1988-02-25

Mr. Jim Hawkes (Parliamentary Secretary to Deputy Prime Minister and President of the Privy Council):: Mr. Speaker, pursuant to Standing Order 106(8), 1 have the honour to table, in both official languages, the Government's response to petitions, Nos. 332-3702, 332-3745, and 332-3795 to 332-3798 inclusive.



STRIKING


Mr. Gabriel Fontaine (Levis):: Mr. Speaker, I have the honour to table in both official languages the 51st report of the Striking Committee. With the consent of the House, I intend to move the adoption of the 51st report later today.
[Editor's note: See today's Votes and Proceedings.]

[DOT] (MIO)



PLANT BREEDERS' RIGHTS ACT


Frederick James (Jim) Hawkes: Mr. Speaker, after consultation with the other Parties 1 think you will find that there is unanimous consent for the following two
motions. The first deals with the reference to committee of Bill C-107, the plant breeders' rights legislation. It is as follows:
That, the Order for second reading and reference to a Legislative Committee of Bill C-107, An Act respecting plant breeders' rights, standing on the Order Paper, be changed to read second reading and reference to the Standing Committee on Agriculture.


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


Mr. Murphy:: It is agreed that the Parliamentary Secretary should move these motions. They meet with our concurrence.


Mr. Jacques Guilbault (Saint-Jacques):: Mr. Speaker, indeed we have been consulted about the motion just moved by the Parliamentary Secretary and we are prepared to give consent.


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


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Frederick James (Jim) Hawkes: Mr. Speaker, under the same terms I move:
That, the Standing Committee on Energy, Mines and Resources be authorized to travel to Chalk River, Ontario on March I, 1988 for the purpose of visiting the Chalk River nuclear laboratories as a part of the committee's ongoing study on nuclear power and that the necessary staff accompany the committee.


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


Some Hon. Members:: Agreed.


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


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
[Stage Direction]
February 25, 1988
Petitions


Gabriel Fontaine: Mr. Speaker, if the House agrees, and seconded by the Hon. Member for Brome- Missisquoi (Mrs. Bertrand) I should like to move the adoption of the 51st report of the Striking Committee which I tabled in the House earlier today.


[Stage Direction]
Motion agreed to.


Mr. Ian Waddell (Vancouver-Kingsway):: Mr. Speaker, I have a petition which I have been keeping for some time because it is so important. It deals with the so-called free trade deal.
The petitioners feel that the proposed free trade deal is a threat to Canadian sovereignty and that it will mean that the Canadian Government cannot effectively control foreign ownership, develop Canadian energy resources in the best interest of Canadians or equalize opportunities between the regions.
They pray that there be a general election held before the free trade deal is implemented so that the Canadian people can either accept it or, in the view of the petitioners, reject it.
The petition is from Vancouver, British Columbia and other parts of the Lower Mainland of British Columbia.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Frederick James (Jim) Hawkes: Mr. Speaker, question No. 260 will be answered today.


Mr. Robinson: 1.	How many Canada Employment Centre (CEC) Local Advisory Councils (LACs) are currently active?
2.	Has there been any process of evaluation within the Department of Employment and Immigration for LACs and, if so (a) what are the results of
this process (b) have LACs been effective in attaining their goals and objectives?
3.	Are there any specific examples of suggestions emanating from LACs that have resulted in changes or improvements with regard to national employment policies and CEC programmes or services and, if so, what are the details of such examples?
4.	Are changes planned to the mandate, structure or role of the LACs and, if so (a) what specific changes are being considered (b) when will they be implemented?
5.	Will the Minister convene a meeting of the chairpersons of LACs and, if so (a) on what date (b) in what place will this meeting be held?


Hon. Benoit Bouchard (Minister of Employment and Immigration):: 1. One hundred and fifty-eight.
2.	No.
3.	Yes. Examples: Many Local Advisory Councils (LACs) have pointed out that certain Canadian Jobs Strategy (CJS) procedures were too complex. As part of the LAC process, all LAC suggestions are circulated to program managers withing the Commission. These comments on procedures were extremely useful to the task force reviewing administrative practices relating to CJS.
A number of LACs suggested the eligibility criteria of the Job Development program were too restrictive, especially in respect of Severely Employment Disadvantages (SED) persons. In June, 1987, the SED option was moved from Job Development to Job Entry, thus eliminating the requirement that participants must have been unemployed 24 of the last 30 weeks.
LACs expressed the desire to be informed of upcoming CJS yearly budgets earlier. For the 1987-88 fiscal year, steps were taken to ensure that most councils were able to review their tentative allocations well before the start of the fiscal year.
Concerns were expressed about the designation process of occupations under Skill Shortages, and how the program ought to help more women enter non-traditional occupations. In June, 1987, it was agreed that non-traditional occupations would be designated to help meet the demand for qualified women that will result from employment equity plans or special measures undertaken by employers.
A large number of LACs complained about the delay in having skills designated centrally throught National Headquarters. Authority to designate selected occupational skill shortages was subsequently delegated to regional heads.
A B.C. LAC asked that the CEC give higher priority locally to upgrading course and CEC complied.
Another LAC in B.C. suggested CEC send information on CJS to 100 selected employers and it was done.
After discussing the services provided by the CEC, a B.C. LAC recommended that counselling be introduced for a test period of four months. The CEC manager accepted and implemented the proposal.
February 25, 1988

An Alberta LAC recommended that the processing of applications be simplified. Changes which should result in a shorter time lapse between submission and approval have been made.
4.	While the Local Advisory Council process is under review, no specific changes are at present being considered.
5.	A meeting of Local Advisory Council Chairpersons is not planned at the present time.


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


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


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Wednesday, February 24, consideration of the motion of Mr. Wilson (Etobicoke Centre):
That this House approves in general the budgetary policy of the Government.
Mr. George Minaker (Winnipeg-St. James):: Madam Speaker, it is indeed a pleasure for me to take part in the debate today. As your Honour may be aware, last evening I spent about four minutes talking about the amendment that was before the House. I would like to thank my colleague, the Whip of my Party, for allowing me to participate to the fullest in this debate on the Budget. I say that because of the fact that the Budget presented by my colleague, the Minister of Finance (Mr. Wilson), on February 10 shows that the finances of Canada are now under control. This is something which has been long overdue. For many years the finances of Canada were not under control.
I would like to remind Hon. Members what the Prime Minister (Mr. Mulroney) said on March 10, 1984, when he was the Leader of the Opposition. I want to quote his words because they set out the formula that has been used by our Government since 1984 to bring our finances back under control. He said, "We are going to create a new economic environment in Canada by making it clear for everybody that it is the private sector, not the state, that is the driving force of the economy".
That is the formula that has been used by our Government since we took office in 1984. It has been the unleashing of the entrepreneurial spirit that has seen our economy grow at
The Budget-Mr. Minaker
record rates. An unprecedented number of jobs have been created. Some two-thirds of the 1,150,000 jobs that were created since we took office are above average in terms of pay. They are technical jobs. We can see that the quality of job creation is quite positive.
Just how have these jobs been created? Unlike the previous Liberal administration, we have put policies in place to let the private sector flourish. When was the last time you heard the term "make work project", Madam Speaker? 1 suspect it was probably before the last election.
The Liberals borrowed money to hire some people who were not receiving UI benefits. They would put them into a temporary work situation until they qualified for unemployment insurance benefits, at which time they would collect benefits under that program. It was a cruel and vicious circle inflicted upon the dignity of thousands of Canadians. That was the policy of the former Liberal Government when it came to job creation.
We believe in working with the private sector, not against it. An excellent case in point is the Canadian Jobs Strategy. It is a highly successful program designed to give individuals the necessary tools and skills to play an important part in our economy and our way of life. It gives people hope and a future. It does not just throw money at problems as the Liberals used to do.
How have we aroused the entrepreneurial spirit in Canada again? How have we revived it? It was done through four different policy objectives as laid out by our Government. The first objective was reform of the regulatory system; the second one was reform of the tax system; and the third was securing and enhancing access to markets outside of Canada, both through the GATT and also through the free trade agreement that is presently before us. Finally, we have controlled Government finances to reduce the deficit and the debt.
I wish to highlight some of the reforms of the regulatory system. Basically, it is setting up a fair set of rules in order that businesses have confidence in our country and in our Government and will invest money to create jobs. As we all know, in 1984 business confidence was very low. People did not know when they invested the money in our country whether the laws would change tomorrow or the next day and they would be left with debts or taxes that they could not handle.
As mentioned by the Minister of Finance on February 10, we stabilized the regulatory system by deregulating the energy and transportation sectors. We opened up financial markets to global opportunities and stimulated competition and financial services. We modernized business framework legislation dealing with competition, policy, copyright and patents providing better protection for the public interest. We privatized Crown corporations to reduce Government involvement and interference in the market-place. Furthermore, we

February 25, 1988
The Budget-Mr. Minaker
created Investment Canada to encourage and welcome capital from abroad. We know how successful that has been today.
The importance of a flexible set of regulations in which the private sector can operate seems to be lost on the Opposition. In fact, the importance of the private sector is completely lost on our socialist NDP friends. They said that the private sector would not respond to the challenge of creating jobs. That is what they said in 1984, 1985, 1986, and 1987. They said that the private sector would not respond and create jobs if we made a climate that encouraged investment.
There are 1.150 million new jobs in Canada. Some 80 per cent of them are permanent jobs. The majority of those jobs are now held by the women of our country. Yet the Opposition said that that could not happen. That is how wrong they were. The 1.150 million jobs is a pretty good response.
Why 1 am amplifying that, Madam Speaker, is that our hon. friend, the Hon. Member for St. John's East (Mr. Harris) rose yesterday on debate and stated that Governments do not create jobs. He is correct; Governments do not create jobs, the private sector creates jobs. That is where those jobs have been created. I compliment the private sector for creating those jobs.
The other policy that is part of this whole program is tax reform, and making the system fairer to individuals in order that we can compete in international markets. If someone goes out to work and is asked to work overtime or to work a little harder, he will if they knows that he can keep a lot of that money in his pocket. If that person has to turn around and pay it out in taxes, he will surely say he would rather have the time off.
Now there are three tax brackets. Personal income tax has been reduced by some 8 points. Therefore, people now want to go out and work. That means there will be more productivity and more competitiveness with the rest of the world. Starting this year Canadians will pay less personal income tax; 8 out of 10 households will have personal income taxes reduced; 850,000 low-income individuals will have their taxes reduced to zero; 850,000 people in Canada will no longer pay taxes; 9 out of 10 Canadians who are over 65 will have their income tax reduced or eliminated. In the corporate sector, corporate income tax rates have been lowered.
The third policy that we had to create those jobs and increase the economy was securing and enhancing access to foreign markets. We know how important the export market is to our country. Trade with the United States directly or indirectly creates 3 million jobs in our country. Why would we sit back and not do anything when we saw elements in the United States attempting to restrict the export of Canadian goods? We could not sit on the fence and watch those jobs being taken away. We took the objective and went out and signed the free trade agreement, which will mean more jobs for Canada, more jobs for youth.
The free trade objective for expanded markets will mean lower prices and more products for our consumers. It is not
only job creation, there are other benefits. It also sets a precedent for other countries. If two major countries in the world can establish a free trade agreement, why can't other countries? It opens up the GATT area. Another objective of the Government is to export our goods to other parts of the world.
The people of Canada have a choice when it comes to free trade, and the Opposition also has a choice. If we do not want to change, we can look inward and set up tariffs to keep all other goods out. We can try to trade within our own little circle, put the flag around ourselves, and try to live within our own country. That is the objective of the NDP and the Liberals. That is what they want to do. They want to rip up the free trade agreement, wrap themselves in the flag, and say, "We can live within ourselves". Where are they going to get the 3 million jobs related to exports? Who is going to look after that? How are they going to get the income tax from the people who are working to pay for the social programs that they so greatly called for, and with which we agree?
There is the other alternative. We can reach out and build bridges with the rest of the world, compete and grow with the rest of the world. We are already doing that. In fact, we are competing better than other countries. That is the approach that free trade gives us. It will give us more jobs.
The other area of policy that we, as a Government, felt was very important was deficit control. This point cannot be overstated. For the last three years Government spending has increased at an average rate of less than inflation. That compares with the average increase in spending by the Liberals when they had the mandate in the last four years of 14 per cent per year. That is what the deficit grew at. It has been reduced in a systematic manner in order that we do not take away social programs and have an impact on the economy of our country by deciding to cut helter-skelter, putting people out of work, or taking away social programs. The people of Canada do not want that approach.
Yesterday I listened to the Leader of the Opposition (Mr. Turner) talk about the Minister of Finance and his accumulated deficit. I would like to bring something to your attention, Madam Speaker, that I found very interesting about the Right Hon. Leader of the Opposition who made this statement:
After three and a half years the Minister's armour is not nearly so shiny.
Instead of reducing the debt, thanks to this Minister and this Government, it
has gone up to $293.4 billion, an increase of $116.6 billion or 66 per cent in the
last three and a half years.
The Leader of the Opposition failed to say that when we took office, in that first Budget we had to find $22 billion from the taxpayers of Canada to pay for the interest on the debt that the Liberals had accumulated, some $190 billion. Not counting the debts added on by the Government, but if one multiplies that $22 billion by four it amounts to $88 billion worth of debt. That is a deficit that is there because of interest on the debt created by the Opposition.
February 25, 1988

If we subtract that figure it comes to $28 billion in accumulated deficits incurred while we have been the Government. If one takes away that $22 billion of debt charges for which we accepted responsibility to pay on the outstanding debt, we are talking about $28 billion of accumulated debt that is there, if one wants to accuse this Government of it. That amounts to approximately $7 billion a year.
I wish to quote from an article entitled "The debt we bear" printed in the Globe and Mail today.
If Ottawa had no accumulated debt, Ottawa would have no budgetary
deficit. In fact, the Main Estimates published Tuesday confirm there would be
$3.1-billion surplus in 1988-S9 if only we faced no bill for past borrowing.
I think that proves my point that $88 billion of the deficit that has been accumulated while we have been office is for the debt created by the former Liberal Government.
[DOT] (M30)
I should like to look at what would be the alternatives if we did not take the approach of trying to get the private sector involved, trying to get free trade, trying to expand our markets, and so on. What has the Opposition offered as an alternative? I guess a Liberal Government would tear up the free trade agreement. That is what the Liberals have said, and that if they did not have the numbers they would form a coalition with the NDP. We know what the New Democrats would do with free trade. They would outlaw it as well.
Free trade means a lot to those of us in Winnipeg and elsewhere in western Canada. In fact, the Opposition forgets that the youth of the country will probably benefit most from free trade. As technology advances, they will be prepared to take these high priced jobs. Not only that, but in my riding of Winnipeg-St. James we have a company called Macdon Industries which manufactures swathers. Basically the farm machinery industry is a free trade market. The majority of its products are sold to the United States. Some 80 per cent of its products go to the United States, and it employs some 200 plus people. This is an example of what free trade means to us in western Canada. The youth are looking forward to it. They want the three million plus jobs which will exist because we will still be trading with the United States.
Speaking about youth, I should like to indicate the results of our policies to encourage the private sector to invest in Canada again. This is what it has meant to the youth in terms of employment. The youth unemployment rate has fallen from 18.3 per cent to 12.7 per cent since September, 1984. I think it is worth repeating. It has fallen by 5.6 per cent, from 18.3 per cent to 12.7 per cent. In comparison, the youth unemployment rate rose by 5.4 per cent, from 12.9 per cent to 18.9 per cent, during the term of the last Liberal Government.
Free trade means more jobs to us in western Canada, particularly those of us in Manitoba where we export hydro energy and pork products, for example, to the United States. Some seven out of every ten hogs raised in Manitoba are exported to the United States. It is big business to Manitoba.
The Budget-Mr. Minaker
These are the things that have been protected and even expanded. Our oilseed producers will now have a market in the United States. They are encouraged. If one talks with the agricultural people, one finds out that they are very happy with the free trade agreement. The marketing boards have been protected.
The alternative of the Opposition would be to throw it out and go back to the old system of watching the United States knocking off one, one hundred, or whatever, of the three million jobs that are directly or indirectly related to free trade.
What would the Opposition do about defence? We know what the NDP would do about it. It would get out of NORAD. The Air Command Centre is in my riding of Winnipeg-St. James. It employs almost 700 people directly in Winnipeg. It is part of the NORAD system. What would the New Democrats do? Would they say, "We will ignore the United States?" The United States is part of the Early Warning System. Would they buy all the AW AC bombers to fly over Canada to protect it? What would they do with the Air Command Centre? Would they transfer it to Oshawa because of their regional development policies? Obviously the Leader of the New Democratic Party supports and recognizes regional development as being basically in the centre of Canada right now. I imagine that he is all for it, because he does not mind when they invest billions of dollars in Oshawa and GM Motors and so on? Would they continue development? What would they do with the frigates that we will build in the Maritimes?


Mr. Cassidy:: Who is in power?


Clement George Minaker: We know the Hon. Member from Ottawa Centre would move them out of there. These are the alternatives, and I think the people of Canada recognize them. They want to have another chance to keep the economy growing.


Michael Morris Cassidy: That is why you are third right now.


Clement George Minaker: That is why they are supporting what we are doing financially.


Mr. Orlikow:: Madam Speaker, I would like to ask several questions of the Hon. Member for Winnipeg-St. James (Mr. Minaker). First, he talked about a farm machinery company in Winnipeg which will benefit from free trade. Does he not realize that we have had free trade in farm machinery for years and that it has not helped Massey-Ferguson in Brantford?
He also talked about a company which is into computers. I should like him to comment on the representations which were made by Mr. Loewen, the Chairman of Comcheq, a very successful computer company in Winnipeg, which heads the Canadian Association of Independent Companies operating computer companies. He has made several representations. He appeared before the parliamentary committee and explained why the free trade agreement for the computer industry, which is so involved in the service sector of the economy, would be a disaster.

February 25, 1988
The Budget-Mr. Minaker
Why does the Hon. Member not give some real consideration to the problems of companies in Manitoba rather than the nonsense he has talked about?


Clement George Minaker: Madam Speaker, I should like to thank the Hon. Member for Winnipeg North (Mr. Orlikow) for his question. He talked about the computer industry in Manitoba being a major industry. Perhaps he should check into the facts of life of the economy of Manitoba and where the major exports are coming from.
To give an idea of the trade figures in Manitoba, 7.8 per cent of our trade with the United States is in electricity and 6.3 per cent is in aircraft parts. I might say that the majority of the aerospace industry in Manitoba is in my riding. It would be affected by the NDP policies which would take us out of NATO and NORAD.
I cannot understand why the Hon. Member for Churchill (Mr. Murphy) would not be concerned about the effects of the free trade agreement on the softwood lumber industry which is mainly in northern Manitoba. Some 6.1 per cent of our softwood lumber, the majority of which I think is produced in his riding, is exported to the United States, and then there is 4.8 per cent in motor vehicle parts.
I should like to deal now with the agricultural sector, from where the majority of the exports come-$52 million in live animals, $56 million in fresh and frozen meat, and $135 million in other food products. According to Manitoba's Bill Vaags of the Canadian Pork Council, our industry is the largest agricultural exporter to the United States, with a 1987 projection for total live swine and pork sales in the order of $700 million. I could go on.
We recognize that certain industries will have complications, but I am sure that they will be as competitive as anyone else once they realize that they can compete with the United States. We know that we can compete. We beat them at hockey. We may not be able to beat them at football, but that day will come. However, we are not talking about sports. We are talking about business people. We are productive and efficient. We can compete with the United States, and the free trade agreement will be good for us.


Mr. Jardine:: Madam Speaker, I congratulate the Hon. Member for Winnipeg-St. James (Mr. Minaker) on his very excellent speech. The Hon. Member noted that he has a large military establishment in his riding with the headquarters of Air Command, the head of the Air Force. I can understand and appreciate his concerns in respect of the military and New Democratic Party policy.
The NDP certainly advocates a withdrawal from NATO. It would also oppose the establishment of any NATO facility on Canadian soil. This causes me concern and it causes concern among the people of my riding.
[DOT] (M40)
Then there is the policy of the NDP about the new frigate program. Saint John, New Brunswick, has one of the highest, if not the highest, rates of unemployment of any major city in the country and the NDP's policy would, of course, have been to split that frigate program, dividing it between one community and another.
The New Democrats say they would save $1 billion a year by bringing the troops back from NATO. That, of course, is a false statement. If the New Democrats fired every serving member they might save half that total figure.
The New Democrats also advocate using the Canadian Forces in new international roles. The military would become a rapid deployment force to strike across the world in response to military instability or national disasters. What are the New Democrats advocating, Madam Speaker? Are they advocating super police force for international affairs? Would the Hon. Member give me his views of what the NDP policy would cost and its lack of effectiveness for the security of Canada?


Clement George Minaker: Madam Speaker, I thank my colleague for bringing that matter to my attention. Both he and 1 have defence establishments in our ridings. The NDP's policy on defence would be very costly and very dangerous. I just reaffirm what I said earlier, that in my own riding the air command centre employs directly almost 700 people. Not only that, it has a budget of some $507 million and controls a total personnel of 31,000. The major part of its responsibility is NORAD and If the troops were to withdraw from NORAD, the U.S. portion alone of the north warning system today is $3.2 billion, would the New Democrats pick up all that cost? Are the New Democrats going to buy the six AWACs that scan our North American continent putting up that electronic shield of protection or fence, if you like? Will the NDP put up the $3 billion for that?
With regard to the NATO withdrawal, I think in the NDP paper the New Democrats said they would save something like $1 billion a year by bringing the troops back from NATO. That is totally false, Madam Speaker. Even if all the NATO troops were laid off, the saving would be about $400 million. If I understand the statement, the New Democrats say they have no intention of laying troops off. If there are no lay-offs, the $400 million which the NDP would save was primarily the cost of the troops, so where are the savings? Basically the New Democrats achieve no savings by withdrawing troops from NATO and they take on the full responsibility for most of the defence. I think Canadians recognize that. Canadians want us to stay in NORAD and in NATO.
As well, a lot of our youth want to join the forces. There are highly technical jobs in our defence forces. Our youth are looking there with anticipation. A young constituent of mine wants to become a pilot. It is a very technical job, as it always has been. Young people want these kinds of jobs. If the NDP is talking about withdrawing troops yet saying there will be no
February 25, 1988

lay-offs, there is no major saving. There will be complications. If anything there will be increased costs, probably taken from the social services or paid for by raising taxes or increasing the deficit.
The New Democrats do not believe in deficits. They do not think there are any costs. They would rather print money and see our dollar go down to 50 cents and battle those problems like Brazil and Mexico with their high inflations. If you keep increasing deficits, confidence in our country goes downhill. What happens? Interest rates go up because you try to maintain and bring in dollars that you need or you print more money. That is the answer. If you print more money then the rest of the world says the Canadian dollar is not worth 78 cents but only 50 cents. What happened to Mexico and Brazil when they started printing money when they did not have the ability to provide the cost of their services? Inflation skyrocketed. Canada does not want to be that kind of a country. Canadians will re-elect this Government because they know we are the only ones capable of financially running the country properly.


The Acting Speaker (Mrs. Champagne):: The question and comment period has now expired. The Hon. Member for Eglington-Lawrence (Mr. de Corneille).


