Commission?


William Hunter (Bill) McKnight: Mr. Speaker, I should not have to remind the Hon. Member of the commitment of the Right Hon. Secretary of State for External Affairs to human rights, in Canada and around the world. Despite all the good intentions that my colleague may have, the Right Hon. Secretary of State for External Affairs does not have to consult with me or the Hon. Member. His record and that of Canada are well known throughout the world.


CANADIAN BROADCASTING CORPORATION
Mr. Reginald Stackhouse (Scarborough West):: Mr. Speaker, my question is for the Minister of Communications. Very soon the CBC is expected to present a plan to the Government for its proposed new Metro Toronto headquarters. Scarborough has offered a site which is part of Canada's most exciting architectural complex which would represent only 5 per cent of the cost of the proposed City of Toronto site.
Will the Minister assure the House that, in the interests of the Canadian taxpayer, the Scarborough proposal will be included in those considered by the Government?


Flora Isabel MacDonald: Mr. Speaker, some two years ago the Cabinet gave the CBC the authority to call for proposals for the construction of a new broadcast centre in Toronto. I am sure we all recognize that the present facilities of the CBC there are inadequate.
I want to inform the Hon. Member and others that the CBC is in the process of finalizing the proposal that it will present to Cabinet. This will come before Cabinet by the end of March. I am certain that even though we have not yet received the proposal from the CBC, it will take note of what the Hon. Member has had to say.


ABORIGINAL RIGHTS
James Ross Fulton: Mr. Speaker, my question is for the Right Hon. Prime Minister. Since September 4, 1984, the Prime Minister has never once spoken out in support of what is apparently his own government policy to settle comprehensive aboriginal claims in British Columbia.
Since the only active negotiation is with the Nishga Tribal Council in the Nass Valley, and since there has been no progress on this claim since 1984, will the Prime Minister take this opportunity to endorse the policy of negotiated settlement and assure Canadians that the steps necessary to achieve settlement will in fact be taken now?


William Hunter (Bill) McKnight: Mr. Speaker, under the leadership of the Prime Minister, my colleague, the Hon. Minister of State, implemented a new comprehensive claims policy after consulting with Indian leadership in Canada. We went forward after the implementation of that was announced in December,
1986.
Presently six claims are under active negotiation in Canada. 1 hope they can be settled. If we cannot come to a settlement
February 23, 1988

on the six active negotiations, we will proceed down the list and attempt to conclude negotiations with those outstanding claimants.
The necessity of settlement really implies co-operation, which we have had from the claimant groups and hope will continue.


REQUEST THAT MINISTER MEET INDIAN CHIEFS
James Ross Fulton: Mr. Speaker, my supplementary question is directed to the Prime Minister. The Minister of Indian Affairs and Northern Development talks about cooperation. The Lytton and Mount Currie bands have been attempting to meet with the Minister of Indian Affairs regarding the Stein Valley since 1985, and have been refused. The Minister has refused to meet with them, including even today.
Will the Prime Minister take the opportunity to meet with Chief Ruby Dunstan and Chief Leonard Andrew who are here in Ottawa today seeking the Prime Minister's assistance and, if not, will he appoint a Minister of Indian Affairs who will meet with aboriginal people?


Martin Brian Mulroney: Mr. Speaker, I am somewhat surprised by the prefatory nature of the comments of my hon. friend with regard to our commitment to aboriginal rights.
I had the privilege of chairing two First Ministers, conferences in Canada, seeking justice for our aboriginal people and seeking the appropriate constitutional amendment that would deliver that justice. We came extremely close to securing an historic agreement. We have to try again.
If I may say so, I, along with many others, was instrumental in working out an agreement that I believe was satisfactory to the native people and all the environmental groups with regard to South Moresby in British Columbia. That was a landmark settlement which very much favoured the aboriginal presence and economic development in British Columbia. We have introduced a number of comprehensive initiatives.
It is with a great deal of pleasure that I regularly meet with aboriginal leaders here and across the country. I have done so from the day I was sworn in and will continue to do so on a regular, ongoing basis. Any time that it is in any way productive, I will be happy to do so.


RAILWAYS
Geoff Wilson: Mr. Speaker, my question is directed to the Minister of Transport. It concerns the 1988 rail rehabilitation program in western
Oral Questions
Canada and the omission from that program of the Wood Mountain subdivision in southern Saskatchewan.
I believe the residents who are served by that line feel that there was a commitment in the past to upgrade that line to hopper car standards. Given that a number of studies, including the PRAC and Hall Commission, have recommended that full upgrading be undertaken, and given that over $3 million has already been spent to that end, will the Minister agree to review and reconsider the status of the Wood Mountain subdivision upgrading?


John Carnell Crosbie: Mr. Speaker, I understand the Hon. Member's concern in this matter. He has been very active in making representations in connection with it.
I will undertake to review the situation to see if anything can be done because I certainly do not want to annoy the hon. gentleman.


OFFICIAL LANGUAGES
Hon. Andre Ouellet (Papineau):: Mr. Speaker, my question is directed to the Prime Minister.
Earlier, the Deputy Prime Minister tried to minimize the split in the Conservative Party about Bill C-72.
Does the Prime Minnister know that in fact some Conservative dinosaurs want to deny the Federal Government the right to promote bilingualism and linguistic minorities?
Can the Prime Minister give us the assurance that in no circumstances such amendments to Bill C-72 will be accepted?


Martin Brian Mulroney: Mr. Speaker, my friend's statement surprises me a lot. He talks about minimizing the dossier of Bill C-72 by somewhat accusing some Conservative Hon. Members of something they have not done.
But I did not make any comment, when 25 percent of the Liberal Hon. Members voted against the Meech Lake project, when 25 percent of the Liberal Hon. Members in Ottawa protested against the Meech Lake Accord, which is a real shame! I did not make any comments.
As we speak the Conservative Government is introducing historic and important amendments to enhance Bill C-72. They will be passed by Parliament, and I hope that when the Hon. member votes for Bill C-72, he will convince some of his colleagues to vote for the Meech Lake Accord.

February 23, 1988
Oral Questions


COMMITMENT OF CONSERVATIVE CANDIDATES CONCERNING BILINGUALISM-PRIME MINISTER'S POSITION
André Ouellet: It is clear the Prime Minister does not remember. He rejected an amendment moved by the Leader of the Official Opposition that would have guaranteed the promotion of bilingualism in Canada within the Meech Lake Accord.
Incidentally, I wish to remind the Prime Minister of the way one of his predecessors, Mr. Stanfield, dealt with Mayor Jones of Moncton under similar circumstances.
Will the Prime Minister have the courage to do the honourable thing and refuse, as leader of his Party, to approve the candidacy of these Conservative dinosaurs who would not accept bilingualism in Canada?


Martin Brian Mulroney: Mr. Speaker, the Hon. Member speaks of an amendment to the Meech Lake Accord moved by his leader. He is wrong. If my memory serves me right, his leader moved not one but eight amendments which would have had the effet of destroying the Accord. This is the tragedy suggested by the Liberal Party.
As to the protection of the rights of French and Englishspeaking minorities in Canada, I have no lesson to learn from the Hon. Member or his Party. We know how to protect minorities wherever they live in our country.


NATIONAL REVENUE
John Edmund Parry: Mr. Speaker, my question is directed to the Minister of National Revenue who will know that the list of communities eligible for the northern residents tax allowance excludes, on a seemingly arbitrary basis, many communities which are isolated and remote by any standard, and furthermore sets up major inequities between neighbouring communities.
In view of the patent unfairness of the regulations that his bureaucrats have put forward, will the Minister institute some rules that eliminate these divisive and destructive distinctions?


Hon. Elmer M. MacKay (Minister of National Revenue):: Mr. Speaker, my colleague raises a very timely question. He knows that indeed our Department administers this program which I think he will concede has brought a lot of tax equity to many Canadians who have not had it before. Nevertheless, he is correct that there are some anomalies in the legislation.
My colleague, the Minister of Finance, will soon be appointing a committee to explore some of the difficulties that
may exist. In the meantime we will be glad to hear representations and where there are administrative accommodations possible, we will look into them.


APPLICATION OF AMENDMENTS
John Edmund Parry: Mr. Speaker, my supplementary question is directed to the Minister. Will such recommendations be retroactive, and will they apply to communities such as Wabowden in Manitoba, 700 kilometres north of Winnipeg, or Nestor Falls where there is a four hour daily bus ride for high school students?


Elmer MacIntosh MacKay: Mr. Speaker, I think my earlier answer indicated that the matter will be checked carefully by the committee or commission that will be appointed fairly soon. As I say, if there are problems with specific communities, I invite him to give me the details. If some administrative accommodation is possible, we will look into it.


Mr. Speaker:: I should advise Hon. Members that there will be three more questions, one each for the Hon. Member for York South-Weston, the Hon. Member for Yorkton- Melville, and finally the Hon. Member for Halifax West. That will end Question Period.


IMMIGRATION
John V. Nunziata: Mr. Speaker, my question is directed to the Prime Minister and concerns convicted terrorist Mahmoud Mohammad Issa Mohammad. Reports indicate that Mr. Mohammad was spirited out of the country last night en route to London, in co-operation with the RCMP and the Canadian Security Intelligence Service. We understand further that Mr. Mohammad is on his way back to Canada. Can the Prime Minister explain exactly what is going on and whether it is the Government's intention to allow Mr. Mohammad back into Canada?


Hon. Benoit Bouchard (Minister of Employment and Immigration):: Mr. Speaker, the Government's policy with respect to Mr. Mohammad has always been very straightforward: to ensure that Mr. Mohammad leaves the country. We have initiated deportation proceedings. Mr. Mohammad's lawyers approached departmental officials last week and said that their client wished to leave the country on his own accord, and I may remind the Hon. Member that he is entitled to do so. They made their own arrangements, which included his final destination. The Government issued a Canadian ID card valid for one week, so Mr. Mohammad would be able to leave the country.
February 23, 1988

I repeat, Mr. Speaker: He left of his own accord. It seems that Mr. Mohammad, for reasons known to him and his representatives, is on his way back to Canada. Again, Mr. Speaker, that being the case, the Hon. Member should know that if a person has landed immigrant status, he has every right to return to Canada.


REQUEST THAT MINISTER MAKE STATEMENT
Lorne Edmund Nystrom: Mr. Speaker, my question also concerns Mr. Mohammad. In light of press reports this morning and this afternoon that he was on his way to Algeria via London and is now on the way back, would the Minister agree to make a full statement to the House today on this situation? Can he tell us the full extent of the involvement of the Government of Canada? For example, was the RCMP, CSIS or any other agency of the Government involved, outside of the one to which he made reference?


Benoît Bouchard: Mr. Speaker, I believe I have already explained the case. I repeat that the Government's purpose is to ensure that Mr. Mohammad leaves the country. We have initiated deportation proceedings. Mr. Mohammad expressed the wish to leave of his own accord. We facilitated his departure, always in accordance with the regulations, and if Mr. Mohammad returns to Canada, we shall proceed accordingly. Hearings on deportation proceedings were being held, and we will simply continue these hearings.


Mr. Speaker:: I indicated to the Hon. Member for Halifax West that I would recognize him. Unfortunately, Question Period has gone on too long. I will certainly recognize him tomorrow. That is the end of Question Period.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson (Etobicoke Centre) that this House approves in general the budgetary policy of the Government; and the amendment of Mr. Garneau (p. 12860).
The Acting Speaker (Mr. Paproski):: Order, please. The Hon. Member for Cape Breton-The Sydneys (Mr. MacLel-lan) has seven minutes left for debate plus 10 minutes of questions and comments. Before he commences, may I say that I hope Hon. Members will continue their conversations behind the curtain.
The Budget-Mr. MacLellan


Russell Gregoire MacLellan: Mr. Speaker, before I was interrupted for Question Period I was discussing the inadequacies of the Budget brought down by the Government, particularly with respect to the areas of this country which are undergoing economic difficulty, to those who are without jobs, and to a lot of those who are employed but who are not getting support from the Government in obtaining the type of job security they should have. I am pleased that the Minister of Regional Industrial Expansion (Mr. de Cotret) is here because a lot of this relates to his Department and the difficulty people have had in trying to follow through on what the Government has said it is going to do.
To give an example, we have the recent closure of the coke ovens at the Sydney Steel Corporation. This closure was of course directly related to the strike because they were not due to close until June. There are now another 125 men out of work in an area where the unemployment rate is 21.1 per cent, according to Statistics Canada, but where the actual rate is considerably higher.
Ten years ago those men said they wanted some kind of pension security because the coke ovens, then owned by the Cape Breton Development Corporation, were sold to the Sydney Steel Corporation. They went from a federal Crown corporation to a provincial Crown corporation. When these men, who had been at DEVCO for about 20 years, went with Sysco, they expected their pension benefits would go with them. Yet they now find that that is not the case. Men who worked for DEVCO for 35 or 40 years now have about 15 years seniority so far as pension benefits are concerned, mainly because the federal Government failed to honour its commitment to those men. This is treachery of the highest order. It is not against the law but it certainly goes against the grain and the stomachs of the Canadian public. It cannot be allowed to continue.
Of course, the country will rectify this in the next federal election but until then, the Government, particularly the Minister of Regional Industrial Expansion, should look into it once again. The steel workers have written to him about it and have not received an answer. I think the Minister should at least give them an answer on this very important question. These men remained in the same jobs, it was simply that the ownership of the ovens changed hands. Yet now they do not have seniority or their pension benefits. All they have is perhaps vacation rights.
Tom Kent, when he was President of the Cape Breton Development Corporation, promised those workers they would have their pension benefits and seniority, but that promise has not been kept. Therefore, I ask the Minister if he would be so kind as to look into this matter. As he can appreciate, it is a major concern in a very difficult time at the Sydney Steel Corporation. I hope also that the Minister of the Environment (Mr. McMillan) would look into the promises and statements he has made with respect to the commitment to cleaning the tar ponds and Muggah Creek in Sydney. The commitments

February 23, 1988
The Budget-Mr. MacLellan
that were made by the Minister of the Environment have not been kept.
Fie also referred to the workers at the coke ovens. He said that when the coke ovens would be closed, which was supposed to be in June, there would be various benefits given to these workers, including job retraining. Unfortunately, because of the strike the closing was moved up to a couple of weeks ago. Yet we have heard absolutely nothing about this job retraining. These are things that should be remembered by the Government. These are initiatives which should be included in the Budget, not only because they are important in economically disadvantaged areas but because they are initiatives that have already been talked about and, in many cases, promised.
I ask that the Government look at the question of regional disparity to ensure that the people are not misled and that there are programs. I ask the Government to do this so that people will not be wasted. There are areas of the country in which there are shortages of manpower. Yet we have people who are not being utilized to their maximum benefit. That is a crime. A person only has one life. It is paramount that the Government do what it can to make the life of each individual as meaningful as possible. That is something that the Government should keep in mind. A great part of this meaningfulness has to do with a career that a person has which is not only for his or her benefit but for the benefit of their families as well.