Mr. Roland de Corneille (Eglinton-Lawrence):: Madam Speaker, today we are being asked to debate the resolution that this House approves in general the budgetary policy of the Government. That is something I cannot do. I certainly cannot approve of this Government's Budget. We cannot approve of the Budget because we have grave problems in Canada, many are fundamental and systemic and the Government is doing nothing in the Budget to deal with them. Let me sum them up.
First, poverty in Canada is worse than it was before the recession in 1981. Heavy new taxes have been laid upon Canadians. We have regressive and hidden taxes in the form of ongoing sales taxes and hidden taxes which the Government has imposed on people since the Conservatives came to power in 1984. We have increased public debt through huge annual deficits. Though the Conservatives claim they are so concerned about the deficit, our public debt has skyrocketed. There is a drop in real earnings for average Canadians. After taking into account inflation, one finds that the real earnings of Canadians have gone down since the Government came to power and the Government brought in a budget that has not dealt with any of these issues. It has not mentioned them in the debate.
This is not a commentary of mine as a person or as an individual, or even as critic of the Official Opposition, the Liberal Party, which I represent in speaking today. It is rather an opinion expressed by those who are involved in the financial world. It was expressed over television and radio the night of the Budget, that it was a do nothing budget. Not only did the media make this comment, but leaders of the business world commenting on the Budget made the assessment that it is a do
The Budget-Mr. de Corneille
nothing Budget. It fits in well with the philosophy of the Tories.
The Tory approach to the economy, in fact to government, is a laissez-faire approach. It is an approach that says "do not rock the boat; we have set into motion a situation that is advantageous to certain special interest groups. Do not intervene. Do not do anything that will cause any effect on the economy. Let market forces bring about their own results. Let the market forces operate. Then as a result of the values that will come to certain segments of our population there will be a trickle down of benefits to those who are less well off and eventually those down the line will get the benefit of our approach". That is Tory philosophy, Madam Speaker, and this Budget is a perfect reflection of it. It is a non-managerial approach. It is an approach that serves special interest groups.
I would like to expand on the points I have made. There is a lack of action concerning the anticipated fall-outs that will come from the so-called Mulroney-Reagan agreement on free trade. First, we have poverty. I mentioned that nothing is being done about poverty. To be poor in Canada is to have unequal access to housing, education and training, day care, legal services, credit and health care. Most poor Canadians include all welfare recipients, almost all minimum wage workers, the majority of unattached elderly persons and single parent families led by women. These constitute a group of people who are living below the poverty line. They are in poverty. They live on incomes that are hundreds and sometimes even thousands of dollars below the established poverty line. This Government, in this Budget, has not addressed itself to that fundamental systemic problem. Poverty is worse now than it was seven years ago.
These figures were taken from materials given to us and studies made by the National Council of Welfare in Ottawa and by the Canadian Council of Social Development. These statistics are alarming. Yet we do not hear any outcry or concern on the part of Tory back-benchers or Ministers of the Crown. These figures are there for anyone to see, yet they are unwilling to bring them forward, study them and report on what should be done.
These figures state that in 1986, some 3.7 million Canadians lived below the poverty line. That is 14.9 per cent of the population, almost 15 per cent of all Canadians. More than 34 per cent of unattached individuals were poor last year. Over one million children under age 16 lived in poverty. Nearly 57 per cent of poor Canadians were female while 51 per cent of the general population is female. More than half of singleparent families headed by women are poor. The risk of poverty is one in seven for all persons, one in eight for families, one in three for unattached individuals and one in two for singleparent families headed by women.
Finally, the number of Canadians living below the poverty line went from 3,475,000 in 1980 up to 4,214,000 in 1984 but

February 25, 1988
The Budget-Mr. de Corneille
has since declined. The 1986 figures, however, are higher than those of 1980. We have not made progress on this tremendously serious issue of systemic poverty. This Budget does not address that problem.
The second point I made was that there has been an increase in sales tax and income tax, putting a heavier burden on the people who can least afford it. The middle-income group is particularly hard hit. In 1987, for example, individuals paid $22 billion more in income tax than in 1984 when the Tories came to power. The major portion of this came from new taxes introduced since September of 1984. In addition, we have seen an increased automatic tax that has been built into the system, a kind of hidden tax that automatically comes into effect year after year. We find increased indirect taxes as well. The income of people has been secretly undermined.
There have been constant increases in taxes. The list of sales tax increases is incredibly tragic. Year after year sales taxes have been built in to constantly increase the amount of money that must be paid. First there was a 9 per cent sales tax, then the next year a 10 per cent sales tax, then the next year an 11 per cent sales tax and the next year a 12 per cent sales tax. There are new taxes on items that had never been taxed before. Of course, there are more taxes on gasoline. Every time we turn around another cent or two per litre in taxes is applied to gasoline. Again, in this measure, we have seen another increase in sales tax to bring in another $300 million to the Treasury and take $300 million away, not from rich people, not from those who can afford it, but from the poor who have to drive to work or the middle-class who have to carry the social burdens of the country.
I mentioned the increase in public debt. We hear a lot of smoke and mirrors about how the deficit is being brought down. One would think from that that the national debt was receding. That, unfortunately, is not at all the case. On closer examination we find that since this Government came into power the national debt has increased $116 billion. When we look at what the national debt was after having been built up for over a hundred years, it was $176 billion when the Minister of Finance (Mr. Wilson) and the Tories took over in 1984. In the short three or so years of this Government, $116 billion more has been added to the national debt. That means that there was a 66 per cent increase in our total debt in the short period of this Government's existence. This is under what is supposed to be a strategy which is called bringing down the deficit.
The deficit may be slightly lower this year than it was last year, but that certainly does not portend that the national debt has gone down, as most people think. On the contrary, it has risen higher and faster than at any time in the history of this country. That is the reality and this Budget has not addressed that problem either.
These are some of the matters that are of concern to us. The worst failure of all in this Budget is its total neglect for the fallout which will come from the so-called free trade deal. We
know that there will be tremendous negative repercussions from this trade deal. We know that it will hit the more economically depressed regions of Canada the hardest. We know that the most vulnerable people in the workforce are the ones who will be hit, the women and older workers. They will not be the ones who will be the most helped by this trade agreement, they will be the first to be hit the hardest. We also see that this agreement will destroy major sectors of our economy.
I think that those of us who have open minds will remember seeing an illustration of this in a recent episode of the television program, The Journal. The Journal interviewed a worker from the oil fields of Alberta. He resided either in Calgary or nearby. He was able to say that he was looking forward to the impact of the trade deal. He said that he thought that in future the Americans would be buying our gas and oil, and of course they will because it will provide an inexpensive resource for them. We have opened up the gates of our resources to America. The Americans will buy them, all right, at prices not more favourable to Canadians but of equal favour to them, and they will have access to our oil and gas and our water and other resources, something which is of course what they want. It will serve their purposes. This oil worker was able to say that he can look forward to knowing that there will be lots of work for him over many years to come. The Americans will be buying up our oil and gas at good prices, so he is quite sure that all will be well.
At the same time, while his industry was favoured by this agreement, the program interviewed a woman whose face those of us who saw it will never forget. We will never forget the look of anxiety, concern and gentleness. This woman is working at the Ganong chocolate factory in St. Stephen, New Brunswick. As we watched her working, hand-dipping chocolates, we saw that she was a person of middle-age, perhaps later middle-age. She wanted to work. She had worked all her life and she was skilled in this particular kind of work. She looked forward with some anxiety to what would happen when this trade agreement came into effect, what would happen to this little chocolate company in New Brunswick. In fact, she wondered what would happen to her job. When her boss and the owner of the company that is a hundred years old was interviewed, he had to admit that he did not know what would happen, he is anxious and does not know the repercussions.
Indeed, when the Americans can flood Canadian markets with goods produced by the cheap labour they have in the south, often temporary immigrant labour, one can see how they can compete with Canada. When one understands the problems Canadians have with the transport of goods over greater distances, therefore adding to the cost, and when we look at the cost of energy required in our climate, we can understand the misgivings over whether Canada can compete without some kind of protection of its traditional markets.
February 25, 1988

Is anything going to be done by the Government to see to it that the fall-out from this kind of policy will be looked after? There is no indication from this Budget that any attention has been paid to the problem.
One remembers the poignancy of the image of this woman who is looking toward the future with uncertainty. You can repeat that image and that concern in the faces of people in factories all across this country. Think about the one or two-industry towns. Think about the little companies built over 50 or 100 years; for example, the textile companies in Quebec and Ontario. Think about the people working in the shoe industry or the chocolate industry. Think about all those people in many little plants across the country. They face disaster when our borders are thrown open and the competition arrives from huge American corporations. Those towns will then become ghost towns and the Canada we knew will no longer exist.
Remember the anguish of people like this woman who face prospects like this. Where will she, living in a town in New Brunswick, find a new job? Are we going to stack these people like cordwood, put them on trains and send them to the big cities? Are we going to try to force them to leave their towns and villages of which they have been a part all these years? The Tory idea is that you go to where the jobs are instead of keeping the jobs in various parts of the country. It is a laissez-faire, let it go approach.
The Government has done nothing whatsoever in this Budget to give any reassurance to those people across this country about the future of their work and their jobs, and not just the people in manufacturing. One of the areas that will be the most severely hit is agriculture. Today farmers are complaining about family farms being closed down and going into bankruptcy. Think about grain farmers who are in vulnerable positions today. Then think about their vulnerability when this so-called trade agreement comes into effect.
Let us think, for example, of companies which are producing and processing food. What will happen when these 18-wheel trucks come wheeling into Canada with goods from the southern U.S. where there is scab labour and cheap immigrant labour brought in from Mexico? They have climates such as in Georgia where they can raise chickens without any cost for heating. They have the industries to package and process the food. What will happen to our packing and processing industries in Canada? What will happen to the farmers who supply the food for those packaging and processing industries? We know they will go down. They will be crushed. They will disappear. Again, hundreds of thousands of people in this country, including farmers, will be reduced to penury, driven off the land, and those farms, industries and small towns across Canada now servicing the food industry will be destroyed.
In conclusion, I want to point out that the Macdonald Royal Commission, while recommending free trade, insisted that a program had to be in place to anticipate the fall-out, the suffering, the displacement and social costs which will arise. It
The Budget-Mr. de Corneille
had to be part of the package if there was going to be a free trade agreement. It called for a guaranteed annual income. It said you cannot move on these matters until you have first looked after the social needs of the people affected negatively by free trade.
The commission pointed to the fact that the poorest 20 per cent of Canadians receive less than 5 per cent of Canada's total income. We cannot go on in this fashion. There is no planning in this Budget for the tremendous repercussions arising from this trade deal. Tories are not managers. They are interested in special interest groups and allowing rip-off, cream-off, and selling off of our resources, selling off of our future, selling off the back-forty. The Tories do not manage this country, they just let it go.


Mr. Holtmann:: Madam Speaker, I listened with interest to the Hon. Member and the fault he found with the Budget this morning. 1 am absolutely amazed that he did not use this opportunity to tell Canadians what his Party intends to do in the future to make a better Canada.
The Hon. Member criticized the one cent a litre tax on those poor people who have to drive to work. I would like to remind the Hon. Member that there are a lot fewer poor people and a lot more people working since this Government came to power. When his Party was in power we had almost 12 per cent unemployment. Unemployment is down to 8.2 per cent and still dropping. Clearly he cannot argue the fact that this Government has created jobs.
I want to go on to what I think is a very important point of his remarks. He said that since this Government came to power the deficit has increased by $116 billion. He thinks this is terrible.


Mr. McKenzie:: It was started by his Leader.


Felix Holtmann: Does he not remember that at the rate it was growing in 1984 it would not be $116 billion today, it would be $400 billion?
He criticized the Government for not doing more for the poor people and spending more to help them. He suggested that more ought to have been done in many areas. We should have spent more money as his Party did in the past. How does he intend to bring that $116 billion deficit down to zero and spend more to help all those people that he criticized this Government for not looking after? He referred to people without housing, people still unemployed and on welfare. What does he intend to do? Clearly the last Government could not create jobs, it could only create a big deficit. He is going to do the opposite, so I would like him to tell Canadians how he intends to help these people, where he is going to get the additional revenue not only to keep the deficit from going up but to reduce it, and create all these programs? I think he should tell that to the Canadian people right now.


Roland de Corneille: Madam Speaker, I appreciate the questions the Hon. Member has raised because they afford me

February 25, 1988
The Budget-Mr. de Corneille
an opportunity to add to my observations. He raised a host of questions in a very short period of time and I hope he will allow me to do my best to try and deal with some of them. I cannot really deal with all of them.
First, he raised the question about the fact there is so much more employment, not less. I pointed out that there is more poverty, not less than there was in 1981. There is no reason for us to rejoice in that.
With regard to the jobs about which the Member speaks, it is one thing for the Government to talk about the fact that it has increased the number of jobs so greatly since it came into power. The fact it does not want to mention is that it came into power at a time when we were coming out of a recession. The Government came into power at a time when there was economic growth throughout the world.
Despite this opportunity, the Government has still not brought us back to the level of unemployment which existed in 1981. In August, 1981, the Canadian level of unemployment was 6.8 per cent. We have not returned to that figure yet, even though we have had a period of growth in the economy throughout the world. The Government chooses to use figures from a period of world recession and compare its record with that. We have never heard the Government compare its figures with those before the recession.
The Hon. Member asked why we talk about the $116 billion increase in the national debt. We speak about that because it constitutes an incredible new burden on the average Canadian in that the total debt divided by the total population-what we call the per capita public debt-has increased from $7,000 for each Canadian when the Government came into power to $11,250 per person within a few years.
There has, therefore, been an incredible increase in the national debt under the Government. In three and one-half years it has gone up 66 per cent over what it was in the previous 100 years put together. The accumulation of our national debt over 100 years was $116 billion and it is now $176 billion.
It is true that at the rate at which the Liberal Government was spending money when it took over all kinds of problems could have been projected, including a larger debt. However, the reason the Liberal Government was spending money at that particular time was to provide social services to those who would otherwise be in hunger and poverty during that depression or recession. I think most Canadians were pleased that the Government acted responsibly and tried to help those who were weak and poor by underpinning their concerns. In the long run, Canada made a good investment in its future through that kind of support program.
I do not know whether I have dealt with all the points with which the Member wanted me to deal, but as a quick final point, the Member asked what Liberals or I would do. Well,
there are some things which this Budget could have done, one being to deal with the present rate of interest. If a lower interest rate is afforded by the present opportunities which we have with regard to our relationship with the Americans and their interest rate, this may possibly fuel an increased number of jobs, a better economy, and a lower deficit.


Mr. Edwards:: Madam Speaker, in the Hon. Member's speech we have heard the voice, allegedly, of the little Canadians. I think we all want to speak for the average Canadian because they comprise the vast majority of our population. However, instead we have heard a cleverly disguised endorsa-tion from the socialist wing of the Liberal Party of the little Canada concept, the timorous Canada concept.
I listened with rapt attention to the Hon. Member's skilled sketching of the worried woman from New Brunswick. I wonder whether he has thought about the future of her children and her grandchildren if Canada lacks access to markets, if the Ganong chocolate company, for example, is forestalled from gaining access to the richest market in the world and Canada remains the only major industrialized power without unfettered trade access to a market of at least 100 million.
I wonder whether the Hon. Member truly understands the attitudes of Canadian farmers, particularly western farmers, who see the free trade agreement as an opportunity and not a threat. The farmers of western Canada in particular see this trade agreement as a liberation manifesto.
The images which the Hon. Member has put to us are rather distorted, rather dramatic-people stacked like cord wood, 18-wheel trucks invading us across the border. I submit that this is not so much a Budget speech as an anti-American diatribe.
Can the Hon. Member tell the House how many Canadians he believes will be affected by means of job adjustment through the free trade agreement and how many Canadians he believes normally change jobs in the course of a year? I believe that it is estimated that 25,000 Canadians per year will be affected by the free trade agreement and will require retraining, to which the Government is committed, compared to 5 million Canadians who annually change their jobs in the normal course of events. Could the Member comment on that please.


Roland de Corneille: Madam Speaker, I appreciate that question. Obviously Tories simply cannot think in terms of the average Canadian. They cannot wrap their minds around that, as the comments of the Member show. He is still talking about whether there will be winners and losers and how many. He failed to hear what I said when I said that Canadians want their Budget to deal with those who will be the losers. He cannot hear that. He keeps saying that there will be winners and that the grandchildren of the woman from New Brunswick will prosper. That does not help her. That does not give her dignity.
February 25, 1988

The Member cannot get his mind around that subject. He and the Government do not care about the losers. This Budget is disgusting because it does not anticipate the problems which will be faced by those who will lose. No one denies that. Even the Macdonald Royal Commission said that there will be losers and for that reason we must build in protection through guaranteed income supplements, unemployment insurance, and other mechanisms, a new social system which will protect the losers. No one denies that there will be losers.
[Translation}


The Acting Speaker (Mrs. Champagne):: The period provided for questions and comments has now expired. Resuming debate. The Hon. Member for Richelieu (Mr. Plamondon).


Mr. Louis Plamondon (Richelieu):: Madam Speaker, I would also like to take part in this debate on the Budget, because I think it is the first time Canadians have been given a real Budget Speech. This is not a speech to amend the Income Tax Act. It is not a speech to announce taxes. It is not a speech that keeps changing the Government's tax system. It is a speech that clearly describes, as a Budget Speech should, the state of the nation, in other words, the state of Canada's economy as a result of the policies we introduced three years ago. It is a speech that clearly describes the progress this Government has made since 1984, and its conclusions are such that we can look forward to the future with great optimism.
I was very surprised when the previous speaker quoted the Macdonald Report, since the report in question was in favour of free trade. Of course, they can always quote that part of the Report that suits their own particular ends, but the general tenor of the Macdonald Report was that the Government had no choice but to opt for a free trade agreement with the United States.
However, 1 found it most refreshing to hear my Conservative colleague's question to the previous speaker, when he said: You keep criticizing, but what kind of economic policy do you have to offer? What is the Official Opposition's economic policy? What is the New Democrtic Party's economic policy? They have nothing on paper, saying what their budget would be like and how they would proceed if they were to form the Government. Not a word. We keep hearing negative criticism, never anything constructive. However, they tend to forget the approach taken by the previous Government. At the time, its budgets were more like amendments to the income tax than a proper budget speech. All we heard was more taxes. The deficit rose from $13 billion to $38 billion in three years. And they even neglected to bring down budgets for as long as sixteen months.
At one point, we had a forecast deficit of $10 billion, which turned out to be $20 billion. Today, however, the forecast is for a deficit of $30 billion, Canadians can count on the deficit being $30 billion. The Minister of Finance (Mr. Wilson), in
The Budget-Mr. Plamondon
co-operation with Treasury Board, has provided for an ongoing review of the issues and the Government's economic policies, a truly admirable initiative that does not deserve the negative and destructive criticism we have been hearing today.
This morning, previous speakers often mentioned free trade.
I shall, if I may, quote from an editorial in today's La Presse, which is about free trade and the partisan analysis we are being given instead of the rational approach we need to an economic analysis as important as this one, especially when the future of all Canadians is at stake. Our friend Frederic Wagniere said, and I quote:
Nobody ever said the Free Trade Agreement with the United States was perfect. The version initialled last October was very vague, and the text signed by the Prime Minister still requires some clarification-
However, that is no reason for throwing out the baby with the bath water, like some politicians on both sides of the border-
The politicians on this side of the border being, of course, the Opposition and the NDP.
-are inclined to do. With all its flaws, the Agreement enjoys considerable support.
And a little further in his article which 1 found very perceptive, he added:
The greatest threat to the Free Trade Agreement comes not from the United States but from partisan politics in Canada which may soon turn into electioneering. The federal Government intends to table enabling legislation this spring. Considering the obstruction we can expect from the Opposition Parties, consideration and passage of this legislation by the House of Commons and the Senate may take very long indeed;
Here we have an editorial writer who clearly says that the partisan attitude and blinker mentality of the Opposition Parties is extremely harmful to Canada's economic development and that free trade is the only viable short or long term solution for the Government and for creating jobs. In fact, this Government can be proud of its record, since as one of my colleagues said this morning, it has created the most jobs of any government in recent years.
As I said earlier, this Budget Speech differs from the kind we are accustomed to hear, because it tells us exactly what the situation is. It tells Canadians what they will have to do and what they can expect from the Government, and it tells us exactly what course the Government will take to provide for the economic well-being of Canadians. Furthermore, the Budget is a clear demonstration of this Government's successful economic record.
For instance, concerning international policies that are regularly discussed by the Right Hon. Secretary of State for External Affairs (Mr. Clark), through CIDA, and the involvement of Canadian business people in those matters, this has ensured that CIDA's upgading is now being perceived throughout French-and English-speaking nations in Africa especially. Economic indicators are a clear proof of that- whether it be interest rates, unemployment, housing starts, or investments which have doubled since this Conservative Government came to power, whether the volume of exports, of course, the renewed confidence of potential investors from

February 25, 1988
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Canada or abroad, deficit control as established by this Governement, whether the tax reform that had been discussed for 20 years, and that may be further discussed but will lead to real reforms over the coming months and years, whether this Budget which is an assurance guide to free-trade success... In my area for instance, in the constituency of Richelieu, in Sorel, thirteen of the major employers with a total of at least 9,000 to
10,000	employees unanimously supported free trade by announcing that those agreements over the coming years will mean for those entrepreneurs the hiring of from 1,000 to 1,500 and perhaps even 2,000 new employees.
I was surprised earlier to hear the previous speaker suggest unemployment had gone down but poverty had increased. At any rate, if things keep going the way they are, the decrease in unemployment certainly will help stamp out poverty some day or other.
In the Becancour area, whose industrial park has seen very significant investments, the unanimous reference also is to the free trade agreement as a boost to employment, because more than 1,000 new jobs could result from that historic agreement.
That in my view is clear, specific and concrete evidence of this Government's commitment to implement the free trade agreement in the shortest possible time frame, hopefully with the cooperation of Opposition parties rather than obstruction from the Senate Opposition, often with the complicity of Opposition parties, through all sorts of technical means in order to block that agreement, which would do tremendous harm to the interests of Canadians generally.
In the fine region which I have the privilege to serve, we find the nucleus of the constituency of Richelieu which covers the Sorel area, Tracy, Saint-Joseph, Sainte-Anne and Saint-Pierre as well as the Pierreville, Yamaska, Nicolet and Baie-du Febvre area. Then there is the very dynamic area of Becancour extending 150 kilometres long and 30 kilometres wide along the Richelieu. It has greatly benefitted from the spinoffs of the policies developed by this government and announced in the Budget speech. My constituents applaud the moderation shown by the Government in the delivery of its annual message and in reminding us of its successful results which had very substantial and visible effects in the constituency of Richelieu.
For example, with respect to grants received, whether given to communities, social programs or to non-profit organizations, never has a Government so well favoured some organizations while being so generous to all of them through job-creation programs or direct grants from the Secretary of State. As for the Sorel area, some $5 million have been granted for the restoration of the Sorel harbour and a supplementary request is now before the Treasury Board to allow 76 workers to remain in Sorel rather than having to move in the Quebec or Montreal areas. The matter had been dragging on for seven years.
I could also mention the many investments made for senior citizens or underprivileged individuals, especially the Cooperative Saint-Jean-Baptiste which has been granted a special amount to solve its problems with tumble-down dwellings while a sum of $10 million is to be invested to provide acccom-modation for senior citizens. I will also announce in the near
future, 15 days at the latest, in the area of Sainte-Monique and in co-operation with the Quebec Government the investment of over a quarter million dollars which will be earmarked for the same purpose.
Let me also mention financing made available through the Laprade Fund, that two million dollars special fund drawn from the main programm that was announced just three months ago. The nine member committee of that riding, responsible for the administration of that fund, has already found ways to support, through grants, loans, investments or participation in the capital stock, at least 16 organizations or companies which had filed applications, and we will be meeting next week or the week after to consider yet another fifteen applications. That is one action among others taken by this Governement in the interests of the riding of Richelieu.
I could mention also those new industries that have been set up in Becancour, as Norks Hydro, or in the area of Tracy, where the metal beams company or the iron and titanium plant underwent expansion of their operations which have created hundreds and hundreds of jobs. Of all Canadian ridings, the riding of Richelieu may be the one where there has been more permanent jobs created during the past three years. Yet that riding had been almost forgotten by the previous Government.
Atlas Steel, les Aciers Atlas, a very important company in my region, was granted a contract of $10 million by the Royal Canadian Mint this year. It is its first investment accounting already for close to 10 per cent increase of its turnover, an investment that provides some 500 or 600 hundred people with permanent work and, possibly some more jobs in the future.
After hearing the previous speaker talk about the textile industry and about the risks of free trade for Quebec, let me point to the case of Soreltex, a textile company which recently expanded into the United States, which hired about 100 people in the last year and a half and which is about to hire some 60 new employees for a total of over 400 jobs. That is another accomplishment partly due to a $500,000 grant from the Department of Regional Industrial Expansion.
There is also the first soy micronization plant which set up shop in the fine area of Saint-Robert, in Quebec. Again, the federal government gave a major grant according to the policies announced in last year's Budget. This Budget confirms the government's will to go ahead with those projects in order to create not temporary jobs, as was the case under the previous government, but permanent jobs.
Let's talk about the huge expansion of the fire engine company in Pierreville, which employs almost 300 people as opposed to less than 100 when this government came to power.
Let's talk about the expansion of small business in the Baie du Febvre area, in the Yamaska area, in Saint-Jean-Baptiste-de-Nicolet, in Saint-Gregoire, in Sainte-Gertrude, in Gentilly, in Sainte-Victoire and in Nicolet-Sud. All those regions in my constituency greatly benefit from this government's objectives as announced each year by the Minister of Finance since 1984.
February 25, 1988

Let's talk about the construction of an industrial motel in the Nicolet area. It will also be announced shortly that work will start on the first plant of an industrial park in Tracy. That is something that the people of that region have been asking for at least 10 years. Within a few months, the first major industry to locate in the industrial park will be announced, to be followed by three smaller industries, which will finally mean a small business industry in the region. For the first time, we have seen a manufacturing industry locate in the Sorel-Tracy region, and this is not a processing plant of the plate-shop type, but a plant which produces finished products, namely the Maxtemp plant. Today, after less than a year, it provides nearly 30 jobs and its turnover will exceed $10 million this year, and both of these figures could triple within a few years.
There have also been total investments of over $500 million in the Becancour Park since the Conservative Party came into office with very well-paid permanent jobs, and we should not forget the new employment assistance programs which the Hon. Minister of Employment and Immigration (Mr. Bouchard) has implemented and which emphasize training, in addition to the employment subsidy. In my riding, 68 per cent of jobs created under these programs have become permanent. These programs have given us permanent jobs instead of creating jobs which simply lead back to unemployment insurance.
Once more, the Government has been very dynamic and its economic policies have had practical results in my region.
I could go on about my own riding. More jobs will be created. Six industries are about to receive a positive answer from the federal Government to locate in the Sorel-Tracy region. There are also other investments, for instance in the Religion Museum in the Nicolet region, for which the federal Government has just allocated $1.2 million, which will create about 30 permanent jobs, and this does not include the indirect fall-out resulting from all the people who visit a nationally renowned museum such as the Nicolet Religion Museum will become.
Moreover, next week, we shall hear some very good news about tourism in the Nicolet region, and the Becancour area is about to submit very important projects under the Laprade Fund, which projects will naturally receive careful consideration both from myself and from the Government of which I am proud to be a member.
In addition, there will be a major expansion project and the development of a new technology for cheese production, which should represent millions of dollars in investments.
Let us not forget either the Saint-Pierre-de-Sorel and Sainte-Anne region, where there will also be very important projects. These are the results of the policies of a Government which recognizes that the only way to develop a constituency, a province or a country is to create permanent jobs and to provide assistance and co-operation to the private sector,
The Budget-Mr. Plamondon
without neglecting economic organizations either in the tourist industry or through key businesses and community development programs, which are certainly proving useful in my riding. My whole riding now qualifies for community development programs or key companies, which makes it easy for young entrepreneurs to start in business, without having to go through the whole bureaucratic ladder to get a small subsidy.
I realize, Madam Speaker, that I have only one minute left to praise this Budget speech and particularly its fallout for my riding and for the beautiful area in central Quebec I have the honour to represent. In conclusion, I would like to express the wish that my constituents do take advantage of this economic policy set up by the Government to assist the industry and I would like to assure them in particular that I will do everything in my power to assist them with all the cases they would like to refer to me. For the past three years, I have served them with concern, passion and dedication, and I will continue to do so, because I am very proud to represent my riding of Richelieu, which I consider as one of the most beautiful ridings in the province of Quebec.


The Acting Speaker (Mrs. Champagne):: Questions and comments. The Hon. Member for Trois-Rivieres (Mr. Vincent).


Mr. Vincent:: If I may, Madam Speaker, I should like to commend the Hon. Member for Richelieu (Mr. Plamondon) for his excellent speech, and more particularly for the outstanding work he has been doing in his riding over the past three years. In my opinion, he has highlighted the work carried out in his riding, and the significance of the Conservative Government as well as of this and others Budgets. First I would ask him whether he can see a direct link between last week's Budget tabled by the Minister of Finance (Mr. Wilson) and earlier Budgets in terms of the evolution of businesses in his riding. He also mentioned the Laprade fund. How did people in his riding react to the announcement concerning the Laprade fund, especially in light of the fact that certain cases have already been settled? I happen to know that some companies in his riding got sizeable financial contributions from the Laprade fund. I should like to know how he feels about that and what his constituents have to say in this respect.


Louis Plamondon: Madam Speaker, I would like to thank my hon. colleague from Trois-Rivieres (Mr. Vincent) for his kind words, and I want to return the compliment. The dedication and energy displayed, not just in his riding but throughout Central Quebec, show that things have really changed since 1984, compared to what we had come to expect from the silent majority that preceded us here in the House of Commons.
To get back to his question, it was about the Laprade Fund. We announced that the Laprade Fund would be reactivitated

February 25, 1988
The Budget-Mr. Langdon
with a new set of criteria. Before, it was more or less a Member's discretionary fund which he could use to subsidize in his riding what had to be non-profit organizations. He could subsidize these directly, and often did so without first requesting a feasibility study. Now, however, the new criteria that were announced by the Minister, the Hon. Member for Berthier-Maskinonge-Lanaudiere (Mr. de Cotret) in Louiseville, have been a great incentive for businessmen in the riding to submit projects. These are major projects, by the way. For the Laprade Fund, projects must be worth $500,000 or more. The projects must create permanent jobs, and since the announcement a year ago that the Laprade Fund would be reactivated with very specific acceptance criteria, I have had at least ten proposals that are either being analyzed or are about to be announced. At least three or four of these have already been announced, and they would not have materialized without the Laprade Fund. And consider that originally, the Laprade Fund could only be used for non-profit organizations-not for the private sector and not for municipalities!
If we want permanent jobs, doesn't it make sense to look to the private sector and our municipalities, to major projects like establishing museums or other initiatives? That is what the Laprade Fund did for the Hon. Member for Trois-Rivieres, and there was a positive impact, not just on the Hon. Member's riding and my own, but on all ridings in the region, and it was greatly appreciated by the private sector. Earlier, the Hon. Member wondered whether previous budgets had had an impact, and whether this one was pointing us in the same direction. Yes indeed. When the first budgets were brought down . .. The Government's initial economic proposals were announced a few months after the 1984 election, and the impact was already being felt in the riding of Richelieu at the time. This was reflected in the creation of new jobs, a drop in the unemployment rate, new investment, exports and new construction.


The Acting Speaker (Mrs. Champagne):: Resuming debate. The Hon. Member for Essex-Windsor (Mr. Langdon).


Mr. Steven W. Langdon (Essex-Windsor):: Madam Speaker, I want to make it clear from the start of this speech that the Government has had its successes. I am interested to see that the Minister of Employment and Immigration (Mr. Bouchard) is present. The Government has had its successes in cleaning up a situation in which jobs were provided through the Department of Employment on a short term ad hoc basis which did very little good for the people in terms of placing them in positions where they could have longer term jobs for the future.
There have been successes in some areas of foreign policy. For instance, the Government's policy on Central America, although it might not be quite as outspoken as I would wish it
to be, has been very much on the right side in a difficult situation.
There are many who would say that the Meech Lake Accord is very much an area of success.
I also have to say, especially with respect to economic policy, that the Government has had its failures. As I see it, its failures have come especially in industrial policy. There have been three Ministers in the space of 3.5 years, one who has been judged to have been involved in 14 conflicts of interest by Judge Parker, another who has been dismissed from the Cabinet, and a third who is now in front of us. Those three Ministers are perhaps part of the reason that we have not had an industrial policy from the Government as part of its broad economic policy which has been effective.


James (Jim) Stewart Edwards: Madam Speaker, I rise on a point of order. I think that it would be appropriate if the Hon. Member is making an accusation that he be specific.


The Acting Speaker (Mrs. Champagne):: The Chair was listening very carefully to the Hon. Member for Essex- Windsor (Mr. Langdon) and wondering at what point he could make some relation to the subject which is being studied today while making accusations or allegations. I am sure that the Hon. Member will want to be very careful when he is discussing the subject at hand. The Hon. Member for Essex- Windsor.


Steven W. Langdon: I am not here to discuss the activities of the past Minister of industry, the Member for York-Peel (Mr. Stevens)-


The Acting Speaker (Mrs. Champagne):: The Chair thinks that, if the Hon. Member is not here to discuss the activities of other Members, then he should not do so.


Steven W. Langdon: I appreciate that, Madam Speaker, but one of the points I am making, which is very important with respect to what I see as a profound failure of this Government in its industrial policy in terms of consistency and direction, is that it has had three Ministers in the space of three and a half years. We all know in the House that that is the result of certain events which took place affecting one of those Ministers of Regional Industrial Expansion. As I say, that is not the subject of my speech. The subject of my speech is the failure of industrial policy of the Government.


James (Jim) Stewart Edwards: Madam Speaker, I think that the Hon. Member is seeking to do, as Anthony did, through omittendo what his Party has failed to do through innuendo.


Steven W. Langdon: I must say, with due respect to the Member, that this is absolute nonsense. I am simply reporting what has taken place, and what everyone in the House knows has taken place, which has created the situation where we have had three Ministers of Regional Industrial Expansion. My point is that the takeovers which have taken place within the Ministry have
February 25, 1988

been major contributors to its failure to give us a consistent industrial policy.
That failure is demonstrated, for example, in the fact that the previous Minister, testifying before the international trade committee last year, told us that within two months to three months we would have before us a new automotive strategy. We have still to see such a strategy, approximately 10 months after that statement. We have seen absolutely no statements of broad strategy in respect of the critical need in the country to produce much more of the machinery that we use. We have seen no policy to get the most out of foreign investment. As a matter of fact, we have seen important and dangerous retreats in respect of that goal. We have seen no policy whatsoever with regard to the lay-offs that have hit many workers across the country. Many of them are older workers who have been hit by shut-downs, as a consequence, and have not been able to find alternate jobs.
Despite the statements of the previous Minister of Labour, no policies in respect of industrial adjustment have been put forward by the Government. The consequences are to be found in the Black & Decker plant in Barrie, which shut down in 1984, the Trenton Car Works in Nova Scotia, which was shut down for much of the Government's period in office, as well as apparell manufacturing plants in downtown Toronto which have been shut down, to the Gulf refinery in Montreal, which was shut down, and the pressures which exist on smaller steel companies in the West. We have seen no policy which has given any direction whatsoever. We have seen no sense of a broad strategy or of a game plan with regard to the manufacturing sector.
Referring to the Province of Ontario alone, in the past year there have been, in terms of either announced shut-downs or significant lay-offs, over 100 such occurrences affecting over
14,000	workers, according to data which come from the Ministry of Industry in Ontario.
In this set of failures there have been some real horror stories. There has been the case of Lapp Insulators where we in Hamilton appealed to the Minister to permit a workers' cooperative to buy out the company. He refused, and the consequence a few short months later was that an American took it over and shut it down. We have seen horror stories like that one which affected Goodyear workers in Toronto, 1,400 of whom hit the bricks because of a lack of strategy in the automotive sector, and 1,300 people who have now lost their jobs at Firestone in Hamilton for much the same reason.
We have seen the case of White Farm Machinery in Brantford, where a Canadian entrepreneur had taken the plant to a point where it was moving well but needed some assistance from the Government. The Government said "no", and the company was put under as a direct result of the Government's lack of direction and lack of action in the industrial area.
This has been especially evident in the area from which I come. The constituency of Essex-Windsor has seen an accelerating number of such shut-downs, demonstrating this lack of effectiveness and this lack of direction in industrial policy. We have seen the International Tool Limited case that has cost 185 workers their jobs, without a single word of explanation to the community about why that plant which had been profitable up to that stage should have simply shut down at the very start of a strike and at a point at which it had received all sorts of grants and assistance from the Government.
We could talk about the case of Cross Lasalle in the Windsor area, a small plant which was taken over by an American plant and shut down very shortly afterwards. We could talk about the case of Shelter Globe, again a profitable plant taken over by an American company which was shut down and cost 205 workers their jobs. We could talk about Dominion Forge, another plant which at this stage is in the process of shutting down. We could talk about lay-offs which are hitting, for instance, Kelsey Hayes, costing 200 workers their jobs at this point; the General Motors transmission plant in Windsor, costing over 300 workers their positions; and the lay-offs at Central Stamping that I visited this past week which is costing 30 workers their jobs.
Part of the reason for this is in the failure of the Government to define and set out an automotive strategy. I think part of it also comes from the preparation of various companies for the trade deal coming into effect. However, I think a big part of what is taking place is a consequence of the complete absence of policy on the part of the Government. It is almost as if the Government set out to devastate the heart of manufacturing in Canada.


The Acting Speaker (Mrs. Champagne):: After recess, the Hon. Member will have five minutes left to finish his speech.
It being one o'clock, I do now leave the Chair until two o'clock this afternoon.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Mr. Raymond Garneau (Laval-des-Rapides):: Mr. Speaker, the present situation of ethnic minorities in the Soviet Union is worrisome. The Armenian, Lithuanian, Ukrainian, Jewish,

February 25, 1988
German, Moslem and other cultural communities continue to feel as though they are on the fringe of the Russian majority, which accounts for only 51 per cent of the Soviet people.
Yesterday's New York Times reported demonstrations and strikes in the independent region of Nagorno-Karabakh: most resident of that region-80 per cent-are of Armenian descent and are making official representations to Moscow with a view to being linked with Armenia.
Mr. Speaker, international press correspondents also report that Armenian representatives are to meet with Secretary General Gorbatchev to explain their situation and grievances, and hope they will be given a hearing.
At the same time, yesterday more than 100,000 people gathered in Erevan, the capital of the Soviet Republic of Armenia, seeking restitution to Armenia of that independent region which was annexed to Azerbaidjan during the 1920s under the Stalin administration.
Mr. Speaker, I should like to echo the claims of Armenian people in the Soviet Union. I praise them for their courage and tenacity, and I express the wish that a fair and equitable solution be found.



HISTORIC EVENTS


Mr. Jim Jepson (London East):: Mr. Speaker, on February 16, 1988, Soviet occupied Lithuania celebrated the seventieth anniversary of the restoration of its independence.
This peaceful religious celebration was attended by over
15,000	Lithuanians during the evening of the sixteenth. Unfortunately, we here in the West were unable to see the results of the celebration because the press had been shuffled out of the territory during the afternoon.
This peaceful, nationalistic celebration was interrupted by a Soviet militia of over 10,000 men, many of them coming from other parts of the Soviet Union. These men brutally beat the celebrants and hospitalized over 160 Lithuanians. Leaders and clergy of the Lithuanians were put under house arrest for three days with no contact with the outside world. There was even one instance in which a Lithuanian celebrant was beaten, had his head shaved, and was held prisoner for three days without food. Certainly this type of dehumanization is not just. Mr. Gorbachev's glasnost was not implemented in this situation. Why was a peaceful demonstration broken up with such brutality in a country that claims glasnost as its new policy?
I urge the Secretary of State for External Affairs (Mr. Clark) and the Government of Canada to pressure the Soviet Government and Mr. Gorbachev to live up to their policy of
glasnost and allow such peaceful demonstrations in the future. We all want peace, but not without freedom.



RAILWAYS


Mr. Jack Harris (St. John's East):: Mr. Speaker, once again Newfoundlanders are hearing that the federal and provincial Tory Governments are trying to close down the Newfoundland Railway.
One of the commitments when Newfoundland joined Confederation in 1949 was the maintenance of a rail link across the province. Until recently, Premier Peckford stood behind preserving that link. Today we have both the Premier and the Minister of Transport (Mr. Crosbie) trying to cut a deal which will do away with this constitutional arrangement.
It is absolutely essential that, before any decision is made, Newfoundlanders must see the studies upon which any decision is to be taken. What will happen to the 650 employees and the communities whose livelihood depends on the railway? Before any decision is taken, a definite special economic development program for any communities adversely affected must be put in place. If one transportation system is to traded for another, there must be a perpetual commitment to the maintenance of that system.
It is time for both the federal and provincial Tories to be open and honest with Newfoundlanders and tell them what plans they have for the railway.



ABORTION


Mr. Gus Mitges (Grey-Simcoe):: Mr. Speaker, the Canadian Advocates for Human Life, an association of lawyers across Canada, is pressing for legislation to provide protection for Canada's unborn children from abortion. They have added their weight to this crusade, as have the Knights of Columbus representing over 600,000 families, the Catholic Women's League of Canada with 128,000 members, Physicians for Life whose numbers are increasing daily, an increasing number of nurses, the Canadian Conference of Catholic Bishops plus all pro life groups, as well as hundreds of thousands of Canadian citizens.
Never in the history of Canada have we seen such a large number of Canadians working together to stop the killing of unborn human beings. Thursday, January 28, 1988, will go down in history as Black Thursday, a day on which the Supreme Court sentenced countless unborn babies to death by
February 25, 1988

abortion. This decision must be overturned. One does not solve social problems by creating innocent victims of a problem, our unborn children.
Therefore, I urge the Government to work in greater haste to enact legislation that will safeguard the life, liberty, and sanctity of every human person, including unborn children.



CANADA POST CORPORATION


Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: Mr. Speaker, under its five-year corporate plan, Canada Post has lowered its delivery standards, unable as it was to meet the previous ones. A postal services independant study has shown that one out of five letters is still not delivered on schedule, despite the lower standards. Mr. Speaker, Canadians deserve a better service.
As of today, the Minister and Canada Post Corporation have still not announced the measures they intend to take in order to ensure that the minimum standards they have already lowered will be met.
The climate in the Canada Post workplace is explosive. Why does the Minister encourage the confrontational style Canada Post adopted vis-a-vis its employees? How can the mail be delivered on time if those who move it are not motivated but rather frustrated?



HUMAN RIGHTS


Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, I hope I speak for all Members of Parliament in supporting Amnesty International's call on the new President of South Korea, inaugurated yesterday, to demonstrate his declared commitment to human rights by releasing all prisoners of conscience and by commuting all pending death sentences for so-called anti-state activities.
The continued detention of South Koreans for the peaceful exercise of their rights of freedom of expression and association belies the membership which South Korea would obviously like to claim as part of the democratic world. The fact is that South Korea's so-called economic miracle, often lauded by right-wing Canadians, has been bought at the price of much
political oppression. A rising GNP accompanied by rising rates of detention and suppression of dissent is not progress.
I call on the new president, Roh Tae-woo, to usher in a new era and declare the amnesty called for by Amnesty International.



OBITUARY TRIBUTE TO QUEBEC FEDERATION OF LABOUR PERMANENT DELEGATES

Louis Plamondon: Mr. Speaker, it is with great sorrow and sadness that we learned last Tuesday that four high-ranking members of QFL Construction were killed while on duty.
They are: Guy Perreault, Director General, QFL Construction; Jean-Claude Sureau, Director, Association nationale des travailleurs en tuyauterie; Claude Proteau, Assistant Director General, Federation interprovinciale des ouvriers en electri-cite\ and Gaetan Boucher, union representative, Association nationale des mecaniciens industriels.
On behalf of my colleague, the Minister of Labour (Mr. Cadieux), and all the members of the Quebec Caucus, I would like to offer my deepest sympathies to all QFL members, who have lost valuable colleagues, and to the family and friends, so sorely tried.
I had the opportunity to work with some of these men, but I am well aware of the dedication of all of them to the cause of Canadian workers.
I would like also, on behalf of the Government, to offer our condolences to the friends and relatives of the pilot, Jean Verriere, and the copilot, Gary Gadouas.



ENVIRONMENTAL AFFAIRS


Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, on November 7, 1986, the Minister of the Environment (Mr. McMillan), along with members of the Nova Scotia Government, announced a clean-up agreement for the Sydney tar ponds. The Minister said:
The tar ponds are an environmental menace to the health of the Sydney
residents.
Yet the Government continues to drag its collective feet on this very important project.
The Minister also said at that time that the workers of the coke ovens who would be losing their jobs would be offered

February 25, 1988
assistance by the federal Government in preparing for and obtaining new employment. Coke oven employees have already lost their jobs but nothing has been put in place.
Background information on that meeting of November 7 indicated that the federal Government said a CEIC industrial adjustment service agreement "may also be negotiated to assist those displaced workers presently employed at the Sysco coke ovens in preparing for and endeavouring to obtain alternate employment". Where is this assistance and where is this agreement? Why can the people of Sydney not rely on the promises of the Government?



HISTORIC EVENTS


Mr. Andrew Witer (Parkdale-High Park):: Mr. Speaker, 70 years ago on February 24, 1918, Estonia became a free and independent nation. The Soviet Union brought an end to that freedom in 1940 when Estonia and other Baltic states were forcibly annexed to the U.S.S.R. Estonia remains occupied by Soviet troops to this day.
Canada's position on the illegal occupation of the Baltic nations is clearly stated in the Prime Minister's (Mr. Mul-roney) message to the Estonian community marking this seventieth anniversary of Estonian independence, and I quote:
Canada has never recognized in law this act by the U.S.S.R., nor have we
any intention of doing so now.
The Estonian community in Canada invite all freedom-loving Canadians to join with them in commemorating this spirit of independence and in demonstrating their desire for liberty and justice in their homeland.
I call upon the Secretary of State for External Affairs (Mr. Clark) to use all available measures to maintain pressure on the Soviet Union until its illegal occupation of Estonia is ended and that country once again takes her rightful place among the free and independent nations of the world.



TOURISM


Mr. Fernand Robichaud (Westmorland-Kent):: Mr. Speaker, the Conservatives have again shown little concern for Canada's tourism industry. In its last Budget the Government again increased the price of gasoline by one-cent a litre. Add this to the two-cent a litre hike in the excise tax announced in September, 1985, the one-cent a litre increase in January,
1987,	and the one-cent a litre hike announced in February, 1987.
These increases, coupled with a 3 per cent hike in the sales tax since 1984, have made gasoline prices in Canada very uncompetitive with our largest tourism customer, the United States. Today the price of gasoline in Canada is over 50 per cent higher than in the U.S. This difference will certainly have a negative effect on the number of American visitors to Canada.
The ever-widening gap in the price of gasoline has prompted the Canadian Automobile Association to state that transportation related industries in Canada will be unable to compete with their American counterparts as we enter a free trade era.
For many regions in the country, tourism is one of the few industries with real growth potential. Tourism has enormous potential for job creation. Why is the Conservative Government attempting to choke off this industry?