Mr. Stevens:: Mr. Speaker, I listened to the Hon. Member very closely. Will he share with the House any good news that he has about Cape Breton? We have heard many negative comments and yet only today I received three letters from different people on the Island, all of whom wrote about how encouraged they are because new industries are opening. The writers of these letters have pointed out that for the first time some people are showing a new confidence in that the Island is bettering its position. In short, many more people are now working.
Since the Hon. Member is from the area, will he share any thoughts on this issue? Is there not some good news from Cape Breton?


Russell Gregoire MacLellan: There is of course good news, as the Hon. Member has said. In particular I would like to mention the tax credit that was implemented when the Hon. Member was the Minister of Regional Industrial Expansion which has gone a long way to encourage new industry to come to Cape Breton. There have been some benefits derived from that tax credit. Industries have located on the Island, particularly on the north side.
As the Hon. Member will appreciate, these industries require a lengthy lead time in order to set up to begin operations. In a great many cases we are not looking for large industries. We are looking for industries with 90 or 100 jobs. They are good industries. The problem is that while we have some new industries which, hopefully, will play an important
part in the economic future of industrial Cape Breton, we are now at the point of losing jobs faster than we are gaining them.
What is happening? There will be about 35 new jobs at Magna, which will be followed by another couple of hundred new jobs in the next year, we hope. Last week the management of National Sea Products stated that it is reducing its work force at its plant in North Sydney by 100. Some 125 jobs were lost at the coke ovens just two weeks ago. A couple of years ago some 600 jobs were lost at the heavy water plant. A few hundred jobs were lost at the Cape Breton Development Corporation. The Sydney Steel Corporation, which employed 3,600 people about 10 years ago, now employs 1,200, minus the 125 jobs at the coke ovens. What I understand is that both the provincial and the federal level of Governments will mothball the blast furnace. Thus an industry that once employed 3,600 people will be diminished to 600. That is a drastic reduction in employment. The new industries coming in will not be able to replace the jobs that we have lost and are losing.


Sinclair McKnight Stevens: Mr. Speaker, I am pleased that the Hon. Member acknowledges that the tax credits have been beneficial as far as the area is concerned. I suggest that some of the grant programs have also helped. I suggest that the guarantee that will be put in place under the Atlantic opportunities approach will help as far as borrowing is concerned, particularly the interest buy-downs.
The Hon. Member has thrown out certain figures with respect to rising unemployment. While I think that each Member of the House has great concern for the type of hardship that has been suffered over the years by the people of Cape Breton, in fairness the Hon. Member should acknowledge that Statistics Canada has shown that something over
2,000	direct jobs have been created in the last three years in Cape Breton. Directly and indirectly some 9,000 jobs have been created also. When we cite certain reductions we must also weigh the positive aspects, something that I think is encouraging. I hope that it will continue. Will the Hon. Member confirm what I have been saying?


Russell Gregoire MacLellan: Mr. Speaker, I cannot confirm what the Hon. Member has said. There have been jobs brought forward as a result of incentives and through other business practices. I would not say that they have been in the order of 2,000 jobs.
Another concern I have is that a great many of the jobs that have been created in industrial Cape Breton and other areas are not full-time jobs. For instance, full-time jobs with benefits at Sysco, the Cape Breton Development Corporation, the heavy water plants, the fish processing plants and smaller industries are diminishing. Many jobs that have been created are part-time jobs in fast food industries and department stores that do not have any benefits whatsoever. These are not jobs in which people can face the future. While it is important to have them and while it is much better than not having any work at all, it still does not give any kind of structure to developing an economic base in an area such as Cape Breton.
February 23, 1988


The Acting Speaker (Mr. Paproski):: The time allotted for questions and comments has now expired. The Chair recognizes the Hon. Member for Selkirk-Interlake (Mr. Holt-mann) on debate.


Mr. Felix Holtmann (Selkirk-Interlake):: Mr. Speaker, it is indeed an honour for me to enter into the budget debate and to respond to some of the views expressed by Members on this side of the House as well as by Members opposite. 1 was glad to hear some of the comments made by members of the Opposition. They give us some indication as to the way that they see Canada and the way in which they intend to campaign for the upcoming federal election. It lets us see how they intend to make Canada a better nation, to use some of their words.
They seem to criticize the way in which Canada is going. In the next few minutes I intend to discredit their assertions that the present Minister of Finance (Mr. Wilson) has not done a good job. I can prove that he has done a very good job. I hope to do that in short order. First, I would like to refer to the Budget Speech. I will not repeat many of the things stated by the Finance Minister, but I think that he made some statements that nobody in this House can dispute.
He indicated that this country has become number one in economic growth since 1984. That is compared to the other western nations, the Group of Seven. In the past three years the Finance Minister's Budgets have had a tremendous impact on in bringing Canada into that position. Members of the opposition do not like to admit it, but they cannot deny that all indications are that that in fact has happened.
Members of the opposition Parties do not stand up and mention much about job creation. They pick a little corner here or there, but they do not talk too much about the fact that the unemployment rate has dropped since 1984 over-all, nation-wide, by some 3.5 percentage points. The opposition Parties do not want to admit that that is an improvement, and one has to wonder why. The Minister of Finance referred to
1.1	million jobs more now than there were in 1984. With some kind of mathematical genius the opposition Members state that that does not mean anything, that it has no bearing. The opposition Members and the people who support that position should look at their neighbours who are working now who were not working before. They must have great difficulty, Mr. Speaker.
Let us talk about interest rates. I recall, and so will Members who were in the House then, the early 1980s and those devastating interest rates under a Liberal regime. The reduction of interest rates has encouraged savings on a $50,000 mortgage of $1,200 per year. That is a direct benefit to Canadians. There is now a realization of that fact by the New Democratic Party. Members of that Party are now standing up and making the statement that the interest rate should be reduced by one percentage point, and that will be their
The Budget-Mr. Holtmann
platform. During the next election I can guarantee that the New Democrats will walk around this country and state, "If we get elected, we will reduce the interest rates one percentage point". What they fail to understand is that the Government has already reduced it by approximately four percentage points. In fact, that has stabilized and a whole new economy is shaping up.
In his Budget Speech, the Minister stated that "business is confident. The pace of investment has increased sharply". We do not hear the Opposition on that point. He states that "consumers are confident". 1 think that that is very evident.
I wish to indicate the importance of the private sector. The Minister made a few statements in that regard. He stated that "the driving force behind productivity, growth and job creation is a dynamic private sector". Finally, more and more we have got Government out of business and we see the private sector handling it far more efficiently and effectively.
Even the New Democratic Party of Manitoba is getting out of some public corporations because it does not know how to run them. I hope that the Member for Winnipeg North (Mr. Orlikow) hears this and hears it well. The New Democrats in Manitoba have a goose of a time running some public corporations and want to sell them. Why? Because Governments cannot do it as effectively as private business.
The Minister went on to state, "To encourage this dynamism the Government has taken far reaching measures to modernize the regulatory environment for business, reform the federal tax system, and secure markets for our exports". Those are all sound management practices, and no one in this country can avoid noting the potential growth for the future of Canada.
The Minister mentioned expanding trade. Some Members talked in a ridiculous fashion about ripping up the free trade agreement. Since then we have heard that even our trading neighbours to the south who have some difficulties with it are sure that the opposition Members, should they ever come to power, would not rip it up. They have not ripped up the Auto Pact. They would not do that. That is one form of a free trade arrangement.
One other area in the debate that I would like to enter into, and I heard some comments on it this morning, is that the Minister introduced a one cent a litre tax on gasoline. We heard doom and gloom about that increase of one cent per litre. Canadians will recall the many programs that this Government introduced that the opposition Parties condemned because the Government was not spending enough of the taxpayers' money. When the Minister had to raise a little revenue by adding one cent a litre to gasoline, the opposition Parties condemned that and stated, "How could people afford it?" I did a little calculation. If the average person was driving a medium-sized car and burned one tank of gas a month, some might burn more, some might burn less, that is about 50 or 60 litres. That is 50 or 60 cents a week. That adds up to perhaps $30 a year of additional revenue from Canadians, which is

February 23, 1988
The Budget-Mr. Holtmann
certainly not a tax grab. I wanted to point out those few facts when I referred to the Budget of the Minister of Finance.
I would like to mention what is really important, and what Canadians do not always have the opportunity to examine, which is the Auditor General's report on how Canada is doing financially. We do not hear the opposition Members on this issue very much. One wonders why. One can find the Auditor General criticizing the Government. That is his job. One can find the Auditor General praising what has happened.
I ask any Member who opposes this Government to compare the Auditor General's reports of the last three years with the previous fifteen years. The Hon. Member for Winnipeg North might want to consider that. I will refresh his memory. The Hon. Member has been here a long time, and it must have shaken him to see the manner in which the Government spent money in the past, although he supported the Government of the day at almost every chance he could.
Let us take a look at what the Auditor General said in March, 1987, in his last report. I have here some selected statements from both sides. He stated, "It is a record of solid progress in managing the machinery of Government". That is something that I do not think one could find in an Auditor General's report in the 15 years prior to 1984. He went on to state, "When money had been expended other than for the purposes for which it was appropriate or without due regard for the economy and efficiency", he had some criticism. That is fair, because that is his job.
The most important point to Canadians in our effort to be an efficient Government, to create a climate for new jobs and businesses, is what he has to say about financial control. I wish to read that paragraph which states:
Our study finds that there have been significant improvements made in financial controls. The government now has systems and procedures that provide essential financial controls. Departments have corrected the fundamental weaknesses identified in the 1970s.
Do the Members here remember the 1970s? I am sure that they do.
With expenditures by our federal government exceeding $100 billion a year, protecting the public purse demands that the correct amounts be paid out to the intended recipients at the right time. A decade ago the Auditor General could provide no assurance that this was happening.
Are you listening out there? A decade ago the Auditor General could not give any Canadian assurance of the recklessness with which the former Liberal administration spent its money. It is plain. It is in black and white, and he now has a better feeling. "Today I can do so", he goes on to say, "the essential framework is in place. With some exceptions, financial controls are now working well".
There is one man in the House of Commons, the Hon. Minister of Finance who brought that back under control. I think he deserves a lot of credit for doing just that.
We have heard over countless past months ridiculous statements by Hon. Members opposite indicating, whenever the Government took an initiative, that it was never enough. The mentality over there is still one of spending without consideration of where the funds come from. I can prove that by referring to what some of those Members have said. As a matter of fact, just yesterday the Hon. Member for Regina West an honourable member of the New Democratic Party, had something to say about the Budget. I think Canadians want to know just where the New Democratic Party stands, and I think this long-term Member has expressed it in a way that would shock everybody. I would like to repeat part of his statements to the House. He said the following about Governments:
We have always operated on the basis that every Government goes into debt most of the time,-
Can people imagine that a Government should automatically operate on the premise that it is going to be in debt, in the hole, broke? Is that what is their desire? A New Democratic Party spokesman said exactly that: "We believe that we should maintain the debt of the country, the debt to Canadians no matter where they are living", so that their children and their children's children some day will have to figure out how to pay for it. That is their philosophy in black and white. The Hon. Member went on to say:
-we still say-that a nation has different kinds of debts. There is constructive debt-
My God, Mr. Speaker, he is classifying debt as dandy, constructive, and self-liquidating. It is a beautiful word, this debt package which evolved under the Liberals with the support of the New Democratic Party! We happen to have a Minister of Finance who is starting to clean up the waste in ridiculous government spending, and they criticize it.
Let us see what else the Hon. Member said:
The Government had the opportunity to provide at least half a billion dollars a year more in housing of all kinds-
The very first thing the Hon. Member from the socialist Party said is that we should have spent another half a billion to a billion dollars on housing. That would have driven up the deficit some more. He went on to say: "even if it meant increased borrowings"; that is right, that we should just borrow some more money. If the people who are watching this program were even to think of electing a New Democratic Government, I assure them that he was very narrow in his idea of borrowing. He would have tripled that amount if he had ever got into power. He went on to say: "it is not a debt really but an investment". Is that not interesting? According to him, Governments should borrow billions and billions more dollars as an investment. That does not indicate an understanding of the previous billions of dollars that were borrowed and who should pay them back. Who should pay back this wonderful investment and, this wonderful investment that we borrowed, does it ever depreciate? I suppose it appreciates and they can find a theory for that as well.
February 23, 1988

Elere is an idea: "we could put 100,000 young people to work starting yesterday with a few hundred million dollars a year". We could go out there, talk to the banks, and borrow a few hundred million dollars, and we will get a few hundred thousand young people working. Is that a great idea? He went on to say:
There are tens of thousands of needed necessary projects in the plans and
desires of municipalities-
There we go again-let us borrow a bunch of money and give it to the municipalities regardless of who has to pay for it!
The Hon. Member for Regina West also got into his own area. Imagine this individual. He said:
In my own area of transportation, we need to invest $500 million to $1
billion-
It would be half a billion to a billion dollars just for the Hon. Member for Regina West. That is his idea of running the country, down the road. For his little neck of the woods he needs a billion dollars. My goodness, I really wonder where it will lead to.
He had some criticism, which I think was a little unfair, of the Minister of Finance. He said that he would not even let him run his chicken coop. I think, if the Hon. Member were in the House, that I could assure Canadians that no former railroader would become the Finance Minister, especially one from Regina West. He has a lot to think about after making the statements which he made in the House yesterday on what Canada ought to be doing and the way he perceives his Government would run it should they ever gain more than 30 seats in the House of Commons.


Jack Harris: We have 32.


Felix Holtmann: Then he started dividing up Canada and said:
-there is more to Canada than Toronto and parts of southern Ontario.
He did not have to tell everybody in Canada that. We know that from where I come, and the Hon. Member for St. John's East (Mr. Harris) knows that. He did not have to have one of his front-benchers tell him where the other parts of Canada were.
He also talked about unemployment and said that it was high everywhere else but there. It was not necessarily because the Hon. Minister of Finance is from Toronto or in fact dumped all this money into Toronto. I think it had a little to do with the auto industry and the growth of that industry. That in fact helped-


Steven W. Langdon: In Toronto?


Felix Holtmann: I see the Hon. Member wondering how the auto industry could help Toronto. He had better take a little lesson in economics and realize that a lot of corporate headquarters are there and that a lot of businesses which finance the auto parts manufacturing sector could even be in Toronto.
The Budget-Mr. Holtmann
However, let us go on. Listen to this one, Mr. Speaker. Getting back to lowering interest rates, he said:
As far as I am concerned, I don't particularly care what the value of the
Canadian dollar is compared to the U.S.-
There is a fine statement from a New Democrat! He does not care where the Canadian dollar is. He should look at the Mexican peso; it takes about 2,600. I suppose, if he ever saw that happen, he would not care about the value of the Canadian dollar and how devastating it is when the dollar sinks, inflation sets in, and there is a tremendous backlash. Here is a Member who would like to maintain and help his Party become a force in Canadian politics beyond the 30 seats they have today.


Steven W. Langdon: There are 32. You still can't count.