WINTER OLYMPIC GAMES


Mr. Gerry St. Germain (Mission-Port Moody):: Mr. Speaker, on February 13, Mission-Port Moody sent three athletes to the Olympic Games in Calgary. It is with pride that 1 rise in this House today to congratulate Tracy Wilson and Rob McCall on winning the Bronze Medal for Canada in the pairs ice dance competition. I wish to note that Tracy Wilson is originally from Port Moody, British Columbia, where she spent many years developing the skills and abilities which have served her so well.
In addition, we were able to watch Eden Donatelli capture Canada's second Silver Medal, in the 500-metre short track speed skating competition last night. Eden is from Mission, British Columbia. As well, Kathy Gordon, from Mission, British Columbia, is preparing to compete in the 5,000-metre speed skating event.
Can you imagine, two medal winners and such a great contribution to the Olympics from Mission-Port Moody, British Columbia? Let this House and all Canadians congratulate Mission-Port Moody and these great Canadians.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: I just want to say to the Hon. Member for Mission-Port Moody (Mr. St. Germain) that, probably as well as anyone here, I can join with him in his congratulations.


Some Hon. Members:: Hear, hear!
February 25, 1988



PUBLIC SERVICE


David Orlikow: Mr. Speaker, Public Service employees who are members of the Public Service Alliance of Canada are asking their Members of Parliament why there has been no progress in their contract negotiations. The PS AC has proposed that Treasury Board agree to reduce 31 sets of negotiations to seven to streamline the bargaining talks. Treasury Board has refused, despite savings to the taxpayers which the PSAC estimates at $1.5 million. It is difficult to see why the Government, which claims to be cost conscious, can turn its back on this kind of saving.
Furthermore, the Canada Labour Relations Board recently decided to amalgamate 28 bargaining units at Canada Post into four to gain greater bargaining efficiency. Yet the Government ignores that precedent in its own negotiations.
Why is the Government so deaf to good advice? Because it claims there will be more strikes if bargaining units are consolidated. Yet the Government should know that 95 per cent of negotiations with that union have resulted in negotiated settlements. Why is the Government afraid of efficient public service bargaining? Why does it not get on with the job and deal with the union fairly?



U4I5) ORAL QUESTION PERIOD   THE ADMINISTRATION ALLEGATIONS MADE AGAINST FORMER MINISTER-PRIME MINISTER'S STATEMENTS

Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, my question is for the Deputy Prime Minister. The Prime Minister said yesterday that the media and the Opposition had, to use his words, "lynched, drawn and quartered" his former Minister "with no evidence".
Is it not true that on January 18, 1987, even before a single question had been asked by the Opposition the Prime Minister himself said that the former Minister was fired because of, and I use the Prime Minister's words, "certain facts related to property transactions linked to the Oerlikon plant"?
Is it not also true that the allegations against the former Minister were made, not by the Opposition but by the Prime Minister's own senior advisers? Is it not also true that the Prime Minister himself called in the Mounties and then called-


Mr. Speaker:: Order. I certainly hesitate to-


Mr. Shields:: That's a Sheila Copps question.
Oral Questions


Mr. Speaker:: I ask Members on the government side please to be quiet. This is not an easy issue and I am going to try to deal with it as I hope all Members would have me do. I very much hesitate to interrupt the right hon. gentleman but I do want to keep something in mind in this place.
The former Minister who is being discussed has just been acquitted of all of the charges by a jury of this country. That fact does not make it improper to ask some questions about the administration of the Government or some other thing.
I know that the right hon. gentleman will bear with me in this because I do not mean this as an admonishment. However, if there are to be questions on this issue I want them to be carefully phrased and I want them to be directed to the administration of the Government, and especially to matters upon which the Government has a responsibility to answer. However, I do not want any suggestion that anybody in this place who has been acquitted by a jury in this country is to be retried here. The Right Hon. Leader of the Opposition.


Some Hon. Members:: Hear, hear!


John Napier Turner: Mr. Speaker, both myself and the Member for Oshawa accepted the verdict of the jury completely. What we are complaining about today before Your Honour is the Prime Minister's attempt to rewrite history.


Some Hon. Members:: Right on!


John Napier Turner: I will confine my questions strictly to the Prime Minister's statements.
Again to the Deputy Prime Minister, is it not true that the Prime Minister then called a press conference-


Mr. McDermid:: Is that all you have got going for yourself, Turner?


Mr. Riis:: It's not a laughing matter.


John Horton McDermid: He hasn't asked a question on the economy in months.


Mr. Broadbent:: When you're back on this side you can ask the questions.


Mr. Speaker:: Order. The Right Hon. Leader of the Opposition has clearly indicated that he has accepted the intervention of the Chair in this matter and he has made it clear that he is proceeding subject to the caution that I have expressed. I have given the Right Hon. Leader of the Opposition the floor. The Right Hon. Leader is entitled to ask the question and he is entitled to the courtesy of all Hon. Members to give him a chance to ask it. The Right Hon. Leader of the Opposition.


John Napier Turner: Mr. Speaker, we are not
going to be dissuaded from pursuing this particular issue with the Deputy Prime Minister.

February 25, 1988
Oral Questions
Is it not true that in that press conference the Prime Minister announced that the former Minister was under RCMP investigation and is it not true that the Prime Minister fired the Minister for reasons of, what he called at that press conference, public morality? Is it not true that the Prime Minister then told Parliament on the following day, January 19, and I quote from Hansard, that the issue is "an alleged serious matter that involves morals, perhaps public ethics, criminal law and so on"?
Why does the Prime Minister attempt to shoot the messenger? And why does the Prime Minister blame the media and the Opposition for statements he made over that weekend about his former Minister?


Hon. Don Mazankowski (Deputy Prime Minister, President of the Privy Council and President of the Treasury Board):: Mr. Speaker, I think what is important in this issue is the importance of the spirit of the code being upheld, and by the actions of the Prime Minister the spirit of the code was indeed upheld.



ALLEGATIONS-GOVERNMENT POSITION

John Napier Turner: Mr. Speaker, if the Prime Minister thinks the former Minister of State (Transport) was the victim of a witch hunt, he should look at his own record. When the Prime Minister fired the former Minister and called in the RCMP a year ago, he did not do so on the basis of allegations by the Opposition or the media but on the basis of what he called the facts. He would now have us believe that last year's facts are today's figment of the imagination of the media and the Opposition. Could the Deputy Prime Minister inform the House about any allegations or criminal behaviour made either by the press or the Opposition, here in the House or outside? Name them. Or will the Deputy Prime Minister tell his Leader, the Prime Minister of Canada, to take his own medicine instead of preaching to others?


Donald Frank Mazankowski: Mr. Speaker, the Prime Minister pointed out at that time, and I do not have the precise words he used, but I think it was to the effect that information had been drawn to his attention that could provide the basis of a potential conflict of interest, and it was on that basis that the action was taken. I am surprised that the Right Hon. Leader of the Official Opposition is taking such offence at the actions that were taken by the Prime Minister. I think his actions are a clear indication that the code was not only applied, but specific action, swift action, was taken by the Prime Minister. He should be applauding that.


John Napier Turner: Mr. Speaker, we are not complaining about the action of the Prime Minister in referring this matter to the police, or any of the other citations I have made today. We are complaining that the Prime Minister attempted yesterday to rewrite history and lay the blame for the whole issue on the media and the Opposition in this House of Commons. That is the issue.


Some Hon. Members:: Oh, oh!


John Napier Turner: I will say to Members opposite that the issue would not have arisen in this House had the Prime Minister not made those statements yesterday. That is the truth of it.


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


John Napier Turner: Let me-


John Horton McDermid: The rat pack has a new leader.


Mr. Gauthier:: You are nervous over there.


Mr. Speaker:: The Right Hon. Leader of the Opposition.



EXEMPTIONS FROM PROPOSED CONFLICT OF INTEREST ACT

John Napier Turner: Mr. Speaker, let me turn to the legislation which deals with this sort of matter, the new conflict of interest legislation tabled yesterday by the Prime Minister. Will the Deputy Prime Minister explain why any regulations under the new ethics commission must first be approved by Cabinet, the very people who caused this mess in the first place?


Some Hon. Members:: Oh, oh!


John Horton McDermid: Look around you.


John Napier Turner: Will the Deputy Prime Minister explain why Dalton Camp, the Principal Secretary of the Prime Minister, the Chief of Staff of the Prime Minister, and political staff, are not going to be covered by these new rules as they are covered by the old rules? Why are the backroom boys in the Prime Minister's office going to be exempt from the law?
I ask the Deputy Prime Minister further to explain why this law includes nothing about government contracts, the letting of government contracts, nothing about government advertising, nothing about government lobbying, and nothing about the patronage practised by the Conservative Party since it came into power?


Donald Frank Mazankowski: Mr. Speaker, first I remind the Hon. Member that the lobbying Bill is before Parliament at the present time. Is the
February 25, 1988

Leader of the Opposition suggesting in the preamble to his question that the Opposition has not hurled unfounded allegations and accusations across the floor of the House? If he is suggesting that, then he has not been paying attention, he has not been listening, or he has a very, very short memory. That has been common practice in this session of Parliament, Mr. Speaker.


Jean-Robert Gauthier: That is not true.


John Napier Turner: Back that up.


Donald Frank Mazankowski: Mr. Speaker, I also find it very strange that while the Leader of the Opposition condemns the legislation that was tabled yesterday he suggested that he would only refine and strengthen the conflict of interest guidelines. We have legislated them.



PROVISIONS GOVERNING TRUSTS

Hon. Bob Kaplan (York Centre):: Mr. Speaker, my question is also for the Deputy Prime Minister. The Government has not legislated anything, it has introduced a Bill. It is a Bill like the lobbying Bill which can sit on a shelf forever.
I would like to ask the Deputy Prime Minister this question. Why does the conflict of interest Bill contain a step backward on the subject of trusts? Pursuant to Clause 10(2) of the Bill a trustee can still be a spouse or riding president, as has happened and which is the case under the present guidelines of the Government, whereas under the Ontario Bill a trust must be at arm's length and trustees must be individuals or corporations at arm's length from a Minister. Why is there a step backward here?


Donald Frank Mazankowski: Mr. Speaker, I take it from the Hon. Member's question that Members opposite would be prepared to proceed with this Bill in short order. If we can get an agreement from them, I am sure that that could be negotiated. Let them put their money where their mouth is.
With regard to the provision to which the Hon. Member refers, if he will read the Bill carefully he will find that those arrangements can only be made with the express consent and permission of the Commission.



DISCLOSURE OF ASSETS

Robert Phillip Kaplan: Mr. Speaker, under the regulations approved by Cabinet why should there be a discretion to allow non-arm's length trustees? What possible justification can there be for that?
Why is disclosure of assets not required, as Mr. Justice Parker who investigated the former Minister of Regional Industrial Expansion recommended, and as Ontario has already set out in its legislation?
Oral Questions


Donald Frank Mazankowski: Mr. Speaker, the terms and reference of any trust arrangement could only be made with the concurrence, the recommendation and approval of the independent Commission.
With regard to disclosure it is clear that everything must be disclosed to the Commission. The Commission makes that decision.
If the Hon. Member who has just asked the question-a great defender of civil liberties-would look at Clause 31 he would find that the Commission would take into account the necessity of ensuring that there is a balance, a balance between the public interest with respect to disclosure and the interest with respect to reasonable privacy for the Member involved. I am surprised that the Hon. Member would take exception to that.



PETRO-CANADA SALE OF SHARES TO FOREIGNERS-GOVERNMENT POSITION

John Edward Broadbent: Mr. Speaker, my question is directed to the Deputy Prime Minister. Yesterday, the Minister of Energy, Mines and Resources failed to give a clear answer, both in and outside the House, to questions about the future of Petro-Canada. Canadians will not stand for privatizing Petro-Canada, nor will they stand for selling shares to foreign nationals. Could the Deputy Prime Minister give Canadians the assurance that the Canadian Government does not intend to sell shares in Petro-Canada to foreign nationals?


Donald Frank Mazankowski: Mr. Speaker, the Prime Minister has stated on a number of occasions that Petro-Canada would only be privatized if it was considered in the best possible interests of the national public. There has been no decision taken with respect to the privatization of Petro-Canada. If there is such a decision it will be announced in due course.



POSITION OF MINISTER

John Edward Broadbent: Mr. Speaker, with respect I would like to say to the Deputy Prime Minister that the Government had better get its act together. According to a report that was in the press yesterday, which was not denied by the Minister of Energy, he stated in an interview that future expansion of Petro-Canada was going to be conducted in the form of selling shares. If that is not privatization I do not know what is.

February 25, 1988
Oral Questions
I would like to ask the Deputy Prime Minister now, is he saying to the House that the Government has not taken a decision to sell shares of Petro-Canada to the public? If so, what was the Minister of Energy talking about?


Donald Frank Mazankowski: That is correct, Mr. Speaker. I indicated earlier that there has not been a decision made with respect to this.



EFFECT OF CANADA-UNITED STATES FREE TRADE AGREEMENT

John Edward Broadbent: I accept what the Deputy Prime Minister is saying as a correction of what the Minister of Energy had publicly stated before.
The Deputy Prime Minister is shaking his head. That is the way that I understood it. If he wishes to clarify that I would appreciate it, and I am sure that Members of the House would.
As I understand it, the Minister did not deny it outside the House. Yesterday he was quoted in the press as stating they were going to sell shares. The Deputy Prime Minister states that that is not the case.
If the Government has not yet taken that decision, will the Deputy Prime Minister or the Minister for International Trade confirm that, according to a clause in the proposed trade agreement with the United States, if the Government of Canada does not announce at the outset that any such shares would be restricted to Canadians, it will be impossible to do so later on?


Hon. Pat Carney (Minister for International Trade):: Mr. Speaker, in the absence of the Minister responsible for privatization I can assure the House that this issue was taken into account in the free trade agreement negotiations. Our right to privatize and hold shares in the name of Canadians, or restrict ownership to Canadians, is left intact.


John Edward Broadbent: That's not what your official said this morning.

[ Translation]



OFFICIAL LANGUAGES


Jean-Robert Gauthier: Mr. Speaker, today the Supreme Court, in an historic decision, confirmed the vested rights of French-speaking Canadians living in Saskatchewan, rights they have had since 1905. I just want to read one sentence from today's decision:
The statutes of Saskatchewan must, by virtue of the province's constituent statute, the Saskatchewan Act, be enacted, printed and published in English and French. Since the statutes of Saskatchewan were not enacted in the manner and form required by its constituent statute, it follows that they are invalid.
My question for the Deputy Prime Minister is this: Considering the precedents set both in Manitoba and New Brunwick, and considering that the federal Government has always supported the provinces in their continuing efforts to make their legislative and judicial services bilingual, is the federal Government prepared to offer the Province of Saskatchewan today-since there is a matter of urgency in this case-all the human and financial resources it needs to help translate all statutes adopted by Saskatchewan in English only since 1905?


Hon. John C. Crosbie (Minister of Transport):: Mr. Speaker, this was not a case in which the Government of Canada intervened because it dealt with provincial matters or questions of provincial jurisdiction only.
Naturally, we are interested in and support the concept of bilingualism across Canada. If Saskatchewan wants us to assist, we certainly would co-operate in any way possible to see that it carries out the judgment. Of course Saskatchewan will have to decide on its own course of action.



TRANSLATION OF SASKATCHEWAN STATUTES-REQUEST FOR FEDERAL ASSISTANCE

Jean-Robert Gauthier: My supplementary question is directed to the Deputy Prime Minister or the Acting Minister of Justice. Given the fact that the Province of Saskatchewan has adopted the Meech Lake resolution, and was one of the first provinces in the country to do so; given that the House has also adopted that resolution; given the spirit of that resolution that states in no uncertain terms that the federal Government and the provinces will protect minority rights, is the Government ready at this time to give its guarantee that it will do all in its power to assist Saskatchewan to comply very generously with this requirement of the Supreme Court of Canada, that is, to translate all the laws of the Province of Saskatchewan?


John Carnell Crosbie: Surely, Mr. Speaker, the Government of Canada does not have to do anything with respect to the Government of a province complying with what the Supreme Court of Canada states is the law.
We can expect that the Government of the Province of Saskatchewan will comply with this decision of the Supreme Court of Canada, just as we would comply with any decision of the Supreme Court of Canada. If they need any assistance from us, the Prime Minister's attitude and policy are well known, and I am sure we will attempt to co-operate.
February 25, 1988



APARTHEID


Mr. Howard McCurdy (Windsor-Walkerville):: Mr. Speaker, my question is directed to the Deputy Prime Minister. The South African Government has again demonstrated its pathologically vicious resistance to any democratic participation by blacks in that country.
Would the Deputy Prime Minister indicate to the House what action the Government now plans to take, in addition to rhetoric, in response to this situation which has been precipitated in South Africa and which indicates the impossibility of a peaceful basis for negotiated peace there?


Pat Carney: Mr. Speaker, I believe you are aware that the Secretary of State for External Affairs is ill, but I spoke to him today on this issue.
He has already been in touch with some of the Foreign Secretaries of the Commonwealth to determine an effective response to this move by South Africa. Of course Canada strongly condemns the new restrictions that the South African Government has put in place.
I think that the House can respect and acknowledge the outstanding efforts that have been made by the Secretary of State for External Affairs in dealing with this issue of apartheid.



REQUEST THAT CANADA IMPOSE TOTAL ECONOMIC SANCTIONS

Howard Douglas McCurdy: Mr. Speaker, the entire policy of the Government has been premised on the possibility that there might exist, within the heart of the South African Government, the ability to deal with black people there. That is not going to happen now. The Prime Minister has indicated that he was going to impose complete diplomatic and economic sanctions on South Africa.
Will the Government not now call in the South African Ambassador and indicate to him our complete condemnation of the South African Government; recall the Canadian Ambassador to South Africa; and implement absolute economic sanctions against South Africa right now?


Pat Carney: Mr. Speaker, the Secretary of State for External Affairs has already expressed the view that the action taken by South Africa is an invitation to violence. He has worked with the Foreign Secretaries in the Commonwealth to deal with this in an effective manner. I would suggest that his actions in regard to the distaste that Canada feels for apartheid speak for themselves.
In terms of diplomatic representation and recalling our Ambassador, I would point out to the Hon. Member that Canada continues to support the opponents of apartheid. The
OraI Questions
best way to do that is to maintain our diplomatic relations with South Africa.



SEVERANCE OF DIPLOMATIC LINKS-GOVERNMENT POSITION

Hon. Andre Ouellet (Papineau):: Mr. Speaker, my question is also directed to the Minister who is replacing the Secretary of State for External Affairs today. It is quite clear that meaningful dialogue leading to a non-racial representative Government is absolutely not in the cards for South Africa.
The Minister recently stated that he has Cabinet authorization in his pocket to impose further sanctions when necessary. Is it not the feeling of the Government of Canada that this time has arrived, that the suggestion made earlier by the Leader of the Opposition to cut all commercial and diplomatic links with South Africa should be adopted now? Why is it not being done?


Pat Carney: Mr. Speaker, I think I have already responded to that question. I pointed out that terminating our diplomatic links with South Africa is not, in our view, a very meaningful or effective step to take. We can do better to support our position against apartheid by maintaining those diplomatic links rather than by breaking them. I have . already told the House that the Secretary of State for External Affairs has, from his sick-bed, called his colleagues in other Commonwealth countries and is discussing the very kinds of actions the Hon. Member raises.
We have worked in the past in step with our Commonwealth colleagues, and the Secretary of State for External Affairs is following that pattern now.
I suggest that the House wait until he returns and is able to report on the results of his discussions.



REQUEST FOR GOVERNMENT ACTION

André Ouellet: Mr. Speaker, I remind the Minister that it was a statement made recently by the Prime Minister which said that if no progress was made, or if there was no chance of any progress, he would cut diplomatic relations. We on this side of the House have the feeling that this situation has existed for a long time. Maybe the Conservatives are slow to realize that they are going nowhere in their negotiations toward a non-racial representative Government in South Africa.
Therefore, again I ask the Minister: will she convey to the Secretary of State for External Affairs that there is no more time for words, that actions are necessary? Unless the Government is ready to take a strong stand on this matter, it will be pure hypocrisy on its part.


Pat Carney: Mr. Speaker, I think that I have performed a very useful function in conveying to the House the position of the Secretary of State for External Affairs as a result of conversation with him

February 25, 1988
Oral Questions
this morning, the steps he is now taking, and the fact that he will be reporting on his deliberations with the Foreign Secretaries of the Commonwealth when he returns to the Elouse, I think that is more useful than the kind of rhetoric we are hearing from the opposition benches.



CANADIAN SECURITY INTELLIGENCE SERVICE


Mr. Dan Heap (Spadina):: Mr. Speaker, I have a question for the Solicitor General. Yesterday the Solicitor General assured this House-and I am quoting from Hansard at page 13081-"CSIS was not involved in any way whatsoever with the travel arrangements or this particular case", referring to Mr. Mohammad's failed flight from Canada. Yet the media report that two CSIS agents came to the RCMP office at Pearson Airport within five minutes of Mr. Mohammad's arrival and had to be chased away by the RCMP; also that immediately after Mohammad's departure, all or nearly all the Canadian media were tipped off about his flight, and that British intelligence were likewise tipped off.
In the face of these reports does the Minister still maintain that CSIS was not in any way involved in this case, or does the Minister prefer to inquire further and report back to this House as to just what CSIS was doing in connection with this case?


Hon. James Kelleher (Solicitor General of Canada):: Mr. Speaker, I welcome the question from the Hon. Member, because I did inquire further as a result of those news reports.
1 met this morning with the Deputy Commissioner of the RCMP and also the Director of CSIS, and I can confirm to the House that I was advised by them that CSIS was not involved in the travel arrangements; second, that CSIS did nothing to contribute to the failure of those arrangements; and, third, that CSIS did not leak the news or anything to do with the travel arrangements to the media or anyone else.



POSSIBILITY OF AGREEMENT WITH ISRAELI SECRET SERVICE

Daniel James Macdonnell Heap: Mr. Speaker, as a supplementary I would ask this question. It relates to The Ottawa Citizen report that about an hour after Mohammad's flight Radio Israel phoned to the office of Clayton Ruby, Mohammad's lawyer, to inquire about the departure.
Will the Minister tell this House whether CSIS, pursuant to the provisions of the CSIS Act, has any kind of agreement with Mossad, the Israeli Secret Service, for exchange of information of this kind?


James Francis Kelleher: Mr. Speaker, I am sure the Hon. Member knows that we do not disclose publicly what our security arrangements are-


Some Hon. Members:: You don't have to.


James Francis Kelleher: -or what our agreements are with any country for the exchange of information, but whatever we do I can confirm to the House that the arrangements are in conformity with the mandate given to CSIS under the Act.



EXTERNAL AFFAIRS


Mr. Alan Redway (York East):: Mr. Speaker, my question is directed to the Minister who is answering for the Secretary of State for External Affairs. Yesterday marked the seventieth anniversary of the creation of a free Estonia. Although Estonia is now occupied by the Soviet Union, both the United States and Australia officially recognize the Honorary Consuls not only of Estonia but also of Latvia and Lithuania. Canada, on the other hand, has been thinking about the whole question since 1972.
Would the Minister advise the House why Canada does not recognize these Honorary Consuls General? Why has it taken some 16 years to think about it? Is it that we are slow learners, or is it that we are just lacking in courage?


Pat Carney: Mr. Speaker, I think all Canadians can join with Estonian Canadians in celebrating the anniversary of independence in 1918, and I commend the Hon. Member for bringing forward this issue at this time.
In respect to the specific question he raises, I cannot add to the statement by the Secretary of State for External Affairs that the matter is under review, but I will bring it to his attention.



CANADIAN SECURITY INTELLIGENCE SERVICE


Mr. Sergio Marchi (York West):: Mr. Speaker, my question is also for the Solicitor General and concerns the growing speculation that CSIS intentionally sabotaged the voluntary departure of Mr. Mohammad.
I would like to ask the Minister, pursuant to the question of the Hon. Member for Spadina, given that two CSIS agents were dispatched to the Toronto Airport and met with Mr. Mohammad and the two RCMP officers accompanying him before his departure, will the Minister come clean on this whole affair and explain the precise role played by CSIS after it found out about the plan by the Minister of Immigration to remove Mr. Mohammad voluntarily?
February 25, 1988

What precise follow-up by CSIS was undertaken? Was there a report to the Director, to the Minister? Did CSIS-
Mir. Speaker: The Elon. Member has put his question very directly, and I do not think the Elon. Minister would have any difficulty in knowing what he is asking for.


James Francis Kelleher: Mr. Speaker, it does not come as any surprise to me that there were CSIS officials at the airport. The fact is that they have an office there in very close proximity to the RCMP office where Mr. Mohammad apparently was sequestered.


An Hon. Member:: Did they talk talk to each other?


James Francis Kelleher: The CSIS officers did in fact have a discussion with some RCMP officers there, not at all, I may say, as depicted in the report this morning in The Globe and Mail, which I am advised is false.
I can confirm that as a result of my meeting this morning with the Deputy Commissioner and the Director of CSIS, nothing that CSIS has done in this matter has in any way contributed to the failure of the travel arrangements.


Sergio Marchi: Mr. Speaker, the fact is that this Minister doesn't know what the hell is happening with his Department and would be better off running a-


Mr. Speaker:: The Hon. Member feels very strongly about this matter and with good reason, of course. The Hon. Member will put his question.



ADMITTANCE TO OTHER COUNTRIES OF INDIVIDUAL IN QUESTION

Sergio Marchi: Mr. Speaker, let me try the Minister of Immigration with a supplementary question.
Since the entire deportation procedure with Mr. Mohammad is proving to be a very costly, colossal, embarrassing exercise, and given that at the end of this process a country willing to accept Mr. Mohammad must be found, could the Minister inform the House if the Canadian Government has taken the precaution and initiative of contacting foreign Governments in order to ascertain which countries may be willing to accept Mr. Mohammad, in the eventuality that a deportation order is upheld? If so, what has the response been to date? If not, does he not believe that he should do it now and avoid a costly nightmare at the end of this very lengthy and embarrassing exercise to all Canadians?


Benoît Bouchard: Mr. Speaker, in my opinion, the deportation of someone like Mr. Mohammad is not a matter of money, but a matter of process, and I would remind the Hon. Member that we have been involved in this deportation process for one month now.
Oral Questions
Mr. Mohammad asked our co-operation to be allowed to leave Canada by his own means, as he was entitled to do. However, he did not succeed. For the moment, all our energies must be focused on the deportation process. If and when there is a deportation order, we shall determine the best way to proceed.
Once again, in this case the Hon. Member is trying to put the cart before the horse.



PETRO-CANADA POSSIBLE PRIVATIZATION-GOVERNMENT POSITION

Nelson Andrew Riis: Mr. Speaker, my question is directed to the Deputy Prime Minister. There seems to be a serious contradiction in what he said today and what the Minister of Energy said yesterday to the press. Yesterday the Minister of Energy said in terms of the question of the privatization of Petro-Canada:
It's a question of timing. It's not a question of should we.
The Deputy Prime Minister indicated today that no decision has been made. The Minister of Energy said that it is not a question of whether the Government is going to privatize Petro-Canada but when the Government is going to privatize Petro-Canada.
Will the Deputy Prime Minister now do the honourable thing and explain clearly whether he is the one we can believe on this issue, or is it the Minister of Energy?


Donald Frank Mazankowski: Mr. Speaker, you can believe both of us. If the Hon. Member took the time to review what was said in the House of Commons yesterday, as reported at page 13078 of Hansard he would find the Minister said:
-the Cabinet has yet to make a decision at this time, the question of Petro-Canada is still being examined, both in my Department and in other government agencies.
Again, as reported at page 13079 the Minister said:
-I would like to point out that the present Government will make a decision about privatizing Petro-Canada when it believes it is in the interests of Canada and Canadians to do so.
That is the same answer I gave earlier, Mr. Speaker.



GOVERNMENT POLICY

Nelson Andrew Riis: Mr. Speaker, my supplementary question is for the Deputy Prime Minister. He will know that the Minister of Energy the day previous to the quotes he was reading from Hansard indicated in Calgary that it was the Government's intention to privatize Petro-

February 25, 1988
Oral Questions
Canada. He said outside the House yesterday that it was the Government's intention. It was just a matter of timing in terms of the announcement.
Will the Deputy Prime Minister come clean and be up front with the people of Canada and say, yes, the Government is going to privatize Petro-Canada, or it is not? Let the Government be up front about this matter.


Donald Frank Mazankowski: Mr. Speaker, why doesn't the Hon. Member take the wax out of his ears? I said, and the Minister of Energy, Mines and Resources said, that no decision has been taken. When it is in the public interest, if it is so deemed to be in the public interest to privatize Petro-Canada, then a decision will be made. When a decision is made, it will be announced.



REGIONAL ECONOMIC DEVELOPMENT


Raymond Garneau: Mr. Speaker, in the absence of the Minister of Regional Industrial Expansion, I shall address my question to the Deputy Prime Minister.
Yesterday, the Minister of Regional Industrial Expansion went to Montreal to announce the East Montreal Recovery Program after nearly three years of studies and two reports. He said nothing to Montrealers about the closing of plants, the Old Port or the development of the Port of Montreal, and he said nothing to the thousands of older workers who have lost their jobs because of plant closings.
My question to the Deputy Prime Minister is this: How does the Conservative Government believe that it can solve the unemployment problems in East Montreal with a measly $7 million this year when the Quebec Government was willing to provide $106 million and the City of Montreal $90 million?


Hon. Bernard Valcourt (Minister of State (Small Businesses and Tourism) and Minister of State (Indian Affairs and Northern Development)):: Mr. Speaker, the Hon. Member could also add that the Quebec Government would have allocated these $106 million over a three year period and that this was not new money either.
How can we help East Montreal? First, I would like to remind the Liberal Party that, to my knowledge, the problem started in 1981 and that, during the three years between 1981
and 1984, the previous Government did not do very much about it.
If we look at the situation since 1984, we find that a great deal of progress has been made. As for us on this side of the House, Mr. Speaker, we want to try to develop East Montreal and we are providing the tools to do so, tools such as the tax reform, tools such as a healthier economic climate and a major tool such as the free trade agreement which the Liberal Party should support, as this would be beneficial to East Montreal.



IMPORTANCE OF HELPING METROPOLITAN PERIPHERAL AREAS

Raymond Garneau: Mr. Speaker, the Minister fails to appreciate the problem of Montreal East. Given the thousands of idle workers, it goes without saying that the free trade agreement, which may very well signal further plant closures, is not the answer to their problem.
Mr. Speaker, 1 have a question pertaining to regional economic development generally. Yesterday the Minister went alone to Montreal, and he did not make any announcement supportive of the efforts being made by provincial and municipal authorities.
Does the Conservative Government intend to follow the same approach with respect to the neighbouring regions and set up programs which are totally divorced from the initiatives taken by the Government of Quebec or by municipal authorities, as was twice suggested by Quebec Ministers Marc-Yvan Cote and Gil Remillard?


Bernard Valcourt: Mr. Speaker, should I really tell Liberal Party Members that they are hardly in a position to lecture us in connection with federal-provincial relations, particularly with the Government of Quebec?
If one looks at the situation, the Government's position is clear: the economic development strategy as it applies to Quebec will be the subject of forthcoming discussions between the Minister of Regional Economic Expansion and his Quebec counterpart. If memory serves, Mr. Speaker, the Hon. Member for Laval-des-Rapides recently complained about the relations between Ottawa and Quebec over the past three years; these relations are excellent and we will continue to work in co-operation with the City of Montreal.


Mr. Speaker:: Before the Hon. Member for Skeena asks questions, I would point out that his colleagues and others in the House are still waiting to ask questions. I would ask that from now until the end of Question Period the questions be brief and very much to the point. The Hon. Member.
February 25, 1988



UNITED NATIONS HUMAN RIGHTS COMMISSION


Mr. Jim Fulton (Skeena):: Mr. Speaker, my question is for the Deputy Prime Minister. As he knows, the United Nations Human Rights Commission is today considering three matters of substantial importance to the aboriginal peoples of Canada: the designation of 1992 as the International Year of Indigenous Rights; the drafting of international standards on the treatment of indigenous peoples, and the appointment of a United Nations official to examine and report on treaties.
Will the Deputy Prime Minister rise today in the House and state unequivocally that Canada endorses those three principles?


Bernard Valcourt: Mr. Speaker, Canada is supportive of the important work of the Working Group on Indigenous Populations in developing global standards on indigenous rights. Canada considers that the proposed treaty study, as currently drafted, will divert both attention and resources from the universal scope of WGIPs work. The proposed treaty study would focus on only a small number of countries-


Some Hon. Members:: Oh, oh!


Bernard Valcourt: Maybe the Liberals are not interested in the fate of our native people but they should at least be courteous enough to listen to the answer.
Canada's position is that we would prefer to have the proposal referred back to the WGIP for further consideration or for it to be broadened.



GOVERNMENT POLICY

James Ross Fulton: Mr. Speaker, my supplementary question is for the Deputy Prime Minister. I am sure he is aware, having listened to the Minister who has just responded, that these three principles will be set off for at least four years and that, combined with what we find in this week's Estimates with cuts to comprehensive claims, lands reserves and trust, economic development and self-government for aboriginal people in Canada, it is now abundantly clear that the assimila-tionist policies of this Conservative Government are the same ones that are found in the Nielsen Task Force report, the Buffalo Jump of the 1980s.


Donald Frank Mazankowski: Mr. Speaker, when the Hon. Member talks about the Estimates, perhaps he may want to explain to the natives and the people of Canada why he and his Party voted against some $29 million for additional expenditures relating to native people for economic and social development and Indian selfgovernment.
Oral Questions
Let him explain that to the Canadian people, Mr. Speaker.



CANADIAN NATIONAL RAILWAYS


Hon. Lloyd Axworthy (Winnipeg-Fort Garry):: Mr. Speaker, I have a question for the Minister of Transport. Last June 29 in the House I raised a question that was answered by the Deputy Prime Minister concerning the proposed plan of the CN to remove a number of senior administrative and management jobs from the western region. The reply of the Deputy Prime Minister at the time was to quote from a press release which said:
"On the contrary, CN will maintain-and in some respects likely enhanceits regional presence, particularly in western Canada-
Today, the regional Vice President, Mr. Campbell, confirmed that 296 jobs in CN will be removed from Winnipeg and Edmonton. Once again we have a case of broken promises by the Government.
In light of the assurances given by his colleague, will the Minister of Transport be prepared to review the decision by CN and reject that decision which runs against both the assurances of the Government and the interests of maintaining a federal presence in western Canada?


John Carnell Crosbie: Mr. Speaker, it is too bad. The hon. gentleman has not asked many questions on transportation and now he is just as wildly inaccurate in this area as he was in the other area. Usually he is fuming about free trade.


Some Hon. Members:: Order.


John Carnell Crosbie: If the rest of you can talk on and on and on, why can't I?


Mr. Speaker:: Of course the answer is because I might intervene. The Hon. Minister will please answer the question.


John Carnell Crosbie: Yes, Mr. Speaker. The position is that CN expects to reduce its administrative and management ranks by some 1,020 positions system-wide by mid-1988. It is using a special separation and early retirement package and is not filling vacant jobs. This is not a policy that just applies in western Canada, it applies right across the system.
CN is trying to scale back just about 10 per cent of its administrative and management staff. This corresponds with the fact that it has been downsizing generally so that it can get its productivity levels closer to the average of North American railways. It is an ongoing matter. It happened last year as well and it happened when the hon. gentlemen opposite were in power.

February 25, 1988
Borrowing authority
There is no plot against the western part of Canada. As a matter of fact most of CN's activity is centered in western Canada because that is where the business is today. That is where it will continue to make a great effort.



REQUEST FOR REVIEW OF RAILWAY'S PLAN

Lloyd Axworthy: Mr. Speaker, I would like to elaborate on the Hon. Minister's last comment. If it is the case that 70 per cent of the volume of CN business is in western Canada, why will we be losing 300 jobs in the administrative and management branch? Why is the Minister not prepared to ask for a public review of the CN plan for cut-backs and reductions in order to live up to the kind of commitments made by his colleague back in June? I want an answer to why the Minister is picking on western Canada.


Mr. Speaker:: Perhaps the Hon. Member has put his question, and given the hour, I really do not think that argument is called for.


John Carnell Crosbie: Mr. Speaker, it is with great regret that the same economic conditions that apply to North American railways generally apply to CN as well. They apply to CP and they apply to every North American railway. All of them have been downsizing and have had to downsize their workforces. That is true of CN, and the administrative and management ranks are now too large in relation to the general body of employment and there has to be a reduction. It is not taking place just in the West. There is no discrimination. It is a painful matter but the railway has to slim down to survive, to do the job it has to do for the shippers and the people of Canada.


William Alexander (Bill) Blaikie: Supplementary.


Mr. Speaker:: I very much regret to advise that, given the hour, Question Period has ended.


James Kenneth (Jim) Jepson: Supplementary.


Mr. Speaker:: The Hon. Member for Winnipeg-Birds Hill is seeking the floor and I will take that into account tomorrow. The Hon. Member for London East is also seeking the floor. I might suggest to the Party Whips that I will take both of these Hon. Members into account tomorrow, but this concludes Question Period today.



BUSINESS OF THE HOUSE


Hon. Herb Gray (Windsor West):: Mr. Speaker, this being Thursday, I would like to ask the customary question of the
Deputy government House Leader about the business the Government intends to present to the House for the coming week.


Hon. Doug Lewis (Minister of State and Minister of State (Treasury Board)):: Mr. Speaker, we expect to conclude the Budget debate today and tomorrow. On Monday, we will resume debate, and there is a good chance that we will finish, on Bill C-109, the borrowing authority. On Tuesday and Wednesday, we expect to proceed with other government legislation after consultation with the other House Leaders. It is our intention to designate both Thursday and Friday as opposition days.
The House will note that the Prime Minister (Mr. Mul-roney) will be attending the NATO meetings in Brussels next week and therefore we will not be resuming debate on Bill C-72, the Official Languages Act, next week. However, I would confirm to the House that we will be calling Bill C-72 for resumption of debate at second reading on Monday, March 7,
1988.



PRIVILEGE


James Ross Fulton: Mr. Speaker, I rise on a question of privilege in regard to an answer given in the House a few moments ago by the Deputy Prime Minister (Mr. Mazankow-ski). I asked him a very important question regarding cuts to various programs for aboriginal people and steps being taken by the Government of Canada to block a very important matter that is before the United Nations Human Rights Commission today. The Deputy Prime Minister responded at the end of the question solely by saying that he would like Indian people to understand that the NDP voted against $29 million.
I believe that if you look at the "blues", Mr. Speaker, you will see that the Deputy Prime Minister knew that there was not a following question that I could take. He was putting a misleading-


Some Hon. Members:: Oh, oh!


Mr. Speaker:: First, I am sure it is accepted here that the Hon. Member was asking a serious question about a matter on which he and other Members of the House feel very strongly. I acknowledge that. However, I regret to advise the Hon. Member that his point is a continuation of debate and I am afraid that I cannot receive it.
February 25, 1988



POINT OF ORDER


Jack Wendele Shields: Mr. Speaker, my point of order has to do with Question Period yesterday and the remarks made by the Hon. Member for Yorkton-Melville (Mr. Nystrom) as reported on page 13078 of Hansard. I am sure the Hon. Member for Yorkton-Melville will want to withdraw his remarks accusing another Member of the House of lying.


Mr. Speaker:: I have not seen the Hansard report. However,
I think the remark referred to is probably that which I heard yesterday and which quite properly occasioned the Chair to rise and-


Mr. Rossi:: Who was the Member who was attacked? Was it the Prime Minister (Mr. Mulroney)?


John Napier Turner: Who did he accuse?


Mr. Speaker:: I think Hon. Members will recall, including my hon. friend who has been seeking the floor or at least taking the floor without recognition, that yesterday the Chair rose as a consequence of a remark that was heard and said that while I did not know which Member made it, I did not want any more of it. I do not know if there is any particular need to pursue this. However, the Hon. Member for Athabasca (Mr. Shields) has referred specifically to an Hon. Member and I will hear him.


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I think the Hon. Member is referring to the remark that appears in Hansard, "Lyin' Brian, lyin' Brian". I was not referring to anyone specifically, but-


Some Hon. Members:: Oh, oh!


Lorne Edmund Nystrom: In Question Period, there was some heckling, and the very gentle, docile Hon. Member for Athabasca (Mr. Shields) was heckling my Leader. I was trying to shield him a little bit and-


Mr. Speaker:: I accept absolutely the explanation of the Hon. Member for Yorkton-Melville (Mr. Nystrom), but I would ask him to withdraw the offensive word.


Lorne Edmund Nystrom: Mr. Speaker, I just got carried away and used an expression used in my riding so often, as I had just gotten back from there, but of course-


Mr. Speaker:: I would invite the Hon. Member, who has a certain ingenious side to his nature, to rise and say simply, "I withdraw", because that is what is required under the circumstances.


Lorne Edmund Nystrom: I certainly do, Mr. Speaker. I meant no offense to anyone.
The Budget-Mr. Langdon


Some Hon. Members:: Hear, hear!


Mr. Speaker:: Of course, I thank the Hon. Member for Y orkton-Melville.



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.
Steven W. Langdon: Mr. Speaker, in view of the number of interventions made at the start of my speech on points of order, I wondered if 1 could get an indication of how much time is left for me to complete my remarks.


Mr. Speaker:: My officials at the Table indicate there is at least five minutes and I would be pleased to hear the Hon. Member.


Steven W. Langdon: Mr. Speaker, my speech started at quarter to one. At least three or four minutes were taken up with the three interventions, if I recall, by one of the Conservative Members.


Mr. Speaker:: Perhaps I could make life easier for the Hon. Member and say that the Chair gives him 10 minutes.


Steven W. Langdon: Thank you very much, Mr. Speaker.
The points I stressed this morning dealt particularly with the failure of the Government to provide a sense of direction and purpose to the country in its industrial policy. I outlined a great many examples across the country, including my own constituency, of shut-downs and lay-offs which had left a great many Canadians in difficult circumstances. I provided some statistics that indicated last year in Ontario alone there were over 100 such shut-downs or significant reductions of staff amounting to well over 14,000 workers.
We are talking about a major pattern of decline throughout the manufacturing sector. It is deindustrialization, a serious weakening of the manufacturing base of our country. As I was saying just before the break, it is almost as if the Government set out to devastate the heart of manufacturing in this country. Unfortunately, there is absolutely nothing in this Budget which provides any sort of beacon of hope for the broad industrial sector in our country.
I say that a counter must be provided which indicates to the industrial manufacturing sector of this country that there is an

February 25, 1988
The Budget-Mr. Gagliano
alternative. I want to quickly lay out a number of points which we feel would give that sector a sense of direction for the future.
First, there has to be a separate ministry of industry. The present experiment of a Ministry of Regional Industrial Expansion, itself detached from the trade functions which have been seconded to external affairs, has been an abysmal failure. There has to be a separate ministry to close this gap and provide us with a sense of direction for the future.
Second, legislation has to be passed to permit communities and workers to review closures in their community. It should not be possible for a plant to simply shut down, pack its bags and head back to the U.S. with no explanation. There should be a careful, considered review with the possibility of buy-out provisions being available to workers in the plant affected in order to maintain a viable operation.
Third, there has to be adjustment legislation, especially for that vast range of workers who are no longer young, or who are not in the special categories of textiles and footwear and clothing which do have provisions for older workers. Such an adjustment procedure was promised by the Minister of Labour as far back as two years, yet nothing has been done through actual legislation.
There has to be as well support for serious research and development efforts in the industrial sector. In addition, our energy sector has to be used to provide a base of support for a viable, dynamic industrial sector. The energy sector cannot simply be seen as a pipeline to the U.S. to help their manufacturing sector increase its dynamism. Instead, we need to use our own base of support in the energy sector to help our own manufacturing enterprises.
We also need an industrial support program, which would be the industrial segment of the 1RDP. At this stage it is aimed mostly at regional development, which is important and significant, but we cannot ignore the fact that there is a tremendous need for modernization of our industrial complex in order to give it hope for the future of being competitive internationally.
We also need to take directions which give potential for Governments to work out planning agreements with some of the larger scale enterprises in this country through which those enterprises can make commitments to important new areas of economic activity, important new industries, which can become sources of exports, of dynamic expansion, and jobs in the future.
We also need sector trade plans, not this across-the-board trade deal which is going to so devastate the industrial sector, like the Auto Pact which has proved so successful and which should be replicated in areas like apparels and chemicals.
Finally, we need a made-in-Canada interest rate policy which keeps interest rates at a lower level than they presently are in order to encourage investment in the industrial sector.
We need a reborn Canada Development Corporation which would be able to help in the development of some of these new areas of activity that are so crucial to a competitive and dynamic Canada in the future. If we do this we can give direction to the industrial future of the country. That is what the country needs for its future jobs, its future exports, and its future as an independent nation.


Alfonso Gagliano: Mr. Speaker, I would like to take this opportunity to make my contribution to the debate on the Budget Speech, if we can call it a speech, considering the self-congratulatory exercise indulged in by the Minister of Finance (Mr. Wilson), during which he failed to announce a single program or plan reflecting a vision of Canada's future. At this point I would like to quote the Hon. Member for Laval-des-Rapides (Mr. Garneau), our financial critic, who said, and I quote:
The Minister of Finance is much more like an accountant trying to balance his budget than a manager of the Canadian economy with a vision of the future. Yet, the first responsibility of a government should be to govern the country and to prepare for the future; to ensure that our young people will have the education they need to face future difficulties; to guarantee that our workers have and will receive the training they need to adjust to their fast changing working environment; to ensure that our businesses have and will continue to have access to the financial services, the capital and the technology necessary to develop; and finally, to see to it that the poorest members of our society have and will continue to have enough money to live decently.
Mr. Speaker, my hon. colleague hit the right notes in his response to the Minister's speech, but unfortunately the Minister of Finance did not make a Budget Speech. His speech was about the Government's record.
"Bilan d'un echec" (A Statement of Failure) is the title of an article by Alain Dubuc that appeared in La Presse the day after the Budget, on February 11. Mr. Dubuc said, and I quote:
"Last night, Minister of Finance Michael Wilson brought down his fourth Budget. Let's hope it will be his last. On his fourth time around, he dashed any lingering hopes that his Government would be able to deliver the budgetary goods".
Mr. Speaker, those were not the words of the Leader of the Official Opposition (Mr. Turner) nor those of the Liberal Finance critic. This was not a political statement. This was said by a reporter with the newspaper La Presse, well known for his articles on economic affairs. He said he hoped this would be the Government's last Budget and that the Government had failed to deliver the budgetary goods.
Mr. Speaker, whichever way we look at the figures, it is obvious the Government has completely missed the boat.
First of all, as far as the deficit is concerned, Mr. Dubuc explains it all very clearly when he says:
The drop from 38 to 29 billion is largely due to a change in accounting methods. If the same definitions had been used under Liberals, the deficit would have dropped from 36 to 31 billion over the same period . . .
February 25, 1988

Mr. Speaker, if we add to that the $22 billion in tax increases the Minister of Finance has imposed on Canadians, today's deficit should be $14 billion. And if we consider the drop in interest rates, which has reduced the cost of servicing the national debt, the deficit would be lower still. However, our deficit is still around $30 billion. Mr. Speaker, after a period of economic growth, we have still failed to deal with our Budget problems. Nevertheless, in his Speech the Minister of Finance would have us believe that all is well and that we are on the right track.