Felix Holtmann: It is really shocking, and I am going to tell more Canadians about their problems.
All of a sudden he made the following statement:
The Government needs more revenues to reduce the deficit.
Now the Government, all of a sudden, after he has added about $20 billion to $30 billion to the deficit in his speech, needs more revenues. I will tell the House what he decided. He decided that the Government would just go back to those corporations which, I think it was about three elections ago, they called corporate welfare bums. That is what they called them. In the last election they sort of dropped that because it was not working in their favour, in that a lot of these corporations were actually leaving Canada under the then administration and in fact were going broke altogether and they did not know what to call them at that time.
I see you signalling that I have three minutes remaining, Mr. Speaker. I would like to deal with another thing which was said by the Hon. Member for Regina West. He thought that an idea for finding revenue would be to put an export tax on energy resources from Canada. I suggest that he go to the Hon. Premier of Manitoba who would like to sell a lot of hydro power and suggest that he start taxing it as revenue on behalf of the federal Government. Even the Hon. Member for Winnipeg North would have a great deal of difficulty trying to sell that to his constituents, especially in view of the fact that they would like to export a lot of energy from the Province of Manitoba and that they are having a lot of difficulty doing it, as it is.
I will add something else which I think people ought to know about what a New Democratic Party could do and has done in Manitoba. They are going to follow the same lines as the federal New Democrats because they are married in harmony. The Province of Manitoba was not a "have-not" province; certainly some years ago it was a fairly successful province. It is finding itself at the low ebb of the provincial scale and is moving itself into such a desperate situation that in fact the province is in bad financial trouble. If I could just quote this, it says, "The Pawley Government has increased taxes by three times the rate of inflation since taking office". Will people ever

February 23, 1988
The Budget-Mr. Holtmann
know the truth? The socialist Government will increase taxes to the point where they will not be able to see what is to happen to them. The Hon. Member indicates that he wants to hear no more of this because he is afraid of what it will do to Canadians. 1 can assure you, Mr. Speaker, that the Opposition, especially the Liberals when in office, would have given their eye teeth-my goodness, they would have given their false teeth-to have a Finance Minister do the kinds of things he has done.


The Acting Speaker (Mr. Paproski):: I believe there will be some questions and comments for the Hon. Member.


David Orlikow: Mr. Speaker, I would like to direct a question to my friend from Manitoba. He criticizes former Governments because of the debts which they accumulated, and says that deficit financing is bad. I point out to him that in the period in which this Government will be in office, in which this Finance Minister will have brought down four or more Budgets, the debt of this country will have increased by more than $100 billion.
When we pass this Budget, the average family of four earning $35,000 a year will pay, because of previous increases in excise tax, sales tax, income tax, $1,000 more this year than they paid in the year in which the Conservative Government came to power. The only people who will not pay more tax, in fact who will pay less tax, are the high income people. 1 point out that over 250,000 Canadians who had income of over $200,000 a year in the last year for which we have information paid no tax at all. We have a large number of corporations which paid no tax, and 1 will give a few illustrations. Alcan Aluminum in 1986 had profits of $220 million and did not pay a cent in taxes. In fact, Alcan got a tax credit. Xerox in 1986 had $150 million in profits and got a tax credit. In other words Xerox paid no tax at all. Union Carbide in 1986 had profits of $28 million and paid no tax. Bramalea Consolidated in 1986 had profits of $51 million and paid no tax. Is that the Budget the Member wants the people of Manitoba to accept, a Budget in which they pay $1,000 more for each family than they did when this Government took office while the wealthy individuals and corporations pay no taxes at all?


Felix Holtmann: Mr. Speaker, I appreciate the question from the Hon. Member for Winnipeg North (Mr. Orlikow). He made the statement that since our Government came to power, the deficit has risen by an additional $100 billion. He is absolutely correct. 1 do not think the Government denies that. But we have changed the trend. Had he and his Liberal friends been in power-because they were in power together-the deficit would have been $400 billion to $500 billion by now.


Lorne Edmund Nystrom: Oh!


Felix Holtmann: They say "oh". But they supported the principle of that kind of spending escalation. The New Democrats have still not made the point that they are not
prepared to reduce spending but tax more. You cannot tax yourself out of a deficit. If they think you can, let them go back to the Province of Manitoba which is trying desperately to do that. The per capita revenue by a New Democratic Government in Manitoba in 1982 was about $2,117. What did the NDP Government do in the Province of Manitoba? It increased the per capita revenue by almost $1,300 per person. The NDP Government is still running the deficit higher and higher at a far greater rate than the federal Government is. As a matter of fact, in the Province of Manitoba, if Canadians are interested, the second highest expenditure by that Government is that of paying the interest on the deficit.


Lorne Edmund Nystrom: Same here.


Felix Holtmann: No, sir. That is not the situation. Had we allowed the deficit to creep up at the rate it was going under the previous administration, no one denies the fact that it would not be $100 billion more but $400 billion more. That is the point which never seems to get home to those people. You want to stop the ridiculous spending of government, Mr. Speaker. The Opposition says, "Well, just tax more". Another member of the NDP says, "Spend more"; tax a few corporations". Let us see if he is right. According to the Hon. Member for Regina West (Mr. Benjamin) he figured he could find $3 billion instantaneously from those corporations which the Hon. Member for Winnipeg North suggested, by taxing corporations. How in the dickens can he do that and spend $10 billion or $20 billion when the Member for Regina West wanted $1 billion for his own riding alone? That is the point. Which way do the New Democrats want it? Do they want to spend 10 times as much money as this Government and collect a few extra billion dollars worth of revenue from these few corporations? I agree with the Member that they should not get away without paying taxes, but that will not solve the problem.


Steven W. Langdon: Mr. Speaker, I just want to report having listened yesterday to the Leader of the Conservative Party in the Legislature of Manitoba take two positions and hold them at exactly the same time.
The first position said that it was necessary to spend in the last election campaign the extra reserves of Autopac to bring down rates because rates were too high in Manitoba. Yesterday he turned around and said no, that this was a serious mistake, the reserves should have been held and kept in check so that it was not necessary to keep the soundness of that program by seeing an increase in rates, an increase which is now sensibly going to be phased in over a reasonable period of time.
My question to the Member is a very simple one. It is a question which any economist would ask and which any normal person in the country would ask. What have we done in this country or what has Manitoba done compared to other provinces and what have we done compared to other countries? Our unemployment rate in Canada is 8.1 per cent. In the United States it is 5.8 per cent, far, far lower. We have in Canada not a successful situation but, in fact, a gap between
February 23, 1988

the two countries which is greater historically than it has been since the Great Depression.
Can the Member tell me precisely what the unemployment rate is in Manitoba compared to that in Canada? The rate is, of course, much lower than in the rest of Canada. It has consistently been much lower than in the rest of Canada under the Government of Mr. Pawley, and that demonstrates the effective, businesslike, sensible and caring administration which has marked that province.


Felix Holtmann: Mr. Speaker, first, I would like to congratulate the Member for coming to the Province of Manitoba, spending some time in our provincial legislature and finding out just how precarious the present Government is with only a one seat majority that likely cannot last very long especially if one of the maverick back-benchers has his way.
Let us get on to the subject at hand. Right now the statistics indicate that the unemployment rate in Manitoba is almost a percentage point less than Canada's average of 8.1 per cent to Manitoba's 7.4 per cent, I believe. The Member is right. Those are the latest statistics. They might not be totally accurate, but the figure is somewhere around there.


Steven W. Langdon: Six per cent.


Felix Holtmann: No, no, it just came out today, I am sorry. It is 7.4. At least that is the last information I have. He may have heard it differently.
Let us get to the point. The Hon. Member mentioned that the United States traditionally has a significantly lower rate of unemployment than we have here in Canada. Yet he opposed every Reagan proposal and every capitalist idea from the country to the south. His Party turned against all that as a policy and would not want to emulate it. However, today he is saying that maybe we should be doing something the United States is doing. Where is the logic there? Either he likes what they are doing in the United States or he does not like what they are doing in the United States, but he should not start comparing their unemployment rate with Canada's if he does not like the administration there and the way it is bringing that about.


Steven W. Langdon: But we are much higher than they are in unemployment.


Felix Holtmann: That is right, but where were we four years ago? I think the Hon. Member will have to acknowledge that we have brought the unemployment rate steadily down. Maybe it is not acceptable to him, and I can assure him that it is not acceptable to us either. We do not argue there.
If anyone in his Party thinks he could come to power and bring the interest rate down to 2 per cent in four years, I think he could get elected tomorrow, but no one believes that. It has been proven by previous socialist administrations that that is not likely to happen. That is the point the Hon. Member ought
The Budget-Mr. Orlikow
to think about, not the fact that the United States is doing better than we are. I think we ought to congratulate the United States for that and trade with the Americans more. Perhaps we should open up our borders in the way we are planning on opening them up to reduce the unemployment rate in Canada to a more acceptable level. We have never denied that goal, and I am glad the Hon. Member has focused on it now.


Lorne Edmund Nystrom: Mr. Speaker, during the heckling, the Hon. Member across the way said that the second largest expenditure item in the country was not servicing the public debt. I would like to refer him to the Main Estimates, Part I. The biggest expenditure item is social development with 45.5 per cent of expenditures. The number two item is the public debt which amounts to 24.6 of our expenditures. When the Tories came into office, it was some 20.6 per cent. I would like the Hon. Member to correct the record because I know he would not want to mislead the people of Canada. This is by far and away the number two item. In fact, the number three item is way down at 10.3 per cent, economic and regional development.


Felix Holtmann: Mr. Speaker, I did not have the selective piece of literature in front of me that the Hon. Member had. He might be correct that it is number two rather than number three as I had indicated. He happens to have a piece of literature that I do not have, and that is fair.
I think the point is made that a change in government will not necessarily automatically change the direction this country is taking unless it starts spending more money. The intention of Members opposite is to spend more money. NDP Members have proven their ability to spend far more than the Government has, and I think Canadians are cognizant of that. They want us to be very prudent and careful with how and where we spend this money and not just find it by automatically taxing a few corporations. Clearly there will never be enough to cover the amounts the NDP would like to spend on the various projects this Government announced.


David Orlikow: Mr. Speaker, almost a year ago, on March 16, 1987, speaking in the House, the Prime Minister (Mr. Mulroney) made the following statement:
We are in the process of building two Canadas, one which is rich and
promising and one which is underdeveloped and underemployed.
The Budget we are debating today simply accelerates the process described by the Prime Minister, the process of making disparities between the rich and the poor even more apparent.
Let me, for the benefit of the Hon. Member for Selkirk- Interlake (Mr. Holtmann), put on the record some of the results of Tory Budgets. An average family of four earning $35,000 per year annually will pay $1,000 more in taxes this year than it did in the year the Conservatives took power. Until this Budget, that amount was $1,400 per family, but the Minister of Finance (Mr. Wilson), realizing that we are coming closer and closer to an election, has in this Budget

February 23, 1988
The Budget-Mr. Orlikow
given back $400 of the $1,400 in taxes he had imposed on ordinary families until this year.
The only people in Canada who will benefit from this Budget, the only people who will pay less tax than they have paid until now, are the very few wealthy people at the top. According to the Government's own estimates, fully one-quarter of non-taxpayers, almost 9,000 in the last year for which we have records, will still go untaxed. Over 250 Canadians who had incomes of more than $200,000 and who paid no income tax in the last year for which we have records will continue to be able to pay no income tax.
At the same time as we sock it to ordinary Canadians and give tax cuts to the wealthy, the same situation is occurring in respect to Canada's largest, wealthiest corporations. In 1986, Alcan Aluminum made $220 million in profits and paid no tax at all. In fact, it got a tax credit. In 1986, Xerox Canada made a profit of $115 million and got a tax credit of over $10 million. In 1986, Union Carbide of Canada made a profit of $28 million and paid no taxes. In 1987, Bramalea Consolidated made $51 million in profits and paid no taxes at all.
I want to talk about some of the problems which this Budget ignores completely. First I would like to quote from the preamble of the 1966 Canada Assistance Plan legislation, legislation which was endorsed by all Members of Parliament from all political Parties which were represented in the House at the time. The preamble reads:
-the provision of ADEQUATE assistance to and in respect of persons in
need and the prevention and removal of the causes of poverty and dependence
on public assistance ARE THE CONCERNS OF ALL CANADIANS-
The Canadian Council on Social Development points out in its analysis of the budget proposal brought forward which we are now debating that there is no provision in the Budget for increasing help to Canadian families living below the poverty line although the number of such people is now 851,000, up from 745,000 in 1980. That is the situation.
If one spends a little time in any city in Canada, from Newfoundland on the East Coast to Vancouver Island on the West Coast, one sees that the number of people who are so needy and desperate for help, the number of people who appear regularly at food banks operated by churches, native organizations and community organizations, is increasing rapidly from week to week. The number of charitable organizations which are handing out used clothing is increasing very rapidly. We are going back to the situation in the 1930s which most Canadians thought we would never experience again. Tens of thousands of people are having to depend on charity to meet their basic needs.
We have asked the Government to deal with that. We have asked the Government to meet with the provincial Ministers who deal with welfare and, if necessary, make studies which will indicate very clearly that the level of assistance paid to
people in need is far below that which is needed for them to live with some dignity and in some comfort.
I have done this in Winnipeg. I know of the work which is being done by organizations such as the Stella Mission, Rossbrook House, the Salvation Army, and many other organizations. They tell anyone who talks to them that they do this because there is a need. Without exception, people throughout the country who are involved in such charitable works agree that they are doing this because the need is there, but they think it is a disgrace that in a country as wealthy as Canada charity is needed on an increasing scale.
None of these problems have been dealt with by the Government. The economies in most western industrialized countries have improved and unemployment in Canada is down, as it is in the United States. However, except for the unemployment levels in Ontario and parts of Quebec, unemployment levels throughout the country are as high now as they were when the Government took office.
It is not only the poorly educated and the illiterate who are unemployed. Skilled workers and people who had highly paid jobs in financial institutions are now unemployed. In eight of the ten provinces unemployment is still high and indeed in parts of the two provinces in which employment has grown the fastest there are still crisis situations. Northern Ontario and most of the Province of Quebec east of Montreal still have unemployment rates which are completely unacceptable.
What has the Government done about this? It has failed to ensure that our social programs keep pace in terms of increased funding with the rate of inflation.
The federal Government has refused to deal realistically with the federal minimum wage which has been frozen for some years at $4 an hour. That rate is the second lowest in Canada while it was once almost the highest. People who work for $4 an hour, even if they work full time, still live in poverty. The Government, which has been so generous to our major corporations and to a very small number of very wealthy Canadians whose incomes are very high, has partially deindex-ed many of the social programs which were built over almost 50 years. The Government has partially deindexed the family allowance, the child tax credit, and the income tax brackets.
The Government is happy to do this because it really believes that the state should do less for the people of Canada rather than more.
To certain people on the right, and that includes almost all the Conservative Members of Parliament, cut-backs in social services are necessary to diminish the expectation of ordinary people of what government should do. The Government wants to keep working people docile for whatever jobs and working conditions are provided. We have, therefore, seen a tremendous increase in the number of people who work part time. When you work part time, of course, you do not get benefits such as holiday pay, unemployment insurance, and pensions,
February 23, 1988