If having close to $300 billion of national debt after six years of economic recovery is being on the right track, our kids should think seriously about what they must do with the Government, because we are definitely in a real mess and have a real problem. If we cannot reduce our deficit when our economy is good, how are we going to reduce it when we run into economic problems? The Minister of Finance (Mr. Wilson) did not address that problem. In his speech he proposed nothing new, he did not propose what the Canadian vision will be in the coming years.

However, Mr. Speaker, I would like to refer to and list- because Canadians should be reminded of this-all the tax increases imposed by this Government. And when we speak of $22 billion this is a fact, not rhetoric. Let me take a few minutes to illustrate.
First, indirect taxes-sales tax increases. From 9 to 10 per cent on October 10, 1984, Mr. Speaker, their first move. This cost $1 billion. Another increase in indirect taxes, the sales tax-from 10 to 11 per cent on January 1st, 1986. Another $1 billion, Mr. Speaker. And again, a sales tax increase from 11 to 12 per cent on April 1st, 1986. Another $1 billion, Mr. Speaker. Then the sales tax was extended to candies, soda pops, snacks and chips, on June 1st, 1985, another $400 million, and on July 1st, 1987, another $60 million, Mr. Speaker. A sales tax increase from 8 to 12 per cent on paint, wallpaper and toys on January 1st, 1988, another $60 million, Mr. Speaker. Excise tax increased on gas, 2 cents a litre, on September 3, 1985-total $900 million. One cent per litre on January 1st, 1987,-another $450 million. One cent per litre on February 19, 1987,-another $450 million. And of course we had the famous Budget on February 10, again one cent per litre, which will bring another $450 million into Government coffers, Mr. Speaker.
Sales tax equalization on leaded and unleaded fuel, April 1st, 1987-$30 million. Progressive tax increases on air travel, May 1st, 1986-another $55 million. Duties on spirit and tobacco, first increase on May 4, 1985-$340 million; second increase on February 27, 1986-$150 million; third increase on February 19, 1986-$70 million; and fourth increase on January 1st, 1988-$175 million, Mr. Speaker.
The Budget-Mr. Gagliano
There is also the 10 percent tax on long distance calls and cable TV. Imagine, Mr. Speaker, what that means for people in rural communities! They are losing there Post Offices, and in addition they now have to pay tax on long distance calls, when we know very well that in a city environment a long distance call often is essential. But now the Minister of Finance is taxing long distance calls, bringing into his coffers $945 million, Mr. Speaker. The sales tax transfer to wholesalers on July 1st, 1988, in that famous Budget we just had on February 10 will bring another $300 million.
Quietly, the Minister of Finance is proceeding to implement phase two of his tax reform, the value-added tax Canadians said they wanted no part of, and now, for the first time, the Minister of Finance, even though the consultation process is not complete, is transfering the sales tax to wholesalers, which will cost Canadians $300 million. Those tax increases do not include the new sales tax the Government intend to introduce after the next elections.
Mr. Speaker, we should not forget either the Government tried to introduce a tax on food. Thanks to the Opposition who during the summer organized demonstrations and petitions, this Governement backed down, and now it is saying it will be looking at that. It is not done yet, but when he introduced his fiscal reform, the first phase, the Minister of Finance promised in the House that there would not be tax on food.
Mr. Speaker, there are also direct taxes. The deindexing of family allowances, personal exemptions and tax brackets as of January 1st, 1986: $635 million. Cancellation of tax rebate, January 1st, 1986: $650 million. Cancellation of Registered Home-ownership Savings Plan, May 22nd, 1985: $105 million. Temporary surtaxes of 5 and 10 per cent for high income earners, July 1st, 1985 to December 31 st, 1986: $500 millions. General and permanent surtax of 3 per cent for all taxpayers, July 1st, 1986: $1.2 billion. Changes in the way dividends are treated, January 1st, 1986: $300 million. Changes in exemptions for married individuals: $20 millions. We could go on and on.
I just wanted to show how, in three and a half years, this Government has been able to extract $22 billion in taxes while it is bragging about reducing the deficit. After collecting $22 billion in taxes it is still carrying a $30 billion deficit, even though it also benefitted from lower interest rates and, consequently, lower servicing charges for the national debt.
The Budget of February 10 will mark the day in history that the Conservative Government gave up any pretense of trying to close the increasing gap between the rich and the poor in this country. The Mulroney administration cheers so loudly for the few who have prosperity in our society that it is unable to hear the shouts of the many who have not shared in the nation's economic recovery.

February 25, 1988
The Budget-Mr. Gagliano
The Government has turned its back on our youth, our aged, our homeless, our poor and on regional economic disparities. How can the Government be proud of a Budget that refuses to place even a minimum tax on the 60,000 profitable corporations in Canada and at the same time imposes new and increasing taxes which will take over $2 billion out of the pockets of Canadian taxpayers?
Since the Conservatives were elected in 1984, individual Canadians have been forced to pay an additional $22 billion in new taxes. Corporations, by contrast, have only paid $2.6 billion in new taxes. The Budget of February 10 is an economic blueprint for a two-Canada concept of government. It is a blueprint of a Canada for the privileged few who prosper while the rest of the nation are ignored in the corridors of Conservative power.
The Liberal Party believes that Canada is a generous nation and that Canadians of every income group will reject the cynical blueprint for our country.

Madam Speaker, after the Budget and the deficit, I would like, now, to talk about small businesses.
What has this Government done in the last three and a half years to assist that dynamic sector which is the mainspring of our economy? Only one thing, Madam Speaker. The only thing this Conservative government has done for small businesses is to amend the Small Businesses Loans Act in order to make it less accessible to those who really need it, Canadians starting their own business.
Madam Speaker, we had a Small Businesses Loans Act which allowed Canadians wishing to start a business and unafraid of risks to get from our financial institutions a loan totally guaranteed by the Government and to create much needed jobs in our country and our economy.
So, to make sure that all those young people . .. anybody who didn't have the necessary capital to start a business could still get a government guaranteed loan and avoid problems with collateral and guarantees required by the banks.
Madam Speaker, this government's first gesture was to reduce that guarantee to 85 per cent and now people trying to start a business and needing capital must have 15 per cent collateral above what is given, the 20 per cent cash they need to buy equipment, capital assets and other tools required to operate their business.
Madam Speaker, for years we stressed the possibility of a one-stop service for small businesses, so as to group in a single place all informations and programs pertaining to the various levels, municipal, provincial, federal, national, local, and so on, a place where one could inquire and receive the appropriate informations.
A previous Liberal Government had already put forward a project to that effect. Canadians, however, as they were entitled, chose to elect a new Government in September 1984,
and this Conservative Governement launched a consultation process at the beginning of 1985, to find out what the needs of small businesses were in that area. Consultations have now been completed, not without a cost, I am sure, but after three and a half years we are still waiting for specific measures to help the development of small businesses.
There is no program whatsoever regarding such a one-stop service. No financing system that would bring more funds to an area so vital and, yet, so fragile.
Everybody agrees that what small businesses lack the most is precisely good financing sources. Thus, it is important that the federal Government support programs that would help businesses find the necessary start-up funds.
It is useful to recall every now and then that small businesses have created 80 per cent of the jobs in Canada. However, if the small businesses sector were more active, more aggressive, we would have had even more jobs created and, consequently, unemployment would be lower and we would have a far more dynamic economy.
But once again, this government by advocating its philosophy of laissez faire, allows big corporations to grow while small businesses are getting smaller without any aid or relief program.
Madam Speaker, for example, this Governnment after three years and a half has not introduced any consultation program, any program for trading firms to enable small businesses to market their products and services. On the contrary, with respect to tax reform which has now become a law of the land since December last, the Minister of Finance completely ignored the needs of small businesses. We know quite well that 75 per cent of the manufacturing sector in Canada is made up of small businesses.
Madam Speaker, the only sector whose tax rates have been increased under tax reform is precisely that of the small business. Indeed, at present small manufacturing businesses pay 10 per cent of income tax. When the tax reform is implemented, small manufacturing companies will pay 12 per cent, that is 2 per cent more. It is ridiculous and incredible, Madam Speaker, to do that to a dynamic sector which creates 80 per cent of all jobs. And yet the Minister of Finance, who thinks that he has solved all problems in Canada, has never replied to the questions and has never justified why income tax rates in any other sector have not been increased under the tax reform. However, the tax rates of small manufacturing businesses are increased by 2 per cent and the Minister of Finance has been unwilling to justify that increase. There is not a single Canadian, Madam Speaker, who can justify such an increase.
This is not all. It is quite fine, Madam Speaker, for the Government to speak of free trade with the United States. The other day I met a businessman who told me: "Of course, it is
February 25, 1988

quite well for you to say that we will sell our products and services to the United States. At the same time, the Minister of Finance under his tax reform is reducing representation allowances by 20 per cent. Flow do you want me to be represented?" I told him: "Are you going to sell a car or an airplane over there and 20 per cent of those expenditures will not be deductible?" Are small businesses encouraged? Are they encouraged to sell in the United States? Or is it just mere rethoric? The down-to-earth people, Madam Speaker, must always foot the bill, always work harder and harder to pay for some follies of this Government.
We only have to look at the statistics on small businesses' exportations that indicate that 4 percent. . . Madam Speaker, you are telling me that my time is up. I am just about finished. As a matter of fact, I wanted to point out that important matter. Four percent of Canadian exports are made directly by small businesses. That is a very small percentage. Suppose the government would announce some export financing program or a scheme that could really enable our ambassies abroad to help out our small businesses. And suppose that such a program would encourage specialized trading firms abroad to pool products and services offered by small businesses, we could improve significantly that percentage of exports and thus create more employment and make Canada more prosperous.


Mr. Prud'homme:: Madam Speaker, first I would like to thank my colleague for his excellent account of the economic performance of this country. As everybody knows, the Flon. Member for Saint-Leonard-Anjou has always been interested in these economic matters since his election. Everybody also knows that he is our main spokesperson for small and mediumsized businesses.
But there is another aspect I would like him to explain to us. He is also responsible for postal matters in Canada. He is our main critic for the whole issue of postal services in Canada. I would like to mention also the statement made in this House by the Hon. Member for Laval-des-Rapides (Mr. Garneau). I would like our hon. colleagues to read them carefully and the people to be fully acquainted with the statements made by the Hon. Member for Laval-des-Rapides and by the Leader of the Official Opposition (Mr. Turner) and by the Hon. Member who just spoke.
I have listened carefully, since we all specialize in one or the other of these matters and I will not pretend to be an expert in all of them which appear more or less complex to different Members. But the only way to understand fully is to listen carefully. Even after 20 or 25 years one can still learn a lot by listening well. As for me, I have learned many things from my colleagues, and I cannot recommend too strongly to those who are watching us to read the speeches made by the Hon. Member. But more specifically I would ask him if he would be so kind as to make a comment. 1 realize the situation is desastrous, it is bad in some respects for the economy. Those who spoke before him have shown how bad it is. In the riding I
The Budget-Mr. Gagliano
represent, for example, new areas are being developed. I thought this is what the Minister of Finance wanted to do, to promote development and construction. Yet in the riding I have the honour to represent there is a whole area called Bois-de-Boulogne, with fantastic houses, where people were encouraged to go and live. They were encouraged to build housing developments, fantastic ones. I do invite my colleagues, including my honourable friend who is listening to me, the Hon. Member for Hochelaga-Maisonneuve (Mr. Desrosi-ers), to come and pay us a friendly visit as I do in his riding.
One of the major frustrations in this new sector which has been built within an older residential area is the disparity in services between neighbours. Houses in one sector still receive proper service from Canada Post, and after being encouraged to build, residents of the new sector expected the same services as other Canadian citizens. However, a whole sector in my region, which is now completed or near completion, has been denied a basic service to which we are all used in Canada, namely door-to-door mail delivery, and instead, Canada Post has installed ugly green boxes which are totally out of character in these new residential areas and completely unaesthetic. These boxes are totally unsuitable to the architecture of the houses and the residents are furious and frustrated. It is often because of these small daily irritants that taxpayers complain about Government services.
I would like the Hon. Member to take a minute or two to outline briefly what is happening and what should be done.


Alfonso Gagliano: Madam Speaker, I wish to thank my colleague for his kind comments and for his question which is directly related to the Budget. We should not forget that it was the Minister of Finance himself who caused the problems with the super-boxes which my colleague for Saint-Denis (Mr. Prud'homme) has mentioned. Indeed, the Minister of Finance decided to make cutbacks and said that the postal deficit would be reduced to zero by March 31, 1988 and that Canada Post would have to see to it. On the other hand, the Canada Post Corporation said: Fine, since we have to reduce our costs, we shall reduce our services. What has happened is quite clear. Of course, we have had these green boxes for years, but they were only used temporarily. Residents of uncompleted residential projects were given the possibility of picking up their mail at temporary green boxes instead of going to the Post Office, which allowed them to receive their mail near their home. However, after all the houses and all the streets had been built, door-to-door mail delivery was provided, as for all other Canadians living in rural areas. The postal service was universal.
Now, because of the decision of the Minister of Finance and the five-year plan of the Canada Post Corporation, we have two categories of Canadians, some who have home delivery and others who have to get their mail from a superbox which, as we have seen on television, is easy to open and does not close properly and which, because of our climate, is often blocked by snow during the winter.

February 25, 1988
Adjournment Debate
Madam Speaker, this is another example of how this Government reduces services and increases taxes. Yet, the deficit still remains the same.
I will give an example. In the United States, it took fourteen years to the postal service before it could balance its books. Here, in Canada, with only one tenth of the population, we want to balance the books in seven years. It is nonsense! And the Minister of Finance (Mr. Wilson) himself went against the recommendations of the Marchment commission which wanted to give Canada Post another five years to do some planning in order to avoid unnecessary cuts while continuing to give a fair service to all Canadians. This way the Corporation could plan its expenditures and its income, and would be able to balance its books within five years. But he decided to proceed with cuts immediately, against the recommendation of a commission which was established by this very Government. And today we are in a situation of confrontation. Only a few days ago, we received the first report of an independent commission of inquiry according to which 20 per cent of mail deliveries are late ever since Canada Post implemented the cuts, because it could not make both ends meet.


Mr. Tardif:: Madam Speaker, first I should like to congratulate my colleague for his remarkable speech, and since he did refer to the postal issue I have a question for him. Day in and day out over the last few months my mail box has been full of letters, particularly from farm producers who keep complaining about delays of five, six, seven and eight days in mail deliveries. On a few occasions I too had to put up with totally unqualifiable delays in the delivery of such important documents as passports. Be that as it may, Canada Post has made drastic-or even cruel and savage- cut-backs, but did such savings in fact lead to improved services? Fully cognizant as my colleague is with the postal service, can he tell us whether the savings made at the expense of Canadian users contributed to bettering the service, which can still be described as being totally lamentable?
the result that 20 per cent of mail deliveries are late, Madam Speaker.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
[ Translation]

The Acting Speaker (Mrs. Champagne):: 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 Vancouver East (Mrs. Mitchell)-Health-Use of Depo-Provera for contraceptive purposes/Request that report be made available to concerned women; the Hon. Member for Cochrane-Superior (Mr. Penner)-Native peoples-Geneva resolutions on treatment of indigenous peoples/Request that officials be instructed to support resolutions; the Hon. Member for Papineau (Mr. Ouellet)-Official languages-The promotion of bilingualism and linguistic minorities-Role of Government/Commitment of Conservative candidates concerning bilingualism-Prime Minister's position.
Resuming debate. The Hon. Minister of State for Forestry and Mines.



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.
Alfonso Gagliano: Madam Speaker, new battle lines have been drawn as a result of the position taken by the Minister of Finance with respect to the savings made by Canada Post. We must keep in mind the fact that when Post Canada was established it was given three very specific and equally important mandates: cut the deficit, provide better service, and improve labour relations. So when Canada Post management unveiled their five-year plan in which they projected 8,000 fewer jobs, the employees and unions involved got down to work and stated that the plan was unacceptable. That is when confrontation became the order of the day, so much so that any postal worker who now fails to punch in or out at noontime gets himself a three-day suspension without pay. No private sector company cracks down that hard. So that is the kind of situation we have now, and unfortunately the service has completely bogged down and, as we have heard recently, with


Hon.   Gerald. S. Merrithew@Minister of State (Forestry and Mines: I am delighted today to take part in this debate on the Budget brought down by my colleague, the Minister of Finance (Mr. Wilson), on February 10.
If I may, I wish to take a few moments to mention some of the positive achievements that have been accomplished during the time that he has been the Minister of Finance in this Government.
Surely the two most important areas that the Government has succeeded in, where the previous Government failed and failed miserably, have been the lowering of both interest and unemployment rates. In fact, Canada is ranked number one among major industrialized countries in economic growth and job creation. Indeed, more than 1.1 million new jobs have been created in Canada. Of course, 85 per cent of those jobs are
February 25, 1988

full-time. At least half are managerial and professional occupations of a permanent nature.
Interest rates have come way down. In fact, mortgage rates are 3 per cent lower, saving home owners $1,200 a year on a $50,000 mortgage amortized over 25 years. That is money in the householder's pocket. Housing starts have reached a 10-year high. Consumer and investor spending has increased. All of a sudden Canadians have found a new confidence in the Government.

Our Government has restored their confidence.

This record of achievement did not happen by itself. Quite the contrary, this economic reformation was carefully planned and executed, as is clearly spelled out in the Government's agenda for economic renewal which we presented in the House immediately after being elected in November, 1984.
In speaking of the successes that we have nurtured over the past four years, I wish to point out the backbone of our approach which has been responsible for the regeneration of the economy. First, our policy orientations are right on. Fiscal responsibility, tax reform, enhanced trading relationships, regional development, increased equality for women, francophone and minority groups, and regulatory reform have all formed the bulwark of our plan for this nation. They are working not only because they are well planned and executed, but because we are consulting and have consulted with Canadians on the programs that they would like to see. We are listening and we are acting, and our programs and policies are clearly successful.
Within the context we are also committed to fiscal responsibility. Gone are the days when the Government could want only throw away taxpayers' dollars, heaping more dollars on projects which were not proper projects in the first place. The controls in place and the process for justifying government programs are very strict. Few Governments around the world have accorded the same integrity to public expenditures as we have.
Next, we are committed to doing things in priority. Obviously, certain areas take precedence over others. We have priorized the issues which are of greatest concern to Canadians and have and are devoting special attention to those areas. For example, regional development, research and development, and trade enhancement are only a few.
Finally, the Government has a vision for the future, one where all Canadians will reap the benefit of their labours and where the standard of living will be high and all citizens will be proud once again to call themselves Canadian.
I wish to expand on some of the areas I have touched upon and which form part of our over-all plan.
It is absolutely essential, if this country is to recover, that we revitalize the private sector and position Canada's economy to
The Budget-Mr. Merrithew
meet the challenge of international competition in the 1990s. The key behind this has been the modernization of the regulatory environment for business. We have deregulated energy, the transportation sectors, opened up the financial markets to global opportunities, and stimulated greater competition in financial services. We are updating the outdated legislation for competition policy, copyrights, and patents. We have not stopped there. One of the highest priorities has been to privatize some of our Crown corporations which no longer have any reason to be government controlled.
I invite the Opposition to have a look at the success of those privatizations since we have taken that action.
Tax reform is another major initiative of the Government. It will come into effect in stages over the next year. As early as this summer it will mean less taxes being paid by the average Canadian, and a fairer distribution of the tax burden across the country.
Indeed the federal income tax system has been formed to help both businesses and individuals compete in the world. Hand in hand with this new approach to a fairer taxation system is the major effort to control government spending. Nothing is more basic to a strong framework for private sector growth and job creation than responsible management of government finances.
In 1984 the federal deficit and the national debt were almost out of control. In the mid-1970s a former Auditor General said that the Government lost control of the public purse-strings. Indeed spending was out of control. Not so with our Government.
Our first priority was to get government spending under control. Through team effort and under the leadership of the Minister of Finance we have been able to do so to a certain extent. The deficit has been systematically reduced. For the current fiscal year we will meet our previously announced target of $29.3 billion. We must remember that in 1984 the deficit was better than $37 billion and rising. In continuing our attack on the deficit, we have not lost sight of the day when the Budget can be balanced.
Another major area of government effort has been to enhance our trade opportunities abroad, with all countries around the world. However, since we have a natural, historic trading relationship with our largest partner, the United States, we have pursued a special arrangement to open up access to that great market-place to the south. We have succeeded in negotiating a comprehensive free trade agreement with our American neighbours, which I think will lead to a more efficient economy, better able to compete in the international market-place. More jobs will be created as Canadians realize the immense benefits and opportunities which are now available through our trading savvy south of the border. We estimate that there will be a net increase of at least 120,000 new jobs in 1993.

February 25, 1988
The Budget-Mr. Merrithew
1 want to speak for a moment, if I may, of those things in the Budget which relate to the forestry and mines portfolio that comes under my responsibility. The Government has a good relationship with both the forestry and mining industries and communities. After consultations with the mining industries it was decided to widen the definition of a mineral resource to include kaolin under the Income Tax Act. This will allow the mineral to receive the favourable tax treatment which the federal Government provides to the mineral industry.
Since interest in kaolin deposits has been shown in the West, this will be a further boost to regional development in that region, providing they take advantage of the new regulatory regime.
Another positive note for the forestry and mining industries is that with the necessary increase of one cent per litre in the excise tax on gasoline, primary resource producers as well as farmers and fishermen can continue to collect the fuel tax rebate, ensuring that they are not affected by the increase. Additionally there was no increase in tax on diesel fuel. The Minister of Finance has clearly recognized the importance of maintaining cost competitiveness of Canadian minerals and forest products in export markets by not increasing the excise tax on diesel fuel for transportation.
There are two other measures which I will mention. The Budget reaffirmed the need for special assistance for certain users of energy consumption equipment, including primary producers, through the mechanism of the capital cost allowance. This incentive for investment will continue to provide assistance to the forest and mining sectors.
The national labour sponsored venture capital corporations provision is another part of the Budget. First introduced on May 23, 1985, the Budget adds a new measure which allows individuals a federal tax credit of 20 per cent of the cost of shares acquired in 1988 and subsequently. The maximum individual federal tax credit remains at $700 per annum. This should provide a significant source of new equity capital for small and medium-sized businesses in the forest sector by giving workers an opportunity to invest in and benefit from the profitability of their own companies.
One issue in which I have been interested as a Maritimer is regional development. As a Minister and a Member of Parliament from New Brunswick, I want to deal with that particular issue for just a few moments.