which full-time permanent employees have come to expect to receive in their total wage packet for the work which they do.
We believe that one of the greatest challenges for our Party is to reverse these policies of neglect and uncaring and restate the purpose of our society so that all Canadians can legitimately expect to have jobs, adequate housing, and an education which will permit them to meet their needs and the needs of the country throughout the rest of the 1980s and the 1990s. There is nothing in this Budget which gives us any assurance that these objectives will be met.
I want to deal specifically with one of the major failures of the Government. In	the	first Throne Speech brought forwardby the Government	in	1984	there was a	promise that theGovernment would	make a	major effort	to deal with thedisastrous situation	of	fully	20 per cent	of the people of
Canada being functionally illiterate. Hundreds of thousands of Canadians who are in the labour force or will be entering the labour force in the next few years do not have the education, knowledge, or ability to fill the jobs which are and will be available. These jobs will require a great deal more education than was required years ago because of the tremendous changes in technology which require a much more well educated workforce than we have had.
Numberless studies have been done about the situation of the tremendous number of Canadians who are functionally illiterate. To those studies we can now add a study commissioned by a business task force on literacy which operates out of the City of Toronto and which tabled a report several weeks ago which confirmed the finding of earlier studies that a fifth of Canadians are functionally illiterate. According to them, it is costing $10.7 billion a year to permit this terrible situation to continue. In fact, they calculate that of that $10.7 billion, $4.2 billion is the cost to business through industrial accidents, lost productivity and training expenses.
The Government promised in its Speech from the Throne after it was elected that it would take major steps to deal with this problem. A few months ago, at the National Conference on Scientific Research and Technology in Toronto, the Prime Minister reaffirmed that pledge. The Secretary of State has made similar statements.
However, when we look at the record we see that the Government has only given us more talk and no action. There are groups in every province in Canada working with people who are functionally illiterate. To a large extent, these are people who grew up in rural areas, native people and new immigrants. While they are attempting to help tens of thousands of these functionally illiterate people, the fact is that there are five million people in Canada who are functionally illiterate. There will be terrible consequences for this country in the near future if that situation is permitted to continue.
Canada is entering an era when the number of people entering the labour force will decline each year, yet there will
The Budget-Mr. Orlikow
be difficulty filling those jobs due to the increasing number of functionally illiterate people. All we have from the Secretary of State is talk and good will, but no money.
The record of the Department of Employment and Immigration, which was poor under the Liberals and is poor under the Conservative Government, is even worse. The Department has spent only a very small percentage of its total expenditures to train illiterate people simply because such a program does not bring quick results in terms of job creation. Instead, it has taken the easy route by training those already literate to become welders, machinists or computer operators because such jobs will be available soon after training is completed.
The Department has not faced up to the fact that if it does not help people overcome their illiteracy, it is condemning those people to live on welfare, unemployment insurance or accept the poorest, lowest paid jobs available. The then Liberal Government should be condemned for such an approach, and the Conservative Government should be condemned for continuing that policy. There is a major crisis on our hands in this country.


The Acting Speaker (Mr. Paproski):: I regret to interrupt the Hon. Member's speech, but he is now four minutes over his allotted time. I am sure there will be questions and comments from some of his colleagues and he may have a few extra minutes to respond.


Jack Harris: Mr. Speaker, does my colleague believe that the Government knows the meaning of disparity in this country? Hon. Members on that side of the House brag about the reduction of unemployment. However, we know that economic cycles come and go.
When we are talking about regional disparity in Canada, we are talking about the difference in the national rate compared to the provincial rate. For example, in 1949, before Confederation, Newfoundlanders earned, per capita, almost 49 per cent of the average Canadian income. Last year it was 55 per cent, so that we have seen a narrowing of the disparity by 6.7 per cent in 38 years.
At that rate, it will be another 250 years before Newfoundlanders earn the same per capita income as the national average. That is what we mean by disparity.
The gap in the unemployment rate in Newfoundland compared to that in Canada is very large. Will the Member comment on the fact that the attempt to narrow the disparity in this area has not been successful? Does this Budget make any real commitment to change that?


David Orlikow: Mr. Speaker, most Canadians know about the disparities. Most Canadians know that in eight of the ten provinces the rate of unemployment is just as high as it was when the Government took office.
The Member for Selkirk-Interlake was proud of the reduction in the rate of unemployment. Of course we agree, but Conservatives do not admit that there are still over one

February 23, 1988
Adjournment Motion
million unemployed. There are many areas in this country where people still live in poverty. A good example is Selkirk- Interlake represented by that Conservative Member who is so proud of the Government. Fie criticized government deficits. If we have to keep the deficit down, there will be no money for the native communities in his constituency who live in such deplorable housing.
We have to face up to the tremendous disparities in incomes and services between wealthy parts of Canada such as southern Ontario, and the rural or isolated areas where there is not only a tremendously high rate of unemployment but where services, whether it be education, health or anything else, are still deplorable and disgraceful.


Margaret Anne Mitchell: Mr. Speaker, I was very interested in my hon. colleague's comments, particularly with respect to the question of illiteracy. I know he is very concerned about those who have been unemployed because of this handicap. I wonder if he has any comments to make with respect to prevention.
I know that when the Special Committee on Child Care toured the country we heard over and over again that there are ways, involving a relatively small investment and by starting with children at the pre-school level, of preventing much of the dysfunctioning which occurs later in life. I am thinking particularly of the Head Start program which has been very successful in the U.S. Research has shown that children from disadvantaged homes, where perhaps their parents were illiterate, were helped to function much better and make much better use of school after having been involved in these enrichment programs. As a result, when they got to be teenagers there was a much lower rate of adolescent problems. They stayed in school longer, there were not as many teenage pregnancies or drug abuse. It seems to me that is an area of great importance and it would require an investment of only a small amount of money. Yet the Government seems to be looking for every means possible to delay in getting on with the child care program which should include enriched programs of this kind.


David Orlikow: Mr. Speaker, there is no question that some other countries, such as the U.S. with its Head Start program, and Sweden, Denmark and West Germany, have had a great deal of success in overcoming problems such as illiteracy with programs designed specifically to help people in difficulty. I agree completely with the Hon. Member that one of the best things we could do would be to improve our child care system. We should have a day care system which would not only help young children begin to learn to read and write, but which would permit their parents, particularly in the single-parent families, to work or improve their education, or get training in fields with employment prospects. Of course, all these things can be and should be done but we have a Government intent on reducing the deficit and it is just not prepared to move on any of these ideas.


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



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Paproski):: It is my duty, pursuant to Standing Order 66, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the Hon. Member for Scarborough West (Mr. Stackhouse)- North Atlantic Treaty Organization-Arms gap between NATO and Warsaw Pact nations; the Hon. Member for Trinity (Miss Nicholson)-Amount of tax collected by Government-White Paper sales tax projection; the Hon. Member for York East (Mr. Redway)-Canada Mortgage and Housing Corporation-Shortage of affordable housing in Toronto.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson (Etobicoke Centre) that this House approves in general the budgetary policy of the Government; and the amendment of Mr. Garneau (p. 12860).
Mr. John Reimer (Kitchener):: Mr. Speaker, I count it a privilege to add a few comments to this budget debate. I would like to go through what has taken place, comparing it with where we have been in the past, and also take a look at the economic indicators as they reflect the performance of the previous Liberal Government and the present Government.
When this Government was elected to office three and a half years ago the biggest challenge facing us was to restore fiscal responsibility and then create a climate for a more dynamic, flexible, innovative and competitive economy, and to create jobs. The challenge was a large one, to say the least. The federal deficit and national debt were out of control. Between 1981 and 1984 the deficit escalated from $14.9 billion to more than $38.3 billion. The national debt had doubled and was growing at an average rate of 26 per cent per year. Likewise, government spending was out of control.
In the four years prior to our coming into office, government spending on programs had increased at an average annual rate of 14 per cent, far in excess of inflation and enough to double spending in about five years. If this trend had been allowed to continue, the result would have been catastrophic. The public
February 23, 1988

debt would be $100 billion more than it is now, with the inevitable outcome of higher interest rates, fewer jobs, less growth and declining economic confidence.
Knowing that Canadians did not want to leave their children and their grandchildren a legacy of crushing debt, it was crucial that this Government act. Therefore, in November of 1984, barely two months into our mandate, this Government set forth a long-term economic plan in its economic statement. In the three and a half years since, and in each subsequent federal Budget, we stuck to this plan, convinced that it is the only way to fiscal stability and renewal. That is why we have, for example, since our first opportunity to tackle expenditures on April 1, 1985, reduced spending to an average annual rate of increase of 4.9 per cent. That contrasts sharply with an average of more than 15 per cent in the preceding 15 years under the Liberal Government. In fact, when one excludes public debt charges, we are looking at an average annual increase of 3.7 per cent under this Government, less than the rate of inflation. Compare that with the 14 per cent under previous Liberal Governments.
The contrast is even more dramatic when compared to the 23 per cent average annual rate during the current Liberal leader's term as Minister of Finance in the Trudeau Government from 1972 to 1975. When one looks at what took place during that time we find that a $481 million surplus was turned into a $4 billion deficit. The gross national debt grew by 50 per cent. Debt service costs grew by 85 per cent. Inflation doubled from 5.1 per cent to 10.6 per cent. Total unemployment climbed by 164,000. The Bank of Canada rate rose by 4.25 percentage points. If we tried to match that rate of expenditure growth we would be spending $226 billion in the coming fiscal year instead of $132 billion. That would be enough to push the annual deficit to $122 billion instead of the $28.9 billion for the fiscal year in 1988-89.
One need not take my word for these figures. With respect to the Right Hon. Leader of the Opposition's tenure as Minister of Finance the Auditor General said that he was:
-deeply concerned that Parliament, indeed the Government, had lost or
was close to losing effective control of the public purse.
He then went on to say:
Federal management and control in the Government of Canada is grossly
inadequate.
However, in commenting on the first two years of this administration the Auditor General said that his sense was that there is an interest in better accountability and better management. He then went on to say that he believed "Members of Parliament and the taxpayers of Canada should be heartened by genuine improvements".
Under the leadership of the present Prime Minister (Mr. Mulroney) and the Minister of Finance (Mr. Wilson) we have implemented a more fairer tax system which encourages growth and job creation and which creates a system that
The Budget-Mr. Reimer
assists our businesses and our industries to compete in the world.
We have entered into an historic Canada-United States trade agreement in order to build a more open and adaptable economy. It will protect our high level of trade with the United States which comprises some 80 per cent of our exports, close to 90 per cent of the exports of Ontario. It will protect close to three million Canadian jobs that are involved in our trade with the United States.
We have implemented priority programs to assist regions and sectors hurt by unexpected developments in world economy such as the programs we have implemented for our farming community.
We have privatized 13 Crown corporations. We have deregulated energy and transportation sectors in order to reduce government intrusion into the market-place.
We have removed the ruinous National Energy Program.
We have opened financial markets to global opportunities and stimulated greater competition in financial services.
We dismantled FIRA and created Investment Canada to encourage and welcome investment capital from abroad, investment that is now creating jobs for Canadians.
Permit me now, Mr. Speaker, to look at the outcome of the Government's economic agenda. The international and national economic indicators speak for themselves. Among the seven major western countries in the G-7, Canada has been first in economic growth since 1984. We are first in employment growth in the G-7. On the domestic front, since the Government came into office, for the first time in the post-war period the deficit has declined four years in a row. More than
1,158,000	jobs have been created and 85 per cent of those are full time. The unemployment rate has fallen by 3.6 per cent to
8.1	per cent in January of this year. Youth unemployment has dropped from 18.3 per cent to 12.7 per cent.
The Bank of Canada interest rate has fallen by 3.76 percentage points. The chartered bank prime rate has fallen by 3.75 per cent. Direct foreign investment has doubled between 1984 and 1987. Housing starts and consumer spending are up 43 per cent and 37 per cent respectively since the last election. The inflation rate has been in the 4 per cent range for three consecutive years, which is the most stable price environment since 1971.
Economic growth in my own province, the Province of Ontario, has been nothing short of spectacular. Since the last election 547,000 jobs have been created, with the unemployment rate falling from 9.4 per cent to 5.6 per cent. Housing starts and retail sales are up by 122 per cent and 41 per cent respectively. Help wanted ads are up by 182 per cent compared to a 34 per cent decline during the Liberals' last mandate. In recent months in my constituency of Kitchener we have had either the lowest or the second lowest unemployment rate of any major Canadian city. Indeed, in December of 1987

February 23, 1988
The Budget-Mr. Reimer
the unemployment rate reached an incredible low of 2.9 per cent.
Let me look at what the Liberals and the NDP have been saying in all of this. What has been their response to the Government's economic agenda? In 1984, members of both the Liberal Party and the NDP said that our economic statement with its spending cuts would cost Canadians between 125,000 to 150,000 jobs. Later they said about the May 1985 budget that it would cost 150,000 jobs. In fact, while the Liberals and the members of the NDP have been predicting doom and gloom, some 1,158,000 jobs have been created. So much for the credibility of their statements compared to the facts and what has actually happened.
Indeed, if their voting record is any indication they have been doing everything possible to obstruct Canada's recent economic upswing. For example, both the Liberal Party and the NDP voted against the repeal of the disastrous National Energy Program. They voted against the dismantling of FIRA and increased foreign investment through the creation of Investment Canada. They voted against increasing the total amount of money that may be lent under the Small Businesses Loans Act. They were against the privatization of Teleglobe Canada, the sale of which has resulted in significantly lower rates for overseas telephone calls.
Further, the NDP voted against $456 million in additional funding for regional industrial expansion. It also voted against a legislated end to the postal dispute, the railway strike and the grain handlers' strike.
It is no wonder then that an article in the January 30, 1988 edition of the Calgary Herald is not alone in its estimation when it stated, "On the policy front neither the NDP nor the Liberals can compete". In that same month The Globe and Mail in an editorial column contrasted the solid achievements of the Government with the lack of any clear alternatives from either the Liberals or the NDP.
The Government's policies are right. They have been working. This latest Budget indicates that we are committed to making sure that they continue to work. Indeed, it is precisely because of the dramatic economic growth which has resulted from these policies that the Government has been able to make a strong commitment to some new programs. A case in point are the Government's various child care measures.
In December of 1987 the Minister of National Health and Welfare (Mr. Epp) announced the Government's national strategy for child care. This policy will produce an additional
200,000	quality child care spaces over the next seven years. The Budget moves to implement the tax initiatives that are a part of this strategy. The initiative is also of great importance to Canadian families. It will help to eliminate a barrier to many women who work or who want to work outside the home. It is also a flexible program in that it also increases tax assistance to many who choose to work in the home.
As a part of the national child care strategy the maximum child care expense deduction will be doubled to $4,000 from $2,000 for children six and under and for all children with special care needs. For those not having receipted child care expenses a supplement to the refundable child tax credit of $100 in 1988 and $200 in subsequent years will be paid on behalf of each child six years old and under. The supplement will be prepaid each year on the same basis as the refundable child tax credit.
Likewise we are also ensuring jobs for Canadians in the future through our commitment to science and technology. At the National Conference on Science and Technology and Innovation in January the Prime Minister announced $1.3 billion in federal funding for the new science and technology activities over the next five years. These will include a national program of centres of excellence on university campuses and a program of Canadian scholarships in science, engineering and related disciplines.
The National Advisory Board on Science and Technology chaired by the Prime Minister bringing together 40 eminent Canadians from all walks of life has already held over 50 meetings in just nine months of work. As a result of the expert advice and constructive work of this board the Innovaction Program has been developed to focus science and technology in five critical areas: industrial innovation and technology diffusion; development of strategic technologies; effective management of federal science and technology resources; human resources for science and technology resources; and public education in science and technology.
Further, Canadian companies carrying out research and development receive strong support through the tax system. When deductions and tax credits for research and development are taken into account the tax incentives for Canadian firms to invest in research and development are among the most advantageous in the industrialized world.
The Budget must also be taken in concert with our initiative on tax reform and the changes affecting the income tax system introduced by the Minister of Finance on December 16, 1987. Those reforms will simplify the structure of personal income tax rates. There will be three federal tax brackets rather than ten, with the rates fixed at 17, 26, and 29 per cent. Personal exemptions and many deductions will be converted into tax credits, improving the fairness of the system, and there will be a reduction or elimination of many tax breaks.
As a result of these tax reforms, personal incomes taxes will be reduced for 9.7 million households, 85 per cent of the total. Income taxes will be reduced for 90 per cent of senior citizens. Approximately 850,000 Canadians, including 250,000 senior citizens, will have their income tax reduced to zero. Their personal income tax reductions will be reflected in payroll deductions and pay-cheques beginning on July 1, 1988.
February 23, 1988

As a result of the personal income tax changes, there will be a reduction of some $12 billion over the next five years from this source. This $12 billion will be paid by roughly equal increases through increases in corporate and sales tax revenues.
Furthermore, low income Canadians will continue to benefit from the refundable sales tax credit of $70 per adult and $35 per child. The refundable child tax credit for lower and middle-income families has been increased from $384 per child in 1985 to $559 in 1988.
In conclusion, as a new Government we promised that we would reduce the deficit. We have done so in each year since 1984. We promised to regain control over government spending and restore fiscal responsibility. I think the facts speak for themselves. Further, we promised to bring fairer and greater simplicity to tax reform. We are part of the way down that road.
In commenting on this Budget, the Leader of the Opposition (Mr. Turner) complained that it is a conservative Budget. I am glad that he said that, because we had enough of Liberal spending irresponsibility when he was the Minister of Finance and when his Government ran the country into debt through uncontrolled spending. I compliment the Minister of Finance (Mr. Wilson), and I compliment the Prime Minister (Mr. Mulroney) for their responsible economic leadership. Under the Prime Minister's leadership fiscal responsibility has returned to Canada. We have only begun.
Therefore, I urge Canadians to look very carefully at the facts. I would urge them not to listen to all the personal attacks on government Members by members of the Opposition. I would ask them to look carefully at exactly what the Government promised and what it has done. We cannot allow either the Liberals or the socialists to become the Government after the next election. What this country and what our children desperately need is that this Government continue for another full term, because then we can continue this program of fiscal responsibility, of deficit reduction, and of job creation to make this country what it truly can be.


Mr. Fretz:: I wish to tell you, Mr. Speaker, how much I appreciate the thoughtful and informative speech given to the House of Commons by the Hon. Member for Kitchener (Mr. Reimer). The Member spoke about the lack of fiscal responsibility and the spending spree which the Liberals started with the appointment of the present Leader of the Opposition (Mr. Turner) as the Minister of Finance.
Can the Hon. Member for Kitchener clarify for me when those years were? I recall that the Hon. Member indicated that there was a $481 million surplus. What was the deficit that that surplus led to as a result of the Leader of the Opposition's leadership as then Minister of Finance? If the Hon. Member could clarify that for me, I would appreciate it.


John Henry Reimer: In response to the question of the Hon. Member for Erie (Mr. Fretz) let me say that the years when
The Budget-Mr. Reimer
the Leader of the Opposition was the Minister of Finance were from 1972 to 1975. As I sought to indicate in my speech, during those years when the Leader of the Opposition began as Minister of Finance there was a $481 million surplus. When he left after those 3.5 years as the Minister of Finance, there was a $4 billion deficit. That is the record of that Finance Minister.
I find it very difficult when he rises and makes some of the statements in opposition to what we are attempting to do. In fact, he was the person who began the very problem that we have now. He should at least acknowledge that fact, and at least acknowledge that we have begun a reduction program that is now in its fourth year of one year after the other of reduction.
Those are some of the facts that the people of Canada have to hear instead of the innuendo and the constant personal attacks on the character of various Ministers of the Government.


Jack Harris: First, I wish to correct a statement that I put on the record a little earlier. I indicated that, at the rate of progress in Newfoundland's percentage of per capita income as compared to the national average, it would take 250 years at the rate of progress that we have been having since Confederation. That was a mistake. It is actually 288 years.
In 1949, before Confederation, Newfoundland's per capita earned income was 48.8 per cent of the national average. In November of 1987 it was 55.5 per cent. That is not progress over those full 38 years. That progress was reached by 1971, so there has been no change since then. Before Confederation there was an improvement of 6.7 per cent in the gap between Newfoundland's earned per capita income and Canada's.
My question for the Hon. Member from Kitchener (Mr. Reimer) whose riding and province is doing very well by the Canadian economy at the moment, is the following. In Newfoundland, do we have to wait 288 years to reach the level of economic development that his riding and others in Ontario share as part of the Canadian economy? If that is the case, how can the Hon. Member say that this Budget and the budget measures of the Government are enough for regional development?


John Henry Reimer: I reflect upon what the Hon. Member for St. John's East (Mr. Harris) has stated, and I wonder if he would not mind commenting on how many of those years that he was talking about were in fact under a Liberal administration, both provincially and federally.


Jack Harris: Too many.


John Henry Reimer: The Hon. Member is correct in stating that, in Ontario, and particularly in southern Ontario, things are going extremely well. But the national statistics show unemployment falling dramatically. It is true that nationally there has been an improvement.

February 23, 1988
The Budget-Miss Nicholson
When we as a Government try to bring in some programs, why do the Liberals, and particularly the NDP, since that is the Member's Party, vote against them? Why did they vote against $456 million in additional funding for regional industrial expansion? If the Hon. Member wants some assistance, which is being offered, why is he against it? Why is he not for it? Why is the Hon. Member and the NDP opposed to $306 million for the Atlantic Canada Opportunities Agency?


Jack Harris: Because of Sinclair Stevens' legal bills.


John Henry Reimer: Mr. Speaker, the Hon. Member for St. John's East (Mr. Harris) is not listening to my answer.


Jack Harris: I am answering your questions.


John Henry Reimer: When we seek to bring in programs, and when we bring in regional development incentives, why is the Hon. Member against them? Why is the Hon. Member against the $306 million for the Atlantic Canada Opportunities Agency? Why is the Hon. Member against free trade which will help his very area? Why is it that the Hon. Member for St. John's East and his Party are opposed to free trade?
When the committee of which I was a member toured Atlantic Canada, presentations were made to us indicating that free trade would clearly assist the Atlantic region, both in selling more of its resources and in the secondary manufacturing that would package some of the resources. Therefore, it would create jobs not only in the area of natural resources but also in secondary resource development.
Again I cannot understand why the Hon. Member for St. John's East raises these questions in this manner, nor can I understand why they are opposed to regional industrial expansion efforts, nor can I understand why they are opposed to freer trade.


The Acting Speaker (Mr. Paproski):: Does the Hon. Member for St. John's East (Mr. Harris) have a supplementary question?


Jack Harris: Yes, Mr. Speaker. The Hon. Member who just spoke well knows that the budget Estimates to which he was referring and which our Party voted against contained in them a vote for legal expenses for an Hon. Member who was a former Minister of his Government, and that our Party and a vast majority of Canadians opposed the payment of them. This is why those Estimates were voted against as one block, not as a separate budget item as he insinuated in his comments.
I think that should set the record straight for the Hon. Member, and I would ask him if he would be fair and acknowledge that that is the case.


John Henry Reimer: Mr. Speaker, I accept the admonition of the Hon. Member in trying to be fair. I agree that we are asked to
support measures which are in total and that we may not always agree with every individual part.
However, may I say for the benefit of the Hon. Member that some of that money was spent for the former Hon. Minister to whom the Hon. Member referred as a result of the shameful attacks by his own Party and by the Liberal Party and all the innuendo against that person. It forced us to look at the question and into a long court case to deal with the particular issue. I would think that they have to accept some of the responsibility for that cost.


Miss Aideen Nicholson (Trinity):: Mr. Speaker, when I spoke on February 12 on the borrowing authority Bill, I commented that it was difficult to speak on a so-called Budget which was 95 per cent electioneering guff and 5 per cent content.
I have with me here today a Canadian tax letter issued by that well respected firm Peat Marwick, which also has some harsh things to say about the smoke and mirrors we have seen from the Government for some time. The Peat Marwick tax letter says in part, and I quote:
By adroitly manoeuvring to accelerate remittance of payroll withholdings, personal income tax installments and federal sales tax collections, Mr. Wilson has been able to contain his budgetary deficit estimate for 1987-88 to $29.3 billion and budgetary deficit forecast for 1988-89 to $28.9 billion, still enormous amounts considering the over-all Canadian economy.
Later in the newsletter we read, and I quote again:
-it is a legitimate reason for concern that, in the sixth year of an economic expansion, the budget deficit remains very high by historical standards and is expected to improve only slightly in the near term.
This concern is accentuated by an element of sleight of hand in recent budgets. Budgetary revenues will have been enhanced by $3.9 billion through a number of once-only changes, including:
the acceleration of remittances of personal income tax source deductions by
large employers
the acceleration of quarterly personal income tax instalment payments
the acceleration of federal sales and excise tax payments.
Because this issue really goes to the heart of the credibility of Government, I want to take a few minutes on it. When the finance committee was holding hearings on the White Paper on tax reform, a very well respected accountant said that he would have expected better from the Finance Minister than this kind of selective, creative accounting, which he described-I am quoting a well respected accountant-as being like kiting cheques, as he spoke of his disappointment in the Finance Minister from whom he said he would have expected better.
Let us look at where some of this has come from. In the document entitled Economic & Fiscal Outlook released on June 18, 1987, in a table on page 30, we are shown that the acceleration of source deductions and quarterly installments of personal income tax will bring in $1.1 billion in fiscal year 1989-90, while the acceleration of sales and excise tax payments for fiscal year 1988-89 was expected to bring in $1.6 billion.
February 23, 1988

What does this mean in plain English? It means that employers who withhold payments from the payroll for Canada Pension, income tax, and unemployment insurance, who used to have to remit it to the Government monthly, were first required to remit fortnightly, and a little later there was a further change and they were required to remit weekly. We have seen the same thing with the federal sales tax. Manufacturers are being required to remit it earlier; in some cases even before they have collected the tax from the sale.
This means that the Government's books look better once only, but this is not an ongoing source of revenue. This is the kind of selective bookkeeping which Peat Marwick criticized and which people coming before the finance committee on tax reform criticized. A Bank of Montreal newsletter a couple of months ago also criticized it. In fact, it reckoned that some of the selective bookkeeping might indeed have falsely reduced the deficit by as much as $4 billion.
Let us look for another instance where the Government has used figures rather creatively. In some of the earlier economic statements soon after the Government came to power, we were told that a cap would be put on the growth of fiscal transfers to the provinces. The Government got terribly incensed when this was referred to as a cut. "No cuts", they said, "we have merely limited the rate of growth by $2 billion". On February 26, 1986 we had a Budget where there was not a word about this cap on transfers to the provinces in the Budget Papers in Canada, but a glossy document, which was released in embassies abroad and which was given particularly a lot of exposure in the United States, claimed that the Government intended to cut these transfers. Reductions in transfer payments to provincial Governments for health care and postsecondary education were listed among the Government's so-called efficiency measures on page 6 of this particular document. So we have a Government which came to power on a promise of reducing expenditures, reducing the deficit and not raising taxes but it has done precisely the opposite.
Let us look at some specifics in this Budget, which I did not discuss in my speech on the borrowing authority. Again, it is a matter of the Government saying one thing and doing another. The Minister of Finance (Mr. Wilson) has frequently criticized the manufacturers' sales tax. He says it distorts the economy; that it is a silent killer of jobs. But he has increased that same manufacturers' sales tax enormously since he came to power. He tells us that it is only a temporary measure, that when he puts in his new sales tax, the federal manufacturers' sales tax will go. Meanwhile he increased it enormously. I will repeat again some of the figures that I gave on February 12.
On October 1, 1984 we saw the manufacturers' sales tax increased from 9 to 10 per cent. On January 1, 1986, it was increased from 10 to 11 per cent. On April 1, 1986, it was increased from 11 to 12 per cent. The impact on tax revenues was a $3 billion gain to the Government as a result, this from a
The Budget-Miss Nicholson
Government which came to power on a promise of not increasing taxes.
On July 1, 1985, we saw the sales tax extended to candy and soft drinks. On July 1, 1987, we saw the sales tax extended to fast food and snacks. Those two measures netted the Government S460 million. On January 1, 1988, we saw the sales tax increased from 8 to 12 per cent on paint, wallpaper and toys. That measure brings the Government $60 million a year. We have seen progressive increases in air transportation taxes since May 1, 1986 which have netted the Government $55 million. Then we have the excise taxes, to which I will return. Then there are the income taxes greatly increased by deindexation of personal allowances and other measures. The Government continues to increase taxes while not lowering the public debt.
I want to come back to the Peat Marwick newsletter because Hon. Members opposite have been objecting to figures and statements produced from this side, so I think if I quote a very well respected accounting firm's newsletter nobody can find fault with the accuracy of it. The newsletter is critical of the increases in the manufacturers' sales tax. We have some new ones here. Let me quote:
It comes as no surprise that the Government has again turned its attention to federal sales tax in the current budget. The second stage of the 1987 tax reform proposals on the multistage sales tax appears to have becomed bogged down in pre-election jitters. While it does not appear to be safe to introduce a new tax in a potential election year, it pays to tinker with the grande dame of taxes-the 68 year-old federal sales tax.
The proposal to shift the sales tax to the wholesale level for household chemicals, toys, games and sporting goods and records and tapes (to have been implemented January 1, 1988, then postponed to July 1, 1988) will not be implemented.
This was a matter on which the finance committee received many representations. The letter continues:
The sales tax on pet foods, snack foods, candy and confectionery, microwave ovens, television and video recorders and players, moved to the wholesale level prior to 1988, will be shifted back to the manufacturer's trade level effective November 1, 1988. It is unclear what the tax disposition of affected goods will be where such items are held by a wholesaler at November 1, 1988. Transitional provisions should ensure the ability of wholesalers to pay tax only on the cost of goods on hand at November 1, 1988 when they are ultimately sold at a later date.
Because of "structural problems' in applying the sales tax at the manufacturer's level on motor vehicles, cosmetics, health goods, prerecorded video cassettes and pet litter, these items will continue to be taxed at the wholesale trade level-
Concerning the manufacturers' sales tax, and I repeat, according to the Minister of Finance, the manufacturers' sales tax is destructive to the economy, destructive of jobs, yet he continues to increase it, to tinker with it and to apply it to more goods, to broaden the base and increase the rates. It is a very inconsistent position which is difficult to understand. One of the measures the Government considered was to introduce related-party taxing provisions. This was introduced in the June, 1987 tax reform papers. It was resisted. The finance committee received many criticisms of it, in response to which the Minister of Finance, sensibly, withdrew it. First, the provisions were temporarily postponed to July 1, 1988. Now it