I turn now to regional development. This is an important matter to me as a Minister and a Member from New Brunswick.
Our Government has shown and will continue to show it is committed to the Atlantic region.
f English]
The Government has demonstrated and will continue to demonstrate its special attention to programs for the region in which I live in Atlantic Canada. Of course we recognize that the programs and policies of the previous federal Government were not working and that unemployment rates were unbelievably and cruelly high in the Atlantic region. The Government has embarked upon a new course, a clear departure from the laissez-faire attitude of the previous Government.
We have created the Atlantic Canada Opportunities Agency which has unprecedented powers to nurture and assist development in the region. This did not come out of thin air. We on this side of the House listened to and consulted with Atlantic Canadians. They told us that they wanted a new approach, one that would work, would be based in the region, and would have a sensitivity toward Atlantic Canadian problems and aspirations. This did not escape us. We have created ACOA to provide this focus for development in the region and this window for the federal Government to contribute marginally to prosperity in Atlantic Canada.
It is important to note that it is the Prime Minister (Mr. Mulroney) who has taken the lead role in providing stronger commitment to and clear vision of the needs of Atlantic Canadians. Test we forget what has happened to date on that particular issue, I was just given the figures today of expenditures under ACOA in three categories in the region covering the four provinces. To date, under the Atlantic Enterprise Program, IRDP, and ERDA, we have approved 558 applications and authorized ACOA contributions of some $76,497,000.
What has this brought about? It has brought about an estimated total project cost-that means new capital investments in our region-of $229 million in Atlantic Canada. We think that is fairly important and fairly significant.
Created in June of last year and carefully designed, with legislation currently moving through the House, ACOA is moving on all fronts to approve projects which will benefit the region. The actions of the Government have meant jobs in Atlantic Canada.
Earlier this week the Hon. Member for Humber-Port au Port-St. Barbe (Mr. Tobin) tried to say, unbelievably, that employment rates in eight provinces are higher today than they were at the height of the recession. The truth of the matter is that eight provinces have lower unemployment rates than in December, 1982 when the Canadian unemployment rate was at its highest. When unemployment began to decline somewhat in 1983 in Ontario and Quebec, the rate in Atlantic Canada and the West continued to rise. For example, the unemployment rate in Newfoundland, Saskatchewan, and Alberta reached its highest point, not in December, 1982, the depths of the recession, but in September, 1984. The highest rate in my province, the Province of New Brunswick, was in January, 1985.
February 25, 1988

In Atlantic Canada the unemployment rate did not begin to recover until after the 1984 election. It took a Progressive Conservative Government to reverse the negative trend of unemployment in Atlantic Canada, which had been the trademark of the previous Government. All provinces across Canada, except P.E.I., now have lower unemployment rates than in September, 1984.
May I just take a moment to deal with the statements of Hon. Members of the New Democratic Party opposite, while calling upon the Government for more regional development, the Hon. Member for Oshawa (Mr. Broadbent) has made his priorities clear. He said:
Top priorities would be to keep the economy running well in central Canada,
where the continental mechanism has been very effective.
In fact, the NDP Member for Ottawa Centre (Mr. Cassidy) went a step further by asserting, incredibly, that part of the new Navy frigate contract which was recently awarded to the Saint John shipyard in my riding, fair and square to the lowest tenderer, should be split off to Quebec. This is the same Party that argued in the past for procurement contracts to go to the lowest bidder. Now the NDP argues just the opposite, thereby stirring up regional divisions and questions as to the NDPs credibility on these important matters. The people in Saint John and in Atlantic Canada have noted those comments.
In closing, I want to say that this Budget is just part and parcel of the Government's continuing commitment to a prosperous Canada, and a prosperous Atlantic Canada I am proud to say. The next year will be the sixth year of sustained economic expansion in Canada. That, in itself, is unique. It will see the implementation of a number of our priority programs for child care, regional development, science and technology and national defence. We will continue our commitment to the agriculture, energy, fishing, mining and forestry sectors. We will fulfil our commitment to a stronger and more compassionate Canada.
This Budget helps to make this commitment possible. It does it in a careful and responsible way. It proves once again what we have said from the beginning. We have a plan and we have stuck to that plan. That plan is working, it is creating jobs and new opportunities in the area of Canada from which I come. We are cutting the deficit and implementing important policies for all regions of Canada.
I am proud and pleased to speak in support of the Budget brought down by our Minister of Finance on February 10, 1988, because it is one more step in making Canada a better and more prosperous place in which to live, to work and to raise a family.


David Orlikow: Madam Speaker, I would like to direct a question to the Hon. Member who is so proud and satisfied with the Budget presented by this Government. Is he aware that according to the estimate of the Canadian Council for Social Development-an organization which has as members
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virtually every federal and provincial Department working in the field of welfare and health and most of the major private voluntary organizations-between 1980 and this year, that is, during three and a half years of Conservative Government, more than 100,000 people have joined the one more 1.5 million who are living in poverty?
Is the Minister proud of a tax system which permits thousands of Canadians with incomes of more than $50,000 a year to pay no tax, that more than 250 Canadians with incomes of over $200,000 a year pay no tax while the people he represents, ordinary Canadians, are taxed as heavily as they are? We still have a large number of corporations, some of the biggest and most profitable, which have paid no taxes. Let me list just a few. Alcan Aluminum in 1986, Xerox Canada in 1986, Union Carbide of Canada in 1987 and Bramalea Consolidated. I do not have the figures here, but virtually all the banks in this country paid little or no tax in recent years. Is the Minister happy with that kind of a Budget?


Mr. Merrithew:: Madam Speaker, I think what is important to note and perhaps what the Hon. Member has missed in this whole debate is the fact that there are 1,150,000 Canadians working who were not working previously and who are earning a living, creating wealth, making public purchases and supporting the Canadian economy. The average wages are significantly up in the part of Canada from which I come. That is very important. We have more Canadians actually working and contributing to a more prosperous Canada.
The Hon. Member mentioned companies and corporations which are not paying taxes. He knows, for example, that our Minister of Finance brought in a very ambitious tax reform package which has been and will be debated in this House undoubtedly over the ensuing weeks and months. The Member mentioned one company, a mining company. Is he against companies which have made no income at all through the recession? I am talking about pulp and paper and mining companies that create wealth and jobs. Does the Member now suggest that those companies should not have the benefit of the exemptions which they earned during those very poor years when they made investments and earned exemptions from paying taxes? That is very important and it is very important to the part of the country from which the Hon. Member for Winnipeg North (Mr. Orlikow) comes. It is extremely important to the hinterland regions of our country where mining, forestry and many other basic resource industries are located.
The Hon. Member should also be reminded that the Minister of Finance has dealt very effectively, I believe, with certain segments of the Canadian economy which previously, we felt, were not carrying their fair share of the tax burden for Canada, not paying their way and will now have to do so, such as our insurance and banking communities.


James (Jim) Stewart Edwards: Madam Speaker, I appreciate the Minister's intervention in this debate and the solid contribution that he is

February 25, 1988
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making to public life in our country. I can assure him that his efforts are not unsung in my part of Canada.
I have a particular question relating to the Minister's remarks having to do with collaboration in mining matters with the provinces. As the Minister knows, there was the proposal that Alberta, which is alone among Canadian provinces not enjoying a minerals development agreement with the Government of Canada, should have taken the initiative to seek such an agreement. It is my understanding that the Government of Alberta has taken that initiative and that negotiations leading in the direction of such an agreement are now in their third round.
In light of the budget proposals and the Minister's responsibility as Minister of State for Forestry and Mines (Mr. Merrithew) could he tell us whether the minerals development agreement with Alberta is near completion or whether indeed the proposals of the Alberta Chamber of Resources in that direction have been helpful in the finalization of negotiations?


Gerald Stairs Merrithew: Madam Speaker, I very much appreciate the Hon. Member's interest. I think earlier in the House today he made an intervention in support of an MDA for the Province of Alberta.
When we decide to enter into economic and regional development subagreements with provinces, sometimes there is a built-in inequity or an appearance of an inequity. These regional development agreements tend to be based somewhat on the ability of provinces to finance those kinds of activities on their own.
In the case of Alberta, I fully realize and appreciate, as the Hon. Member who has been pushing very hard on this issue that Alberta is the sole province which does not have a mineral development agreement. I have met with representatives of the Alberta Chamber of Resources who have pushed very hard on the issue. We have had negotiations and discussions with the province. Alberta is very aggressive on many fronts. For example, in forestry it will have well over SI billion in new investments this year. The lead which the Province of Alberta has shown in that field is remarkable, but the province will have to indicate to us in a whole plethora of requests for assistance where the mineral development agreement stands. Is it as important as assistance, for example, in the forest products industry? Is it as important as assistance in the energy industry or in agriculture? They have to priorize this.
I personally am fully supportive of entering into negotiations with them and I will do so after the ERDA agreements and discussions that will take place with the Minister responsible for intergovernmental affairs, the Minister of Regional Industrial Expansion (Mr. de Cotret) and the Premier, discussions that will take place shortly, I understand.


Ms. Lynn McDonald (Broadview-Greenwood):: Madam Speaker, in rising to address this year's Budget, I want to
begin by looking very briefly at the history of Conservative budget-making in these last number of years. We are now into the fourth year of Conservative Government.
The Government's first economic declaration was a real slasher. Conservatives basically said: "Move over, Margaret Thatcher, we want to show you that we have real Conservatives in Canada, we will have a really tough Conservative Budget". There was slashing of expenditures. There was the slashing of the indexing of family allowances and old age pensions. There were big budget cuts in the environment, whole programs just slaughtered, to show the folks out there that they were really serious as Conservatives about being tough on the Budget.
Arts expenditures were cut, again in spite of absolutely clear promises to the contrary, as promises were made on the sacred trust to the social programs. Arts expenditures were very seriously cut, one of the first casualties of the new slashing Conservative approach to budget-making back in the fall of 1984.
What has happened? Canadians did not like what Conservative Members did. Old age pensioners stood up and fought back. Canadian women who were going to lose the family allowance indexing fought back, unfortunately not as successfully as old age pensioners. Old age pensioners were successful in insisting that indexing not be cut for the old age pension.
Arts groups marched on Ottawa and said: "You had better keep to those promises, we are an important part of Canadian society and we do not want to see expenditures in our area cut". Environmentalists spoke up and insisted that programs for the protection of the environment were a high priority for Canadians. They were right.
This first attack on Budgets was back in the fall of 1984 and the Government had to learn that it would not work, that Canadians really did object. Canadians were not ardent followers of Margaret Thatcher nor were they ardent followers of Ronald Reagan. The Conservative Government preferred these two models of increased expenditures on law and order defence and the military, and cuts in social areas, arts and environmental programs. Conservatives learned that this was not acceptable to Canadians, and I am glad to see that they learned a bit of a lesson.
Instead of these massive slashes, subsequent Budgets have provided for more careful trimmings. Indeed, Conservatives have poured on the fertilizer in other areas. In some areas, there has even been growth.
Here we have the curiosity of a Government that talks about slashing and reducing the deficit, while in fact expenditures are going up. They are going up at a greater rate than economic growth, rising faster than inflation. In short, there have been real increases in expenditures in Canada.
For the first year in our history, there are expenditures in the federal Budget of over $100 billion. For statutory programs, the increases are in the order of 4.6 per cent, for non-
February 25, 1988

statutory programs, there are increases of 3.9 per cent, for total program spending, there are increases of 4.3 per cent, and of course, the expenditures to pay the service charges on the public debt amount to 9.7 per cent, a massive increase. The total budget increase for this year is 5.5 per cent. With inflation at around 4 per cent, we can see that that is a real increase.
The irony is that the Government is talking about reducing the deficit. What are government Members talking about? They are talking about comparing the deficit in the worst of the Trudeau years, the time of a recession, a time when we would expect the deficit to rise if there were to be any humanity at all, a time when the deficit would have to go up or there would have been even more massive suffering than there was, with the deficit now when employment has risen a bit. In comparison with the worst of the Trudeau years, they say that we are reducing the deficit.
In fact, every year the public debt is rising, and it is rising by very substantial figures, around $30 billion a year. We are into the fourth year of a deficit in the order of $30 billion. Of course, the debt charges are rising year after year and yet the Government uses rhetoric about reductions.
Looking at the fine print, we find that there is a reduction in the rate of the increase, not a real reduction in the growth of expenditures. We have to moderate the growth of expenditures, not reduce expenditures altogether. They are still rising. Let us be very clear. We have heard some rhetoric, but the reality is rather different.
The Government is promising tax reform, but what in fact has it actually been doing? It has been increasing taxes for middle and lower income Canadians. There have been massive tax increases in each of the years we have had a Conservative Government. Why is this? For one thing, there are still tax giveaways for better off Canadians. There are still massive loopholes. There are still some 60,000 profitable corporations that are not paying taxes. The Government is still resisting all the recommendations made by my Party and by many Canadians to apply at least a minimum corporate income tax in order to ensure that profitable corporations pay their fair share of taxes. That has not happened.
Corporate income taxes do not bring a very substantial part of the money into the federal Treasury. Projections for this year put personal income tax at $45,410 million and corporate income taxes at only around $12 billion. Unemployment insurance contributions are nearly as high at $10.6 billion. Sales and excise taxes are actually very substantial at $28,855 million. Sales and excise taxes paid by Canadians for this fiscal year are much higher than corporate income taxes. This is of course a very convenient way for the Government to be collecting taxes, but it is not a fair way.
Sales and excise taxes are largely hidden taxes and they are regressive taxes. They are not related to ability to pay, which income tax is. Income tax is progressive, but sales and excise taxes are not. Of course, with the trade deal, there will be a
The Budget-Ms. McDonald
reduction in excise taxes, so again taxes elsewhere will have to go up. There will be some kind of sales tax, but the Government is holding off from telling us exactly what it wants to collect in sales taxes. All we know, or at least we hope we know, is that food will not be included. A whole lot of other items will be.
There are massive increases there because the Government will not come to terms with collecting taxes fairly from people who can afford to pay them. Again, we hear rhetoric about tax reform, but let us be very, very clear about what tax reform actually means. The Government wants to reduce the tax rate. The Government wants to follow in the footsteps of Margaret Thatcher and Ronald Reagan.
There were reductions in the income tax rate, particularly for the wealthy in Britain and in the United States. They were following the trickle-down theory which is that with these kinds of reductions, wealthy people would invest more and jobs would be created. In fact, they have not found that the trickle down theory has actually produced those kinds of jobs. It certainly has not produced justice, equity or harmony in those societies. But that is still the model we have from the Conservative Government.
We have this talk about tax reform but it is just a reduction in the rate. The Government says it still has to collect the same amount of money, but instead of doing it in a fair way through the income tax system which is related to ability to pay, it is going to be collected in an unfair way through hidden taxes, sales taxes, regressive taxes which hit middle and low-income people worse than they hit those with a better ability to pay. The Government talks about a revenue-neutral kind of tax reform. We have to collect the same amount of revenue but we are going to do it in a different way. Is it fair? No, it is not. Tax reform sounds good, it promises reform, but these are in fact regressive measures.
We have a certain amount of ideology in the Budget Papers which the Government has come up with. We have The Fiscal Plan and when you read the fine print there is a lot of reference to percentages. There is also a lot of reference to relating expenditures to the size of the economy, as if government expenditures ought to be a certain proportion of the Gross Domestic Product. This reflects the Conservative ideology that there is a kind of right amount of government, but not too much, we had to have enough to pay for certain social programs, yes, but more than that we do not want. There is some kind of mumbo-jumbo or magic Figure which is the right amount but not too much. This is the ideology. It is not very practical because it obviously depends upon what the money is being spent for. Is it productive? Is it going to improve the capacity of Canadians to create jobs, to use our wealth wisely? Is it going to promote health, education, research and technological development? Yet those are not the kinds of questions being asked. The question asked is simply whether it is being spent by the public sector or the private sector.

February 25, 1988
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If the private sector puts thalidomide on the market, that is not economic growth. That is disaster. Yet the Government takes this very narrow approach that what the private sector does must be positive for the economy. Yet if the public sector does something to get rid of pollution or promote public health, somehow that is bad because it is being done by the public sector. This kind of ideological blindness on the part of the Government is extremely unfortunate.
I also want to refer to what is not in the Budget. We have a discussion of expenditures projected for the fiscal year and the income the Government expects to get during that fiscal year. To some extent it is related to unemployment or projected employment and economic growth, interest rates, and a few other economic indicators. Yet most of it is just the money coming in and going out of the Government's hands over the year. It is not related to, you might say, the productive capacity of Canadians, the physical plant, the environment, the forests, the soil, the waters, the fisheries or our farmland. We do not have any kind of accounting of that sort. Yet that is the kind of information we should be seeing more often so we can assess where we are going, how productive we are, and whether we are building up our productive capacity or allowing it to deteriorate.
[ Translation]
Madam Speaker, some departments are winners and others are losers in this Budget. The Department of the Environment, of which I am the critic for the New Democratic caucus, is a losing department. Even though total Government expenditures will increase, those concerning Environment Canada will be reduced in this fiscal year, in real terms.
The expenditures of that department are reduced against the public's will and despite statements the Minister of the Environment (Mr. McMillan) made before the Standing Committee on Environment and Forestry.

We discussed this matter with the Minister and he told us in committee that for environmental protection enforcement purposes: "Suffice it to say that Environment Canada will get 6 to 8 per cent of the $3 million of new money added to the pot for enforcement purposes. For the Department of the Environment the person-years will be in the vicinity of 70 for a total of 125 additional person-years for the same purposes."
When we look at the Estimates, that is not what has happened. In fact, the resources for conservation and protection are down. Total funds have been reduced in real terms. They have not gone up with the cost of living and there is a real difference in absolute terms in the number of person-years.
The Department says there will be 12 new person-years in the Supplementary Estimates, but this means a net reduction of 30 person-years over last year. It has been down by 254 since the Government came into power. A real reduction. This
in an absolutely vitally important area, one where the public wants to see more action on preservation of the environment.
With respect to the wildlife toxicology fund, the Government first let its funding lapse. There was only SI million in the past three years. We do not know if there is going to be any replacement of those funds in any other fashion. The fund had been handling the money when direct departmental expenditures were cut, but we do not know what their funding is going to be.
We have slashes in the environmental budget for nongovernmental organizations, which have played a really vitally important role in defending the environment, giving the public input and using expertise from ordinary citizens who know what is happening to the environment in their particular area. The Government cut $75,000 from their funding since last year. It seems that the annual grant to the Canadian Coalition on Acid Rain has been discontinued. Acid rain is our major environmental problem, and here the coalition dealing very actively and vigorously with this matter is not getting any funding.
I want to address for a couple of minutes the question of the size of the Public Service. Government has made a big to-do about its reduction in the Public Service as a matter of efficiency and productivity. Of course, the plan was announced some time ago for a reduction of 15,000 persons in the Public Service to take place gradually. Here we have in this year's Budget a little bit of bragging by the Government. Implementation will continue and staff reductions to date have resulted in cumulative savings of $375 million by 1990-91. The cumulative savings from the person-years will exceed $1.5 billion, with recurring savings of about $500 million each year.
1 suggest that this is absolute bunk. Presumably they have the numbers right and I am not going to quarrel with that. However, if there were real reductions in expenditures as a result of these cuts in the Public Service we would be seeing a decrease in over-all expenditure. That is not what is happening. Budget expenditures are still going up by 5.5 per cent. You have the civil service going down and expenditures going up. What does that mean? It simply means that we have a Government that likes the rhetoric of cutting down the Public Service and slashing permanent jobs.
These are good jobs held by dedicated public servants. The Government has taken some pleasure in saying, a la Margaret Thatcher and Ronald Reagan, that we are being tough in cutting the Public Service. Yet it is replacing these people by contracting out. It does not save any money. We can see that costs are still going up. What it does mean is that a company gets a contract. Maybe it is a company that is going to hive off a little money in gratitude to the Party in power.
This Budget has the biggest expenditures in our history, over $100 billion in expenditures. We have a so-called ethics
February 25, 1988

package. The Government now claims to be interested in honesty in government, yet there are no reforms in that area.
We have the biggest spending we will ever have, yet we have a tendering process which is full of holes. The Canadian public likes to think that there is a process by which the company with the lowest contract bid that is capable of performing the terms of the contract will get it. In fact, that only counts for some contracts. There is still enormous ministerial discretion in the awarding of contracts in every Department of the Government.
The new ethics package does not address that at all, nor does it address the issue of corporate donations to political Parties which are, of course, the very basis for our kickback system. If you get rid of corporate donations to Parties you cannot have a kickback system. There is nothing to kick back.


An Hon. Member:: How about trade unions?


Lynn McDonald: I am asked, "How about trade unions?" Well, should there be a trade union that is in the business of selling widgets to the Government in competition with other businesses, it should come under the same rules. However, trade unions are not in the business of selling widgets or any other gadgets to the Government. They are not profitable corporations. They represent workers in contract negotiations for wages and working conditions. They are not in sales, they are not out to make a profit. Should they be doing that, they ought to be treated the same, but why would you treat two organizations with completely different purposes as if they had the same purpose?
In conclusion, the Government does have a program but, unfortunately, it is not the right program. It is going ahead with its cut-backs in the Public Service. Its so-called tax reform is a fraud. It is not dealing with honesty in government. We see lost opportunities. Opportunities to be fair with this Budget and to bring in a minimum corporate income tax are absolutely lost.
The unfairness is continuing. The increase in burden on middle and lower income Canadians is continuing. The day of reckoning will come. These costs will have to be dealt with. You cannot just talk about reducing the deficit and limiting expenditures. Somehow you have to bring them into alignment. That is not happening because the Government will not deal with making those people pay taxes who can afford to do so and thus bring real fairness into the tax system. As long as we do not have that, unfairness will continue and Canadians will be extremely dissatisfied.
I regret that this Budget does not deal with the real problems with which we must deal in our society and with the fairness which Canadians would like to see. I regret that the Government is hiding from these and putting it off to future Governments to come to terms with those real problems.


A. Daniel McKenzie: Madam Speaker, I enjoyed the Member's lecture on how to run the Government and debt. She is very
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critical and her answer to everything seems to be that we have to spend more money. I wonder whether she and her colleagues would consider doing the people of Manitoba a favour by sitting down with the NDP Government there and having a talk with it about debt and increased taxes. Would they let them know that they are against reducing the civil service? They are reducing the civil service in Manitoba. If it is all right for an NDP Government in Manitoba to do that, it is quite proper here.
Manitoba has had the biggest tax grab in the history of the province. Manitobans are paying an additional $369 million in taxes, a 20 per cent increase. I hope the Member will sit down with Premier Pawley and tell him how disturbed she is. A new tax of 2 per cent on net income has hit taxpayers there. Hydro rates are up by 9.7 per cent. Telephone rates are up by 11.5 per cent. Autopac premiums are up by 9 per cent to 30 per cent. All other government fees are up by an average of 20 per cent, including drivers' licences and birth certificates. An additional 1 per cent sales tax has hit all Manitobans. A land transfer tax has hit Manitoba home buyers. There is a new 7 per cent tax on take-out food and energy conservation materials. Payroll tax has increased by 50 per cent to 2.25 per cent. There is a new water tax.
Each person in Manitoba has a debt load of $9,000. Five years ago it was only $4,500. The history of Manitoba debt is that it took 117 years of government spending to arrive at the present debt. The NDP Government in Manitoba has been responsible for almost half of it in only five years.
I hope the Member will go to Manitoba and have a talk with the Government. The people of Manitoba would be most gratified if the Member would go there and tell them how to run the Government as she has told us how to run the country. Manitobans are the victims of the biggest tax grab in the history of the province. Even though they have to pay more, they will get less.
In addition, Manitobans must face cut-backs in hospital beds, cut-backs in hospital services and closures of wards, and long waiting periods for CAT scans and other diagnostic services. People of Manitoba have to go to the United States to get CAT scans. That is disgraceful. In addition, there is mismanagement in the protection of children.
I will give some examples of mismanagement by the NDP. As a result of the mix-up between Manitoba Telephones and Saudi Arabia, $27 million was lost. Manitoba forest industries have lost $31 million. Manitoba Public Insurance Corporation has lost $58 million. Flyer Industries has lost $100 million, and workers' compensation has lost $148 million. Flyer Industries was a Crown corporation which the Manitoba Government sold. NDP Members in the House criticize the Government for getting rid of unproductive Crown corporations, but I do not hear them saying anything about the NDP Government in Manitoba. It is all right for it to dispose of Crown corporations. The NDP Government intends to establish another Crown corporation, another mix-up there.