February 23, 1988
The Budget-Mr. Layton
seems they are out of business for good. This is only one of the tinkering provisions which was so poorly thought out that it had to be quietly withdrawn. However, in its place the Government is proposing an alternative that looks cumbersome and may be equally unworkable.
I also want to point out that there is another measure introduced in this Budget which at first blush does not appear to have many revenue implications, but which, in fact, does. This Government has become very ingenious at introducing hidden sources of revenue. I refer here to the wholesale licence provisions under the Excise Tax Act. The Government is proposing changes in the method of licensing. Effective November 1, 1988 it is proposed that licence applicants will have to sell at least 50 per cent of their taxable goods under exempt conditions in any six month period ending in the 12 months preceding application. In addition, licencees will be required to file an annual report by February 15 in each year to account for exempt or taxable goods in the preceding calendar year. To retain a licence at least 45 per cent of their taxable goods must be sold under exempt conditions in any six month period ending in the reported year. If the licence is cancelled, because of not meeting these conditions, tax free inventory must be tax paid in six equal instalments over the coming year.
Security for these licences is being increased to a maximum of $100,000. The cancellation of such licences is expected to bring in a one-time $200-million revenue in the 1988-89 and 1989-90 fiscal years. This is another piece of smoke and mirrors, a one-time-only revenue that will be a considerable inconvenience to the people involved who have had less than adequate notice and less than adequate consultation about this change. It is creative bookkeeping for the Government, making its books look better. There is no indication that the Ministers care at all about the inconvenience to the people involved or about the essential lack of honesty in this kind of presentation.
Earlier I mentioned the excise tax. Indeed, it has been a great revenue producer for the Government since it came into power. We have seen a penny a litre now, two cents a litre then. In fact, since this Government came to power, it has increased gasoline prices by well over 18 cents a litre.
Effective April 1, 1988, the excise tax on gasoline and aviation gasoline will increase by one cent a litre. The fuel tax rebate for farmers, fishermen and other primary producers will also be increased by one cent per litre. Since Hon. Members opposite have become so indignant about the figures we use without attributing them, let me attribute this to an outside source. The newsletter of Peat Marwick says, about this final one-cent increase in gasoline:
This cosmetic change will result in additional revenues of approximately a
third of a billion dollars!
In conclusion, I did not want to repeat in this speech on the Budget the general criticisms I made when I spoke on the
borrowing authority on February 12. However, I do want to stress again that this so-called Budget had about 5 per cent content and 95 per cent electioneering guff, it had selfcongratulation and hidden tax grabs and it is indeed a sorry document.


The Acting Speaker (Mr. Paproski):: Questions or comments. Since there are no questions or comments, debate.


Hon. Bob Layton (Lachine):: Mr. Speaker, I am glad to join my colleagues this afternoon in sharing some feelings in the budget debate. As well, I wish to react to the environment within which we find ourselves, both locally in Lachine and in the country.
The Minister of Finance (Mr. Wilson) declared in his budget message that our policies are right, our policies are working, we are committed to fiscal responsibility, we are committed to priority needs and we have a vision of the future. The Prime Minister's choice of Finance Minister must be compared with that of his predecessors.
Canada has benefited from the very settled, responsible, steadfast approach of our Minister of Finance over these past three and a half years. Four or maybe five times he has presented the House of Commons with an outline of what is important for Canada. In those first months of our responsibility as Government, Hon. Members will recall how serious was the concern for the exploding deficit that Canada was facing, billions of dollars being added year after year to our future debt to be passed on to our children and their children.
The Minister of Finance established a financial framework. We as Ministers were challenged to find the ways to reduce the demands of Government on the taxpayer, to reduce the deficit through expenditure reduction Department by Department. This was the exercise.
A special undertaking was established by the Prime Minister (Mr. Mulroney) himself when he appointed the then Deputy Prime Minister to lead a review of over 1,000 spending programs to which the Government was committed, to see which of them were essential, which were contributing to the national well-being as was their original intent. Many were either eliminated or reduced to bring spending into line.
The revenue increase was forecast along with increased tax in some areas. There is no question that because of the need to reduce the deficit, everyone knew we had been spending beyond our means for years and would have to pay the penalty. Having established that some of the reduction would come from increased revenues, the Minister of Finance and the Government committed themselves to expenditure reductions. I thought that 70 per cent of the total reduction of our deficit would be achieved through expenditure reduction. Instead, the figure was 80 per cent. Eighty per cent of the total reduction of our deficit today is due to the reduction of spending by the Government and 20 per cent has been the cost to the taxpayer in increased taxes.
February 23, 1988

Much of the increased revenues of the Government have come from the very policies which have established credibility for Canada as a place to invest. The more people we put to work through investment, the more revenues we have. Those people come off the UIC and social benefit doles and support programs and enter the working force, something which, by the way, makes them taxpayers.
I heard something particularly interesting about the quality of job creation. Members of the Opposition have argued that most of the jobs created by the Government have been low paid, minimum wage jobs in the service sector, a kind of sneer. They are dead wrong. Members of the Opposition have got it into their heads that the service sector consists of nothing more than hamburger jockeys at McDonald's and bellboys at the Floliday Inn. They are ignoring the fact that doctors, architects, engineers, public servants and nurses as well as bankers and stock brokers also work in the service sector.
If opposition Members were to look at job creation by occupational sector rather than by industry, they would learn that half of the jobs created between 1984 and 1987 were of a managerial or professional nature. These hardly qualify as minimum wage jobs. If other high-paying occupations such as construction are included, approximately two-thirds of the jobs created between 1984 and 1987 were in occupations with above average wage levels.
We have a right to be proud of our framework and of the results of sticking to the framework. Speaking as an engineer, a framework is a function of the strength of the structure. In a political sense, it 'r a commitment, obviously one acceptable to investors around the world. Canada is again becoming that place where people want to have part of the action. They want to join us in what we are doing. We are one of the most attractive places in the world to invest in and to live in, without any question.
The Prime Minister's choice of Finance Minister has resulted in a tenure second only, as I recall, to that of the present Leader of the Official Opposition (Mr. Turner) who held the post for longer. However, it will not have been for that much longer because I do not think it will be long before the country will return this Government and that Minister of Finance for another round of responsible Government. If there were more in the audience, I am sure I would hear loud cheering.


An Hon. Member:: Hear, hear!


Robert E.J. Layton: There it is. Our Minister of Finance is a credit to Canada. He is a credit to the Government. He is a credit to fiscal responsibility as a theme and as an objective. He is a credit to all of his colleagues and a credit to himself for the way he keeps carrying a very difficult and challenging responsibility.
The Budget-Mr. Layton
The requirement is to find new resources from within the framework. On each new spending proposition the Minister bringing forth that particular initiative is challenged to find the resources within his own Department or to work a deal with the other Departments affected in order to achieve the goals. Yes, there have been some criticisms of the performance and approach of the Government. Even from our own supporters the question may be raised as to why there are increased taxes. That is answerable because part of the cost of previous overspending is being responsible today by paying back the debt.
Why is the deficit so slow to be reduced? Why can we not take a bite into it and cut it right back? All of us who have a business background understand that it is a lot easier to spend than to save. We had got into such a habit of committing ourselves to expenditure that the process of changing a bureaucracy as large and as growing as that with which we were faced in 1984 was enormous.
Therefore, the cost of reducing the growth of the Government was likewise a major challenge. It is happening. From the $38 billion level that we faced in 1984 it is down to $28.6 billion, and will continue to decrease each year. Each decrease in the deficit carries with it a considerably reduced demand on the financing markets and all the time reduces pressure on interest rates.
What are the results, the impacts, of fiscal responsibility? The very first is reduced interest rates which are down from the enormous figures we used to see at the mortgage companies. When 20 per cent of an investment had to be paid off in interest none of our young people wanting to establish homes could consider it. Today they can talk in terms of mortgages at 10 per cent and less. There are major savings for consumers and home renovators. There is increased investment.


Mr. Rossi:: Tell us where you can get a 10 per cent mortgage.


Robert E.J. Layton: The financial community is supporting projects without the Government's support which used to be mandatory. Without a government grant nothing happened. Today we have left that to the market-place, with a tremendous advantage to all because of the administrative costs.


The Acting Speaker (Mr. Paproski):: I am having a little difficulty listening to this great speech in the House of Commons. 1 would hope that other Members would be courteous to the the Hon. Member for Lachine (Mr. Layton).


Robert E.J. Layton: Another major impact of fiscal responsibility is increased employment. Nearly 1.2 million jobs have been created since September, 1984. That is the highest increase per capita in any of the economic communities in the western world. Reduced unemployment goes hand in hand with that. People who used to look for part-time jobs are now enjoying full-time jobs. A major impact of fiscal responsibility is a

February 23, 1988
The Budget-Mr. Layton
reduced inflation rate which is staying close to 4 per cent. We have a much more stable economy and considerably increased confidence in ourselves and our country.
The Leader of the Official Opposition has argued that we have increased personal income tax by 68 per cent since we took office. Revenues are up mainly because of strong economic growth and job creation. Yes, there have been some tax increases because this Government has done what the Liberals have never done. It has taken on the fiscal mess that was left. Over 80 per cent of our deficit cutting actions are due to expenditure reductions. If we had allowed spending to increase at the annual rate of 20 per cent, which it did when the Leader of the Opposition was Finance Minister, we would have had to double this year's tax levels just to keep the deficit from increasing.
The method of the present Leader of the Opposition of calculating tax increases is to compare revenue levels in one year to revenue levels in another. If we apply this method to his record, we find that personal taxes increased by 76 per cent over the four-year period when the Leader of the Opposition was Finance Minister. If we had increased 1984 personal tax levels by that same amount, the average Canadian family would be paying an extra $1,000 in taxes this year.
The impacts of which I have spoken are also noticeable in my riding of Lachine, soon to become Lachine-Lac St. Louis with redistribution adding Lachine East back into the riding boundaries. This is a most practical arrangement as the four major Lakeshore communities west of Montreal, namely, Beaconsfield, Pointe Claire, Dorval, and Lachine, will be united as a single constituency with strong representation of our two linguistic communities and many of our ethnic minorities.
Economic recovery is evident in Lachine, a community which has been found by many Montrealers to be the most attractive place in which to live and to raise families. As a result, housing developments are booming in all sectors. Renovations and property development are being matched by commercial activity. Our towns are well administered and will continue to be attractive for investment.
One topic of specific concern to our community is the Dorval Airport. My colleagues will remember that not so many months ago a central issue for Montreal was how to serve the public with its international airports at Dorval and Mirabel. It was only after a period of considerable uncertainty and following extensive discussions, in which I was happy to represent the interests of Montrealers, that the Government developed and announced a policy some 15 months ago ensuring the future of Dorval Airport and the preservation of Mirabel for international and air cargo operations as they develop in the future.
In the last few weeks the Government has appointed an advisory council, which will be headed by Arthur Earle, a well known executive and past President of the Montreal Board of Trade, to study how the local community can take more and
more control of the airport services which will be available to the public in Montreal. We are moving in the right direction.
As a point of interest, between 1981 and 1984, $15 million was invested in Dorval Airport. Since 1984, the capital investment has been $59 million. In the next few years it will be even greater.
The federal Government sold unused Dorval Airport land located on Sources Boulevard to the Cities of Pointe Claire and Dorval thereby creating the new Sources Industrial Park. Many new jobs will be created once this land is developed, one of the last high-tech development areas to the west of Montreal.
Dorval Municipal Golf Course, which has served for 40 years as a green space and buffer zone between the homes of Dorval and the airport operation, was threatened with closure, but this decision was reversed recently by the Government, thereby protecting the green space but also allowing for a cargo centre to be developed producing many new jobs.
The Department of Regional Industrial Expansion held a ceremony in Halifax recently called Canada Awards for Business Excellence. The two best companies in Quebec were from the riding of Lachine, namely, Production Sysper Inc. and Noranda Research. We are very proud of our high-tech facilities in the west of Montreal.
I have been privileged to visit a number of the plants, the two which I most recently visited being Pilon and DKL, both of which are competing and winning in the U.S. market in high-tech. The Department of Regional Industrial Expansion has helped finance over 35 firms since 1984 in the expansion of their facilities and produced over 1,750 jobs.
Since September 4, 1984, over $300 million worth of products and services have been purchased by the Department of Supply and Services from companies in the Lachine riding. This is an increase of 18 per cent over the previous three-year period, which is not bad considering that the Conservative Government has reduced the deficit growth rate.
There has been a major upgrading of the traffic facilities around Dorval, including the Dorval traffic circle. My colleagues from across the country may not realize that the West Island and Lachine are a major hub for the metropolitan area of Montreal because transport, whether by road, rail or air, comes and goes from my riding.
My speech this afternoon would not be complete if I did not briefly refer to Bill C-22 which proposed amendments to the Patent Act regarding pharmaceuticals. The majority of pharmaceutical companies in Quebec are located in the West Island region of Montreal. The benefits to our community now that Bill C-22 has been accepted will be substantial. Many of the 1,300 new jobs to be created in the Montreal area will be in my riding.
February 23, 1988

Perhaps a brief remark should be made on the recently introduced federal legislation regarding justice for victims of crime. This is a very real initiative on the part of a volunteer community, led by Sergeant Detective Menard, which has led to a considerable influence on our Government to bring forth legislation for victims of crime. Convicted criminals may now pay for their crimes, and most important, victims will be recognized and their needs and rights addressed.
I am also proud that citizenship court ceremonies are now held in the West Island, particularly in our riding. This is a first, and brings the citizenship court and its importance to where new citizens live.
Finally, for a number of years, once every month a representative from the Department of National Health and Welfare has come to the West Island to answer questions about old age security, pensions and family allowances.
In conclusion, the good will, confidence and assurance that I represent in my remarks this afternoon on behalf of my riding are based on our confidence in the Minister of Finance and the steadfast continuity and stability of his economic message and Budget.


Mr. Leblanc:: Mr. Speaker, first of all I would like to congratulate the Hon. Member for Lachine (Mr. Layton) on his excellent speach. The Hon. Member is 62 and therefore a man of experience. He has a great deal of experience in the business world in Montreal, and I can assure him that what he said today about the Budget is true.
In 1984, the former Minister of Finance, Mr. Lalonde, forecast a deficit of $48 billion. That was his forecast. However, during that same year, we managed to reduce the deficit to $36 billion, which means $12 billion less. All this means is that the Minister of Finance was dead right.
There is something I would like to add to what the Hon. Member for Lachine (Mr. Layton) said about job creation generating revenue and increasing the federal Government's tax base. From 1980 to 1984, under the Liberal Government, the Montreal area saw a drop of 4,000 in the number of jobs. In fact, considering our mandate and the short time it took us to put the whole machine back in good working order, from 1984 to 1987, in just three years, we managed to make the Montreal area ... I say the Montreal area because the Hon. Member for Lachine is from the Montreal area. I am too, and I am proud to say we created 114,000 new jobs in this area in just three years after the Progressive Conservative Party was elected. Mr. Speaker, the Minister of Finance sees his task as a long term project, because the Minister's Budget is not just a year-to-year affair like the Liberals used to produce at the time. What we have is a long term Budget, a long term project so that business people can invest in long term programs. Nobody in business invests substantial amounts without knowing what kind of budget the Minister is going to bring down each year.
The Budget-Mr. Layton
In fact, the Minister of Finance is to be commended for having opted for a long-term program to stabilize the Canadian economy. I would like to ask whether the Hon. Member for Lachine believes ... Personally, I think the forecast deficit of $28 billion is too high. I would even say that, considering the economy's rate of growth and the statistics we saw last month, the deficit, instead $28 or $29 billion, should be expected to be around $25 billion. What do you think, as the Member for Lachine?


The Acting Speaker (Mr. Paproski):: The Hon. Member for Longueuil (Mr. Leblanc) has asked the Hon. Member for Lachine (Mr. Layton) a question. Would the Hon. Member like to answer?


Robert E.J. Layton: I want to thank the Hon. Member for Longueuil (Mr. Leblanc) who is himself a businessman and a prominent citizen in a riding as substantial as my own, on Montreal's Southshore. The riding is well established and well known, and it is in very good shape today.
I could not agree more with what he said about the need to continue our annual deficit reduction program. I think $25 billion is a very promising goal, but I think we should bear in mind the many other factors that have an impact on the country's economy. I spent two years as Minister of State (Mines), and I feel that as far as the mining industry is concerned, the situation is very volatile, and that we must have programs available for the regions and various industries and sectors, like the mining industry, which may from time to time experience a negative cycle. But with that reservation ... I am very confident about your suggestion regarding the $25 billion and the fact that we should simultaneously reduce our annual borrowing needs and our debt.


An Hon. Member:: The Hon. Member for Longueuil won't be around, that's why!


Robert E.J. Layton: Yes, but he can hear me.
Mr. Speaker, 1 am pleased to say I fully agree with the Hon. Member.


The Acting Speaker (Mr. Paproski):: Further questions? The Hon. Member for Richmond-Wolfe (Mr. Tardif).


Mr. Tardif:: Mr. Speaker, the Government Member spoke at length about the need and the relevance of reducing the deficit.
Everyone will agree it is important to reduce the deficit. However, observers tend to agree that the drop in the deficit was not due to good management but to higher taxes.
My question to the Hon. Member is as follows: Why did his Government opt for reducing the deficit by savagely increasing taxes, and what is worse, taxes paid by consumers, by people

February 23, 1988
The Budget-Mr. Young
on low and middle incomes, while the tax burden on corporations and big companies has shrunk dramatically?


Robert E.J. Layton: Mr. Speaker, 20 per cent of today's deficit reduction is due to supplementary revenue, while 80 per cent is the result of spending cuts. I think this balance is justifiable and is acceptable to Canadians. I am confident that once Canadians have evaluated the situation, they will agree this is exactly the kind of balance they want.


The Acting Speaker (Mr. Paproski):: Does the Flon. Member have any more questions? The Hon. Member for Ottawa-Vanier (Mr. Gauthier).


Mr. Gauthier:: Mr. Speaker, I would like to ask my friend a question about interest rates, a very important subject. There are people in this country who believe interest rates are too high. Indeed, they believe the Government, in the three and a half years it has been in power, by maintaining these very high interest rates, has cost Canadians some $2 billion through excessive interest payments on the national debt. My hon. friend knows that debt has increased by $116 billion since the Tories took office in 1984, a 60 per cent increase. He also knows that if we were to lower interest rates to a reasonable level through government action, we would save money because of the lower cost of paying interest on the national debt.
Is the Hon. Member in accord with the theory that interest rates could be lowered through certain fiscal and other monetary actions by the Government, therefore helping Canadians to increase economic activity and possibly reduce the deficit much faster?


Robert E.J. Layton: Mr. Speaker, my hon. friend from Ottawa- Vanier raises the question of whether the Government can simply save money by arbitrarily reducing interest rates. I think he will be as aware of the factors that go into interest rates as anyone in business. The only true interest rate which can apply in Canada is what the market will support. The system in effect today is that of maintaining a market base interest rate in competition with other markets around the world. It is no longer a case of Canada isolating itself and pretending that we can have a particular level of interest rates and dollar value. We are in an international market of instant communication. Money is moved instantly by computer around the world and we would quickly suffer if our interest rates were not as attractive as those of the Americans and Europeans.


The Acting Speaker (Mr. Paproski):: The period provided for questions and comments has now expired. Resuming debate. The Hon. Member for Beaches (Mr. Young).


Mr. Neil Young (Beaches):: Mr. Speaker, I am glad to have an opportunity to say a few words on the most recent Budget
which the Minister of Finance (Mr. Wilson) has presented for our consideration in the House. I certainly can agree with the Hon. Member for Lachine (Mr. Layton) that the Minister is a very nice kind of chap. However, that does not mean we think his Budgets are always well thought out or that his competence in some respects cannot be questioned.
In preparing a few notes for today's debate I came across a statement by the Prime Minister (Mr. Mulroney) which he made in this House on March 16, 1987. He said:
-we are in the process of building two Canadas, one which is rich and
promising and one which is underdeveloped and underemployed.
I, of course, agree with that observation. However, where the Prime Minister and I would probably disagree is on the approaches that the Government has taken to correct that very true statement.
This Budget does absolutely nothing to correct the anomalies that he and others find in various parts of Canada today. Unemployment remains unacceptably high in most regions. The exception is in the area surrounding my own constituency in the City of Toronto. Certainly one hears of the very low unemployment rate in southern Ontario, Metropolitan Toronto in particular. What is not as well known is that the vast number of jobs created in a place like Metropolitan Toronto have actually been part-time jobs. Neither does the Government talk about the vast army of people who are not considered unemployed because they do not meet some statistical criteria set down by those who record unemployment levels.
There are all kinds of people in Toronto and elsewhere over the age of 50 who have become unemployed but are no longer considered unemployed because they are not collecting unemployment insurance. Yet they cannot find jobs. To those people it is meaningless when the Prime Minister and others talk about the number of jobs created in Canada since 1984. Therefore, I tend to caution people when they talk about the prosperity in southern Ontario. Much of it is not real at all, even though in comparison to other areas of the country there is no question we are better off.
I recall being in Nova Scotia, Newfoundland and New Brunswick about this time last year where unemployment among young people is just horrendous. You cannot go into the Atlantic region without coming out thoroughly depressed at the hopelessness of many of those young people. Once they come out of school there are no jobs for them down there. If they are going to find work they have to uproot themselves from their families and communities and move to places like Toronto. I do not think that anyone, by any stretch of the imagination, will say that this is acceptable in a country as rich as Canada is today, if it was ever considered to be acceptable at all.
Rather than make that situation better for those people, this Budget and previous Budgets have actually made it worse. When you look at what previous Budgets have done to the average Canadian family through increases in sales and personal taxes, you find it amounts to an additional $1,400 a
February 23, 1988

year being taken away from those families. Even under so-called tax reform introduced by the Minister last year, the average family will still be paying more than $1,000 more in taxes under this Government than it did prior to 1984. While low and middle-income Canadians are paying more taxes, there are also people at the high end, 2 per cent of the population, who will actually be paying less than they were prior to 1984.
You will also be interested to know, Mr. Speaker, that some
60,000	profitable corporations will continue to avoid paying any tax despite the tax reform package that was introduced last year. Large corporations in particular are able to use tax incentives to the greatest advantage to reduce their tax loads to absolutely nothing. For example, Xerox Canada, Brascan and Alcan Aluminum paid no taxes at all in 1986, while Cadillac Fairview, Fludsoh's Bay Co. and Bramalea did the same in
1987.	All of these corporations made millions of dollars in profits.
I wish to take Hon. Members back to the first Budget and the subsequent Budgets of the Government and deal with the impact that they had on an average family of two with two children which earns $35,000 per year. For example, the November 1984 Economic Statement, which was not classed as a Budget but which had the same effect, increased oil and gas prices by $100 per year for this family of two. It increased unemployment insurance premiums to $102 per year and sales taxes by $150 per year. As a result of that one economic statement this family's disposable income declined by $352 per year.
The May 23 1985 Budget saw the elimination of the federal tax reduction which resulted in a $100 increase in taxes for this family. There was a modification to indexing which amounted to $115. There was a cut in family allowance payments amounting to $22.50. Taxes on cigarettes and alcohol increased by $75 per year. The sales tax was broadened, which amounted to an increase in taxes of $150 per year. The gas tax increase in that Budget resulted in an increase of $50 per year. All these increases amounted to a $512.50 reduction in the disposable income of a family with an annual income of $35,000.
On June 27, 1985, there was an increase of 1 cent per litre on gasoline which was to pay for the Government's backtracking on the proposal to deindex old age pensions. That increased taxes by $50 per year for this average Canadian family about which I am talking.
In the February 26 1986 Budget there was a 3 per cent surtax which amounted to a $170 increase in taxes for this average family. Sales tax increases accounted for an increase of $150, while an increase in cigarette and alcohol taxes added another $20. This Budget caused this average Canadian family a decrease in its disposable income of $340 per year.
The Budget-Mr. Young
On September 18, 1986, the Government slapped another $50 on Canadians for gas tax increases. It broadened the sales tax base, which amounted to another $15. Cigarette and air ticket taxes went up by $35. All these increases accounted for an increase in taxes of $65 to $100 on the family about which I am talking.
On June 18, 1987, under the Government's tax reform package there were changes in tax categories which meant a reduction of some $310 for this family. Tax increases effective February 10, 1988, saw the gas tax increase by 1 cent per litre for an additional $50.
The Government is nickeling and diming Canadians to death. It can argue all it wants but there is no way that it can convince me that Canadians are much better off in 1988 than they were in 1984. Canadians know that they are not.
I would now like to illustrate what the Government is allowing the richest element in Canadian society to get away with. I have some figures with respect to this for the year 1986. On profits totalling $220 million, Alcan Aluminum received a tax credit of $32 million from the Government. In 1986, on profits totalling $187 million, Brascan received a tax credit of $2.3 million. Hees International, on profits totalling $117 million, paid no taxes at all. Power Financial, on profits of $132 million, received a tax credit of $1 million from this crew. On profits totalling $115 million, Xerox Canada received a tax credit of $10.8 million. Total Petroleum, on profits totalling $40 million, received a tax credit of $2.2 million. On profits totalling $70 million, Wardair paid no taxes at all. On profits totalling $39 million, PWA paid no taxes at all. Repap Enterprises on profits totalling $34 million, paid no taxes at all. Union Carbide Canada, on profits totalling $28 million, paid no taxes at all.
The following figures are with respect to the year 1987. On profits totalling $51 million, Bramalea paid no taxes at all. On profits totalling $95 million, Cadillac Fairview received a tax credit of $12.4 million. Carena-Bancorp, on profits totalling $37 million paid no taxes at all. On profits totalling $50 million, Hudson's Bay Co. received a tax credit of $15.7 million. Seco-Camp, on profits totalling $43 million, paid no taxes at all.
In contrast with those figures three weeks ago, the Minister of National Health and Welfare (Mr. Epp) made a grand pronouncement in Winnipeg that he was about to increase the funding for the New Horizons Program for seniors up to a total of $15 million annually by 1989-90. What the Minister did not talk about is what the Government has done to senior citizens under the New Horizons Program since it came into office.
In 1984, when the Government was elected, the Budget for this program was $17.3 million. In the next year this same Minister who now wants to increase the Budget to $15 million cut the funding by $5 million. In 1986, New Horizon Programs were being funded to the tune of under the $10 million

February 23, 1988
Adjournment Debate
mark. In this year's Estimates it looks as if the program will receive $8.8 million per year.
While the Minister was talking about increasing the funding for this program to $15 million in 1989 what he has not talked about is that he has stripped the program of $15 million over the last four years. He is now coming along and saying, "Well, we are going to throw some more money in here. It will look good to senior citizens. They will think that we are finally responding to their needs. Therefore, all the senior citizens will trot out and vote for us in the next election". The Minister is dreaming. Senior citizens know what the Government has done to them in successive Budgets. They have been around a long time. They bring a great deal of wisdom to bear. They have seen many Governments come and go. This Government will not be able to pull the wool over their eyes.
I see that my time has practically expired. May I call it six o'clock, Mr. Speaker?


The Acting Speaker (Mr. Paproski):: The Hon. Member may call it six o'clock. He will have five minutes left in his speech when debate on the Budget resumes. I do not know when that will be. He will also have 10 minutes for questions and comments.



PROCEEDINGS ON ADJOURNMENT MOTION

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A motion to adjourn the House under Standing Order 66 deemed to have been moved.

Reginald Francis Stackhouse: Mr. Speaker, on September 21, 1987,1 raised a question respecting the arms gap between NATO and Warsaw Pact nations particularly because of the agreement that was about to be reached with respect to short and medium-range missiles.
This question is one of the most important, demanding questions that could be raised with regard to national defence. We are not a neutral country. We are a member of an alliance, an alliance that establishes that an attack on one member state in the alliance is an attack upon all. That NATO alliance has been one of the major reasons why peace has been sustained in Europe since World War II. The effectiveness of the NATO deterrents has been established. For many years that deterrent has been based upon NATO having sufficient nuclear strength that any attack by the Warsaw Pact nations would have been futile, counterproductive, and self-destructive.
We have to face the fact now that, as the western nations, particularly the United States, are moving quite admirably in
the direction of nuclear reduction, we are losing some of the deterrent capability of NATO. We are losing it because we have always been seriously and critically inferior to the Warsaw Pact nations. It is a question of doubt in the near future as to whether the NATO nations will have the deterrent effect upon the Warsaw Pact that they have exercised for 40 years.
One sees that when one considers the type of disparity between the NATO and Warsaw Pact nations. Let us consider the following. NATO has 53 divisions of combat groups; the Warsaw Pact nations have 72. NATO has 8,799 tanks; the Warsaw Pact nations have 24,200 tanks. NATO has 1,834 combat planes; the Warsaw Pact nations have 2,997 planes.
It is clear that, on the basis of conventional arms alone, NATO is critically inferior to the capability of the Warsaw Pact nations. This is particularly so in the instance of the Canadian brigade. We support this Government. That can be greatly encouraged by the way in which the Government has increased the force of the Canadian brigade in NATO. This increase has not only improved the morale of our troops there, but improved the respect with which Canada is held by its NATO partners.
Just consider these matters, Mr. Speaker. The Canadian brigade, in spite of it receiving an additional number of combat troops, lacks even a field hospital to care for the wounded, should we be involved in combat. The NATO brigade is depending on the civilian hospital at Lahr, Germany. The Warsaw Pact nations have guns that can destroy any Canadian tank with a single shot. On the other hand, the Warsaw Pact nations have tanks that no Canadian gun can penetrate.
Therefore, I raise this issue in the House this evening to encourage the Government to continue or even to escalate the efforts that it is making to increase and improve Canada's defence capability on this continent, and particularly in Europe. As Canadians we have always believed that it is better to have the conflict there. That is one reason why for 40 years we have devoted ourselves to participating in NATO. But we have to see that this is a critical question now. If NATO is to be effective, it must have sufficient capability to deter potential Soviet aggression. I am not looking only to the short term. We know for now Moscow has a Government that is more interested in other priorities. That Government may not last forever.
We may very well, before many years have gone by, see the Soviet Union under an administration that will be interested in aggression. For those in the House or in the public concerned about the moral dimension of this, I quote from a papal message to the United Nations Special Session on Disarmament in June, 1982, in which His Holiness said:
In current conditions, deterrence based on balance .. . may still be judged
morally acceptable.
February 23, 1988

I quote also from the Archbishop of Canterbury, speaking to the General Synod of the Church of England in 1983, when he said:
I do not impugn the honesty or good faith of those who support unilateralism, but 1 believe there is also moral seriousness in the multilateral approach.
It is a prime moral responsibility of a Christian to build peace in an immoral
world. The way of negotiations and building new international institutions also
demands moral courage and perseverance.
Deterrence has worked for 40 years. Let us be sure that it will continue to work.


Mr. Bud Bradley (Parliamentary Secretary to Minister of National Defence):: Mr. Speaker, 1 am honoured to respond to my colleague, a person who all of us in the House know has worked extremely hard for Canada and her defence. Mr. Speaker, 1987 has seen dramatic progress in the bilateral negotiations on arms control matters between the United States and the U.S.S.R. Most tangibly, an INF agreement was signed at the Washington Summit in December. This agreement is an historic achievement for NATO and a tribute to the United States and allied steadfastness and cohesion in pursuit of a sound outcome.
Several aspects of the INF Treaty are particularly noteworthy as precedents for political future arms control agreements. First, the INF Treaty provides for asymmetric reductions with the Soviets eliminating more INF missiles than the United States. This is a useful precedent for other arms control agreements where NATO-Warsaw Pact imbalances exist, for example, conventional. Second, it establishes an unprecedented new and rigorous verification regime involving extensive onsite inspection. Third, by eliminating an entire class of U.S. and Soviet nuclear systems, it demonstrates the feasibility of a far more ambitious approach to arms control than was previously believed possible.
Finally, it shows that forced modernization and improvement programs and arms control agreements are not alternatives but constitute complementary elements in NATO's efforts at preserving security at a lower level of forces.
The possibility of an arms control agreement was foreseen in the defence White Paper tabled in the House last June. Effective defences complement arms control as elements of Canadian security policy. While conventional forces cannot entirely replace nuclear weapons, the elimination of NATO INF missiles places a higher premium on conventional defences and so makes the efforts to improve Canada's military contributions to the alliance all the more important.
At the same time, the importance of redressing the current imbalance in conventional weapons in Europe is a top priority for this Government, as well as for NATO as a whole. NATO is expending considerable energy and resources in force modernization and standardization efforts.
Our White Paper attempted to address this problem in part by consolidating our commitments in both land and air within NATO's central region. This will rationalize and make more effective our input in stabilizing the conventional balance.
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Equally important, however, are the steps that we, as part of NATO, are taking in redressing the balance. We are currently engaged in exploratory mandate negotiations with representatives of the Warsaw Pact in Vienna. It is our hope that these preliminary talks will bear fruit, and that two new conventional arms control negotiations will commence some time late this year, or possibly early in the new year. These talks would address the conventional problem from two complementary directions. One would negotiate confidence building measures that would add a measure of predictability to military activity in the land mass of Europe.
I might add that these talks would build upon the already successfuly concluded Stockholm Conference which, in 1986, produced an agreement on confidence building and is currently under implementation.
The second negotiation would tackle the more difficult prospect of eliminating disparities in certain categories of conventional forces which are key for launching of surprise attacks and large scale offensive actions. We will try to establish a level of force which would remove the ability of one side to threaten the other, but would retain an ability to meet legitimate defences.


TAX REFORM-AMOUNT OF TAX COLLECTED BY GOVERNMENT-WHITE PAPER SALES TAX PROJECTION
Aideen Nicholson: Mr. Speaker, on December 17, 1987 I asked the Minister of Finance (Mr. Wilson) a question about the Government's proposed tax reform.
Before the 1984 election the Minister said in this House "We would not raise taxes. Tax levels in Canada are already too high". Since 1984 Canadians have seen an unprecedented tax grab, much of it from the pockets of low and middle-income Canadians. No previous Government has raised taxes at this rate. I detailed many of these increases in my speech on the borrowing authority on February 12, so I will not repeat the detail now. Since the Conservatives have been in office, they have increased revenues from manufacturers' sales tax by 67 per cent, from personal income tax by 45 per cent and from corporate income tax by 8 per cent.
The Minister has projected that personal income taxes will be reduced by about $11 billion over the next five years. In other words, over three years he increased them by $22 billion while planning to return $11 billion over the next five years.
Corporate federal tax revenues are expected to increase by about $5 billion. The federal manufacturers' sales tax revenues are expected to increase by more than $3 billion over the next five year period, although again, the Minister says that the federal sales tax is destructive of the economy. Yet he continues to increase it.
We are supposedly left with the figures I just quoted, with a more or less revenue neutral tax reform package in phase one. I say more or less because regrettably it does have a lot of

February 23, 1988
Adjournment Debate
smoke and mirrors in it. The Minister's own figures on page 30 of the tax reform 1987 Economic and Fiscal Outlook shows $2.7 billion are accounted for by accelerated remittances, personal tax instalments and sales and excise tax payments. Other authorities, and when I say authorities I refer to the Bank of Montreal's tax newsletter and Peat Marwick's more recent tax letter-where the amount of smoke and mirrors- that is my wording not theirs-assess it at almost $4 billion, and in another case at over $3 billion.
If we also look at page 47 of the White Paper, Economic and Fiscal Outlook, it appears that Canadians will have paid almost $17 billion in federal manufacturers' sales tax by 1990 as opposed to $7.5 billion in 1984-85.
The so-called Phase I of the Government's tax reform proposals is supposed to stand alone, but the Government has quietly introduced a major change in public policy here, namely, a shift from income tax to consumption tax. In Phase II, the Government proposes to abolish the manufacturers' sales tax. In its place we will see a multi-stage sales tax on goods and services. At every stage of the production chain, all the way down to consumers, each business will charge tax on its sales and receive a credit for a tax payable on its purchases. The consumers, however, as the last link in the chain, ultimately bear the tax. This new sales tax is supposed to take care of the $2.7 billion revenue shortfall. It is supposed to replace the manufacturers' sales tax and to allow for removal of the surtax on income taxes and allow a further decrease in income taxes. We are still, however, short of real clear figures.
Again, how much is the Minister expecting to raise by his new sales tax, bearing in mind that the Government has already, in its term in office, increased taxes to an unprecedented limit? How much does the Minister reckon that he can take out of the economy without risking provoking a recession?


Benno Friesen: Mr. Speaker, I listened with care to the remarks made by the Hon. Member. I would hope that in the interests of fairness and accuracy, she would reexamine some of the comments she made, particularly her opening comments with regard to an increased tax burden on lower and middle-income families. That really is not an accurate statement.
The Hon. Member for Trinity (Miss Nicholson) has asked if tax reform means that the Government will generate more sales tax revenues than that projected in the White Paper. When this Government came to office, it committed itself to a program of economic renewal and sound fiscal management. Since September of 1984, this Government has succeeded in bringing the deficit under control. Interest rates have fallen dramatically. There are over a million more people working today than when we came to office. Clearly, the Government's approach is working.
An important ingredient of the Government's program is comprehensive tax reform. Canadians want a fair and progressive tax system. They want a system that encourages individual initiative and one in which all high-income individuals and profitable corporations pay their fair share of tax. As well, they want a tax system that supports Canada's ability to compete in world markets, one that creates increased employment opportunities for Canadians.
In stage one of tax reform, we have lowered personal income tax rates and converted a number of exemptions to credits. As a result, and I hope the Hon. Member notices this, 850,000 lower-income Canadians will be relieved of paying any income tax. Eight in 10 households will see their income taxes reduced. The average decrease will be well in excess of $400 per year. These are real benefits to average Canadians.
Still more needs to be done. The Government believes that a fair sales tax should remain one of the key pillars of the tax system. However, the current sales tax is clearly no longer adequate, and I think all three Parties in the House would agree with that. The Government has therefore made a commitment to replace the current sales tax with a more broad-based multi-stage tax in the second stage of tax reform.
The new system will both encourage economic growth and, at the same time, increase tax fairness. Indeed, the new system will be fairer than any sales tax that has existed to date. Lower-income Canadians will benefit from the refundable sales tax credit which will be substantially enriched by hundreds of dollars. Middle-income families as well will benefit from further income tax reductions. As in stage one, stage two will be revenue-neutral to the treasury.
As we have said before, the rate will be determined by the need to generate sufficient revenues to replace the revenues from the current sales tax, to remove the income surtaxes, to provide a substantial enrichment of the refundable sales tax credit for lower-income Canadians and to fund further income tax reductions for middle-income families. Stage two of tax reform will not therefore generate any new net revenues to the treasury.


CANADA MORTGAGE AND HOUSING CORPORATION-SHORTAGE OF AFFORDABLE HOUSING IN TORONTO
Mr. Alan Redway (York East):: Mr. Speaker, I want you to think back a few years. Do you remember the very first apartment you ever lived in? I do not know about you, but I certainly do.
The first apartment I lived in was in a part of my community that is known as Thorncliffe Park. When Louise and I were married, we rented an apartment in that community. At that time, it was a newly developed community, virtually a new area. There were a lot of apartments available. We found a rather small apartment, a one-bedroom. It was not a big one-bedroom, but it cost us the grand sum of $100 a month in rent. That does not seem like very much today, but I can guarantee that $100 a month in 1962 was a lot of money.
February 23, 1988

In order to induce us to rent that apartment at that time, the landlord actually offered us one month free rent. In fact, other landlords in the same community were offering free trips to Florida just for signing a lease for an apartment there. That is really a thing of the past as far as Metropolitan Toronto is concerned. I have heard that in Montreal, for instance, they are offering as much as three months free rent for signing a lease, but that is not the case in Metropolitan Toronto these days.
At the moment, in fact, the rental housing situation is really drastic. The vacancy rate is less than 1 per cent, in fact it is 0.1 per cent. Do you know what it is in Edmonton, Mr. Speaker? I do not know either, but I do know that in Calgary it is 5 per cent. The vacancy rate is much higher in Calgary than it is in Metro Toronto at the moment.
The whole situation started to change in the early 1970s. Changes in our federal income tax, which prevented developers from writing off extra expenses and raised their taxes and rent control by way of the rent review process which the provincial Government implemented, combined to reduce the amount of rental housing that was built until there is now a real shortage of rental housing.
It is not only in rental housing that there is a problem in Metropolitan Toronto. There is a shortage of all sorts of affordable housing. For instance, the average price of a singlefamily home these days in Metro Toronto is somewhere around $200,000. A two-storey three-bedroom square plan house, the kind that my parents bought in 1939 for about $7,000, the kind that Louise and I paid about $18,000 for 25 years later in 1962, now sells for about $325,000 in Metropolitan Toronto.
That is incredible. In the first 25 years it went up by about $10,000 and in the most recent 25 years it has gone up $300,000. That is not affordable housing. Louise and I could not have afforded to buy a house like that if we were starting out today and, quite frankly, we could not afford to buy it right now, even on the enormous sums that you and I make, Mr. Speaker, as Members of Parliament.
Thank goodness that Louise and I have a house, but I wonder about our daughters, Kim and Andrea. Kim is finished university now. She is working but she is living at home with us again. She is back at home. Andrea is at university now but she will be through in a couple of years. What are both Kim and Andrea going to do and what are so many young people going to do these days? They will not be able to afford to buy a house like Louise and I did, my parents did, or my grandparents did, and they will not even be able to find an apartment.
Kim and Andrea are not alone. They are like thousands and thousands of other young people who are really stuck in the housing market in Metro Toronto. Besides young people there are middle-aged people, senior citizens, and people who have come to Toronto from other communities such as Edmonton
Adjournment Debate
and Vancouver. People have come to Toronto looking for work and they cannot find a place to stay either. As well, of course, there are people coming from other countries who cannot find places to stay either. There is just not any affordable housing available.
What about the 17,000 seniors, middle-aged people, and singles who are on waiting lists in the greater Metropolitan Toronto area for affordable housing of one sort or another? There is just nothing for any of them. What is the answer to this problem?
Of course, some responsibility must lie with the private sector, some with municipal Governments, and some with the provincial Government. You, I and the Parliamentary Secretary know that the federal Government has a responsibility to provide affordable housing for Canadians.
The Parliamentary Secretary will tell us in a minute what the Government will do about this. However, I do not want him to tell me that CMHC built 4,800 new units in Toronto in the last 18 months. I do not want him to tell me that CMHC is involved in construction or renovation of 15,000 homes across Canada, and I certainly do not want him to tell me that my daughters, Kim and Andrea, better live in Calgary, Edmonton or Vancouver and commute to Toronto to work.
I want him to tell me what the Government will do. That is what I and other Canadians want to know from the Parliamentary Secretary and the Government tonight.


Benno Friesen: Mr. Speaker, at the outset, the Member omitted one other chilling fact regarding the housing industry in areas like Toronto. It is that if there should be a reversal in the economy in the city, and a family has bought a $300,000 house which, a year later, is valued at $150,000 if there is a recession, they have lost a fortune. Alternatively, if they work for a company and are transferred to another part of the country, they may do well selling the house in Toronto and moving to Moncton or Vancouver. It may be difficult for a family which has to move from Moncton or Vancouver to Toronto, however.
I recall some eight years ago when the housing market was so hot in Vancouver. When the crash came, a number of people were very badly hurt because of an artificial market.
Is the Hon. Member asking the Government to get into the financing of the housing industry? I suggest to him that there are some financial institutions that would express concern about a government heating up the market too much with easy money by getting into the housing industry. That would not solve the problem in Toronto. If it becomes too easy to finance, the market could be heated up even further.
The Government has helped in social housing in places like Toronto, Vancouver, Winnipeg and Montreal. While people may choose of their own volition to move from the downtown

February 23, 1988
Adjournment Debate
area of Toronto to the suburbs, and are willing to pay the extra cost of housing, it is another matter if they are people who are disadvantaged in one way or another and are caught in the squeeze of the housing market in Toronto.
The Government has been involved, through CMHC, in what is called social housing programs where there is a subsidy for those individuals. That also comes under somewhat of a misnomer because it is called affordable housing. It may be affordable housing for the people who are renting because they pay 25 per cent or 30 per cent of their income for the apartment, but I suggest to the Hon. Member that it is very expensive housing for the taxpayer. When mortgages were running at 18 per cent, it cost the taxpayer some $500,000 for a flat in social housing during the life of a mortgage.
The solution is not easy. Simply pumping more money into that area in Toronto will not solve the problem. I believe that we must ensure that the market supply is adequate. If we believe in supply and demand, the market supply must be adequate in order to drive the price down. The market must provide quality housing and we must watch the contractors and the developers so that they are not gouging the public and taking unreasonable profits in that whole area.


The Acting Speaker (Mr. Paproski):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow afternoon at 2 p.m., pursuant to Standing Order 3(1).


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SECOND SESSION-THIRTY-THIRD PARLIAMENT 36-37 Elizabeth II

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Published under authority of the Speaker of the House of Commons by the Queen's Printer for Canada
Available from Canadian Government Publishing Centre, Supply and Services Canada, Ottawa, Canada K1A 0S9.
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Monday, December 14, 1987
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Prayers