February 25, 1988
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Would the Hon. Member be kind enough, when criticizing the federal Government, also to include the NDP Government in Manitoba? Would she pass along her comments on how she would straighten out the ungodly mess in Manitoba? A population of a million people cannot carry that debt load in Manitoba or put up with such mismanagement. Would the Member give her commitment that she will speak to the NDP Government and get it to start straightening out the mess in Manitoba before being so critical of the federal Government?


Lynn McDonald: Madam Speaker, there are quite a few items on the list the Hon. Member has asked me to address. 1 will try to deal with most of them. First, I did not at any time say that we should spend more, more, more, more, more. I was pointing out the contradictions between a government which talks about reducing the deficit but, rather, has increased the public debt in the order of $30 billion every year for four years. Added up, that is roughly $120 billion in increases in the public debt since the Conservatives came to power.
The best example of reductions in the public debt is Saskatchewan. Over a period of 20 years the first CCF Government, under Tommy Douglas, reduced not only the deficit, which is the difference in expenditures and revenues per year, but the accumulated public debt. That was done by the first CCF Government in Canada.
It is true that there have been increases in the deficit in Manitoba. There have been in every province of the country as there have been in the federal Government. They are associated with the time of the recession. The years of 1981-82 were particularly bad. Manitoba is not out of line with other provinces. In Saskatchewan a CCF Government completely disposed of the public debt which was built up by the Conservatives. It was built up again by the Conservatives, reduced again by the NDP, and has now been built up again by the Conservatives.
The lesson is exactly the opposite to what the Hon. Member suggests. There was actually the accomplishment of reduction in the public debt in a CCF-NDP province. There are increases in Manitoba, but they are no worse than in any other province and no worse than what has been happening federally.
There are inconsistencies in the Hon. Member's remarks about increased taxes in Manitoba. He cannot have it both ways. He complains about the debt in Manitoba and he complains when taxes are increased to deal with that debt. That Government is being consistent and is trying to deal with this debt. They were fair tax increases, and that is the big difference with the Pawley Government. It has increased some taxes but it has done it fairly and has related it to ability to pay. That is what the federal Government is not doing. It has not brought in a minimum corporate income tax, and taxes have increased disproportionately for middle and lower income Canadians.
Those two Governments face a problem and one of those Governments, the Government of Manitoba, has approached it fairly. The federal Conservative Government has not approached it fairly.
The Hon. Member referred to health care services and difficulties in the health care field. He ought to look next door to Saskatchewan with its Conservative Government. There has been an appalling deterioration in health care services there. It is the same in British Columbia with, in effect, a conservative Government, a Social Credit Government. Health care services come under established program financing where we had cutbacks federally. It is the same for post-secondary education. Therefore, part of the problems the provinces have in paying for their health care costs stem from the fact that the Conservative Government has cut back financing for those very programs.
I do not think the Member is at all consistent or fair in what he has to say in making comparisons between Manitoba and the federal Government.


Mr. Althouse:: Madam Speaker, I wonder if the Hon. Member for Broadview-Greenwood (Ms. McDonald) would care to comment on ways of raising taxes that are more fair and consistent? I note that in the past, Canada's tax system has tended to impose taxes less heavily on those corporations that have garnered extremely high profit margins. I have some Statistics Canada figures from 1983-and I realize we had a Liberal Government then-which show that the 25 largest business entities in the country, which control one-third of our entire $717 billion corporate pie, although their profit rates were extremely high, generally fell into one of the lowest tax rates, averaging something in the neighbourhood of 9.6 per cent of actual taxes paid on their profits, compared to small corporations which were paying an average of 17.1 per cent at the same time. The results seem to be that the tax system encourages the very large corporations not only to avoid supporting Government but to use the profits and savings from not paying taxes to raid the smaller and medium-sized corporations, putting them out of business. Does the Hon. Member think this is a good way to create economic development?


Lynn McDonald: No, Madam Speaker, it is certainly not a good thing for the economy to have this happen. We know that it is the small and medium-sized businesses that are creating jobs in Canada. They also happen to be the ones which are relatively highly taxed. The Hon. Member is indeed correct in talking about the enormous tax advantages the larger corporations have. This is bad for the economy because they are not contributing their fair share. The burden, then, has to be taken up by other people and small and medium-sized corporations, which we should be favouring more because they are so much more productive of jobs.
February 25, 1988

1 would like to refer to the Government's own analysis of part of this problem. It blames the previous Liberal Government, and it is to a certain extent correct. The problem started under the previous Liberal Government and, indeed, the Right Hon. Leader of the Official Opposition (Mr. Turner) was the Minister of Finance when the major tax loopholes were created, which are still being taken advantage of by these major corporations. In the fiscal plan there is reference to the aggressive tax avoidance measures which are eroding the tax base-and this is the language of the Minister of Finance (Mr. Wilson)-which were started by the previous Government. That is true. The Hon. Member for Vancouver Quadra (Mr. Turner) is responsible. However, why is it continuing? Why is the Government not at least bringing in a minimum corporate income tax which could deal with the problem? Why is the Government not really plugging those loopholes? The Government is not doing that and because corporations are not-


The Acting Speaker (Mrs. Champagne):: I apologize to the Hon. Member but I must interrupt. The time for questions and comments has expired. Resuming debate.


Mr. Bob Corbett (Fundy-Royal):: Madam Speaker, I am indeed pleased that I have the opportunity to be involved in this debate this afternoon. I will take this opportunity to be perhaps somewhat more positive about the country in which we live than the Member who spoke previously. I would like to talk about our country's future and the capability of its citizens.
I do have a sense of responsibility, being a Member of this place, to share in the positive news about what is happening in Canada without dwelling continuously on the past days of previous administrations and the sort of problems we would have had to face should a Liberal-NDP coalition have continued. Fortunately for Canadians, that did not happen.
The night the Budget was tabled, the pundits labelled it dull, stand-pat and stay-the-course. The inference was not complimentary. However, I would suggest that there could not have been a greater compliment. We are staying the course because it is a strategy that works and has been proven to work. Why would we want to veer from a winning formula? Why would we want to return to the days of budget trickery and gimmickry that dazzled Canadians with seductive but ultimately costly programs, of promises and more promises? Why would we want to return to those days of sky-high unemployment, escalating inflation, crippling interest rates, unprecedented deficit growth, plummeting dollar values, declining economic growth and crumbling investor confidence? Why would we want to do that? It is a stay-the-course Budget which allows individuals, along with the business community, to know that the solid record of progress will continue and will provide for a stronger, more competitive, more prosperous and more innovative Canada.
When this Government came into office, the Minister of Finance outlined the Government's commitment to moving Canada away from a decade of soaring government deficits,
The Budget-Mr. Corbett
rising unemployment and sluggish uncertain growth. The Government was committed to taking the lead in economic renewal. However, the Minister of Finance warned that renewal would not come quickly, nor would it be easy. There are no quick fixes. It would have to be undertaken in a deliberate, well thought out program. The Minister of Finance issued the challenge. We must put our fiscal house in order. We must redefine the role of Government so it provides a better framework for growth and job creation. We must develop policies that will foster higher investment, greater innovation and increased international competition. We must do these things in a manner which is fair, open and consistent with the spirit of Canadianism.
Three-and-a-half years later, Canadians are enjoying the benefits outlined in the economic agenda of November, 1984. That agenda set the course for the economic renewal and revitalization that this nation has witnessed and been a part of since that period.
This Government took office and took hold of an economy that was-my colleague from St. John was rather kind, I think, when he said it was almost out of control. I will not be quite as kind. I will say that it was out of control. All Canadians have enjoyed greater prosperity since that time. In my home Province of New Brunswick, a total of 33,000 jobs have been created since 1984. I am confident that under this Government and the steady hand of the Minister of Finance, the significant job creation in New Brunswick will continue.
This Government has more good news for New Brunswick-ers. In December, 1987, in the neighbouring constituency of the Hon. Minister of State for Forestry and Mines (Mr. Merrithew) the inflation rate in Saint John was only 3.7 per cent, below the national average of 4.2 per cent for the same period. That is significant. If my colleagues opposite do not think it is, then they should go to Saint John and ask Saint Johners how significant or insignificant they think it to be.
The personal disposable incomes of New Brunswickers increased in 1986 by 4.4 per cent. It is expected that they will increase by 6.4 per cent when the 1987 figures are released.
The number of families living below the poverty line has decreased in New Brunswick from 18.5 per cent to 15.5 per cent, a three point reduction between 1984 and 1985. That is in just one year's time. We know that it is still too high, but the Government has taken initiatives to deal with that intolerable situation with which we were left from previous administrations. The programs are working well.
The list of good news is long. The amount of prosperity and good news is directly proportionate to the depth of the Government's commitment to New Brunswick and to all of Atlantic Canada. It is important to note the Government's commitment to regional economic development in Atlantic Canada. This commitment was reinforced in the Budget.

February 25, 1988
The Budget-Mr. Corbett
Throughout the tenure of the present administration it has been a priority.
The most significant initiative to date is the Atlantic Canada Opportunities Agency. This new agency has its headquarters in Atlantic Canada. It is administered by Atlantic Canadians. It makes only good sense that those who deal with the problems which are unique to our region be people who know what the problems are. After all, when one's car breaks down one does not take it to Oshawa or Detroit to have it fixed. One has it serviced nearby where there is a competent level of expertise and ability to deal with the problems. We have a good sense Government, and this is a good sense Budget.
ACOA will handle a total of $1.05 billion over five years to encourage small and medium-size businesses and industry in the Atlantic region. ACOA is not the only initiative that has been taken by the Government in Atlantic Canada. There is in addition to it the Atlantic Enterprise Program, the Atlantic Opportunities Program, Enterprise Cape Breton, the economic and regional development agreements, six of which are in New Brunswick alone, plus initiatives for forestry, agriculture, energy, fisheries, investment, mining and small craft harbours. This is only the tip of the iceberg in terms of regional development in our part of the country.
The Canadian Jobs Strategy is working to create new training and employment opportunities in the Atlantic provinces. Jobs, jobs, jobs are indeed being created.
In 1984 the Government committed itself to social justice. A high priority of the Government was to restructure the tax system. The tax reform initiatives announced in 1987 have gone a long way to accomplishing this commitment. Again, in a part of the country where regional disparity has too long been a way of life this is significant.
There are now some 86,000 low-income earners who will no longer pay any income tax. There will be in excess of 875,000 low and middle-income earners in Atlantic Canada who will pay less income tax because of the tax reform system. We never hear about these measures from the socially conscious and aware people who apparently maintain that these people do not exist. Collectively, New Brunswickers will pay 5.8 per cent less of the tax burden on a national scale. This is good news for New Brunswickers and for Atlantic Canadians.
Income tax cuts will mean more money left in the pockets of Atlantic Canadians. The more money that we have the more we will spend and invest. The more money we spend and invest the more that will remain in Atlantic Canada to create the economic growth and the much needed jobs that the Government is committed to working toward.
Like all things everything cannot be perfect. We cannot have everything that we would like to have. In this respect I would like to leave one thought with the Government. It is with reference to some concerns that my constituents have expressed about the 15 per cent tax on investment income.
Canadians believe that all individuals and corporations must pay their fair share of taxes. Obviously, that is a primary consideration of the tax reform proposals. Unfortunately, what is happening now is that many Canadians feel themselves paying the cost of this effort. The modification of the original proposal was an apparent effort to meet both the needs of Canadians and the need for tax fairness. However, many people in my constituency of Fundy-Royal continue to appeal to the Minister to withdraw the investment income tax proposal in order to protect the future value of their insurance policies. I urge the Government to consider seriously some way of ensuring that these people's fears are allayed.
Allow me to stray for a moment, Madam Speaker, to the free trade agreement. This historic agreement is the fulcrum of Canada's prospects for our continued economic prosperity in the future. This trade agreement will provide better and expanded opportunities for economies of scale in Canadian production and marketing. The Canada-U.S. trade agreement will stimulate innovation, greater productivity and lead Canadians to a lower-cost economy. My main concern as a parent with the Canada-U.S. trade agreement is that it will result in secure future growth and better opportunities for our children and their children. What opponent of this agreement is prepared to stand in his or her place to deny their children the right to a better future?
New Brunswick and the Atlantic provinces have long been denied access to their traditional and geographic trading partners along the Atlantic seaboard. As a matter of fact it was in the days of the national policy that we were first denied this natural trading route. Since then it has been a downhill slide for Atlantic Canada.
Our geographic natural partners along the Atlantic seaboard have been denied to us for too long. The New England market is vast. With unimpeded access to such a market Atlantic Canadians will be able to enjoy once again the prosperity of times past. We in Atlantic Canada should be clamouring for the heads of those who would deny us access to our traditional and geographic trading partners. We have been suffering for too long the consequences of such measures as countervails on softwood lumber, the proposed countervail on potash and the countervails on fish and potatoes. The list goes on and on. Those who would deny us the opportunity to rid ourselves of those millstones around our necks should indeed go to New Brunswick, to Atlantic Canada, to suggest that we as Atlantic Canadians should not have these opportunities. I would welcome the opportunity of having somebody go into the region to say so.
Exports from New Brunswick to the United States accounted for 15 per cent of employment in New Brunswick and a total of $2.6 billion annually.
Atlantic Canada has been battered in the war of protectionism between Canada and America on many different occasions. The workers and businessmen of the region want an end
February 25, 1988

to this. They want that end to be the culmination of a Canada-U.S. trade agreement.
All Canadians want the 120,000 new jobs that this agreement will bring about by as early as 1993. That is just the tip of the iceberg. There are a great many studies in the works and others which are in place which suggest that eventually we will be looking at something more significant and substantial than just 120,000 jobs.
Canadians want their real family incomes to increase by $1,800 annually as a result of this deal. Canadian consumers want better quality. They want better selection and lower prices. They want the U.S.-Canada trade agreement.
The implementation of this deal will cost Canadians little. It will take courage and a strong commitment to a better future and the desire to see our nation strong. That is all that Canadians will have to pay for this agreement. It is a small price.
I suggest that in 20 years from now we in Canada will be hard pressed to find a single living soul including our socialist friends and their allies in the Liberal Party who will say that they were against the deal. The same was true with respect to the Auto Pact.
[DOT] <1710)
What is the reason for the prosperity? What is the cause for all of the good news in Atlantic Canada? The answer is a Government in control of its spending, a Government with its eye on the future, a Government that is in the process of changing the direction of the Canadian economy in order that it will meet the challenges of tomorrow's world. The Budget has shown Canadians that we are meeting our commitments of four years ago and that we are prepared to meet the challenges that the future will bring.
Since 1984 the Government has revitalized the private sector and restored fiscal responsibility to government financing. This has been accomplished by reducing the deficit from $38 billion in 1984 to $29.3 billion where it stands today. This is a tremendous achievement. In 1984 many Members on the opposition benches stated that we could not do it, but it has been done. The Government and the Minister of Finance (Mr. Wilson) have done it, and we will continue along this path of slow but steady economic growth.
The deficit was only one problem that we inherited from the Liberals. Between 1980 and 1984 government spending had increased by some 14 per cent, which far exceeded the rate of inflation in the same period. Under the Liberals government spending doubled in a short period of five years.
This Government has managed to turn all of this around. In the first three years of our mandate we cut spending to 3.5 per cent, less than the rate of inflation. If we had not taken immediate action Canadians would have been faced today with an extra $100 billion more on our national debt.
The Budget-Mr. Corbett
It is because of this Government's steady hand over the past three years that we are able to announce an increase in government program spending of 4.3 per cent for the coming fiscal year. It is true that deficit reduction and economic growth will slow down in the coming year. We will continue to have growth and we will continue to trim the deficit.
The Government has been solidly committed to the strength of the Canadian economy and the future of the nation. As the Hon. Minister of Finance so aptly pointed out in his Budget Speech, Canada has done better than any other of the major industrialized nations. Canada is number one in economic growth. This is reflected in the growth of investment and in the creation of new industry and business across the country. Canada is number one in employment growth. The national average unemployment rate has fallen to 8.1 per cent in January from 11.7 per cent in September, 1984. In New Brunswick the unemployment situation that this Government inherited was considerably worse. In 1984 the unemployment rate in my home province was 16.2 per cent, which was intolerably high. Today I am pleased to report that this figure is down to 12.5 per cent. It is still too high, but there has been a real reduction of 3.7 percentage points. This is significant progress, progress that has led to the creation of 1.150 million jobs nationally since 1984 and 33,000 jobs in New Brunswick. These are good, well paying jobs, unlike those created by the quick fix band-aid program of Liberal make-work projects. Economic and employment growth were spread more evenly among the regions last year, and unemployment dropped in every province.
There is not much good news. Unfortunately, Atlantic Canadians have not been in a position to accept or absorb it all. The Opposition has stated that it is pledging to help the Atlantic region. But when it comes time to cast a vote for Atlantic prosperity in the House of Commons, suddenly the Opposition is whistling a different tune. In case my colleagues opposite have short memories, the NDP voted against the initial payment of $127 million designed for the Atlantic Canada Opportunities Agency. The NDP voted against $17 million for Atlantic Canada's fisheries.
To add insult to injury, the socialist finance critic, the Hon. Member for Ottawa Centre (Mr. Cassidy), was in Quebec not very long ago telling the shipyard workers, as my colleague from Saint John pointed out, that if the NDP were making the decisions, Montreal would have been allocated the second batch of frigates and not Saint John. I for one am glad that the NDP is not making the decisions. I can tell you, Madam Speaker, so are a lot of shipyard workers in Saint John, New Brunswick.
The NDP and that Hon. Member ought to be ashamed. The socialists think that they can pit region against region and then sop up votes from the aftermath. I can say that that will not work. New Brunswickers recognize the NDP for what it is. New Brunswickers will reject the NDP in the next election as they have done in past elections.

February 25, 1988
The Budget-Mr. Corbett
I would like to point out that my colleagues on the Liberal benches will be pleased to note that not one single person year of employment for the construction of the second batch of frigates will go to any Toronto shipbuilding yard. That is because they have been complaining bitterly and constantly about all of the jobs being allocated to Ontario. They must be pleased that not one single job of that contract will go to a Toronto shipbuilding yard.
There are many things that I want to say and deal with, but 1 see that my time is running short. I wish to close by saying that fostering and guiding economic renewal is not an easy, or, as we have seen, a popularity building achievement. Significant growth, job creation, economic stimulation, international competitiveness, and deficit reductions are simply not sexy issues. But they are issues that affect the social and fiscal fabric of every region of Canada.
This Government and the Finance Minister are to be commended for applying a fiscal strategy that is responsible and rewarding. Canadians can see the difference between policies determined by what is popular, and policies determined by what is right.


A. Daniel McKenzie: I wish to congratulate my colleague, the Hon. Member for Fundy-Royal (Mr. Corbett), for an excellent address. I always enjoy listening to him because his speeches are well researched and he has excellent technical material which is very important to the debate. I am glad that he touched on the debt. I would like to ask for his opinion on a couple of matters.
After reaching $29.8 billion in 1984-85, financial requirements are projected to drop to less than $10 billion by 199293. Relative to GDP, financial requirements will have dropped from 6.7 per cent in 1984-85 to 1.2 per cent in 1992-93. A mess like this cannot be turned around in four years.
We have to keep reminding the Canadian people who was the architect of the debt. When the Leader of the Liberal Party, the Member for Vancouver Quadra (Mr. Turner), became Finance Minister in 1972 there was a surplus of $700 million in the Treasury. By the time the Leader of the Opposition had finished as the Finance Minister the debt added up to $5 billion. That is what is known in Canada as the "Turner formula". Following Liberal Finance Ministers continued with the "Turner formula", and we ended up with this massive billion dollars of debt. We cannot forget to remind the people of Canada who was responsible for starting this mess in the first place.
The Hon. Member for Fundy-Royal pointed out the progress that has been made in eastern Canada and in his Province of New Brunswick. I would like to get his opinion on what he thinks of the National Energy Program and the devastation that it did to western Canada. Here is what the Liberal Party and its NDP cohorts did to western Canada. In a recent edition of the Western Report it stated, "Ex-Liberal Energy Minister Marc Lalonde admits publicly for the first
time that the purpose of the NEP was to prevent the West from growing too wealthy".
Can anyone imagine two political Parties working together to plot against the West? It was devastating. Small companies had to lay people off. At the time I read into the record all the firms in Quebec and Ontario that suffered from the National Energy Program. The Member for Bourassa (Mr. Rossi) thinks it is a big joke.


Carlo Rossi: It is a big joke because you are against francophones. You are against Quebec. That's why it is a joke.


A. Daniel McKenzie: Marc Lalonde also stated, "Our proposal was to increase Ottawa's share appreciably so that the share of the producing provinces would decline significantly and the industry share would decline somewhat". Well, it declined the energy industry in the West. There were lay-offs in the West and it affected all types of firms in Quebec and Ontario. Now the Liberals and the New Democrats are opposing the free trade agreement which, when implemented, will bring untold wealth to western Canada.
I would like to ask a question of my hon. friend. The trade deal was not cooked up overnight in a kitchen. It has been studied to death. In November 1982, the then Liberal Government appointed a royal commission to study economic union and development prospects for Canada. Some three years and $24 million later the Macdonald Commission presented its report which overwhelmingly recommended that Canada pursue free trade with the United States. We cannot ignore a $24 million study.
In March 1974, the Liberal dominated Senate conducted a study in its foreign affairs committee of Canada-U.S. relations. Some eight years and over 100 witnesses later, the committee presented its report which overwhelmingly recommended that Canada pursue free trade with the United States.
How can we ignore these studies? It is incredible. Millions of dollars have been spent doing sound research, and political Parties say that it is no good. They do not know what they are talking about.
The Canadian Manufacturers' Association and many business and agricultural groups support the free trade proposal as well. I should like to ask my hon. friend to whom he thinks we should be listening. Should we be listening to the detailed studies of the Senate committee and the Macdonald Commission, the Canadian Manufacturers' Association, or the NDP?


Robert Alfred Corbett: Madam Speaker, I wish to express my appreciation to the Hon. Member for Winnipeg-Assiniboine (Mr. McKenzie). I know that he has consistently and constantly over the years represented the West and his part of the country in a fair and balanced way.
February 25, 1988

I am astounded that during the course of his remarks to me a member of the Opposition should attempt to shout him down, imputing racist slurs against him-


Carlo Rossi: Right. He is a racist.


Robert Alfred Corbett: I think that sort of behaviour should be intolerable in this place. Certainly that type of action does not enhance our reputation in the eyes of Canadians, nor should it.
In response to my hon. colleague's questions, I will attempt to deal with them as I recall them. There is no question that one of the most substantial or significant problems with which we as Canadians are faced today and must deal is the fact that over the past number of years, particularly prior to the current administration, we have been treated to a runaway spree of deficit financing primarily by a Liberal administration. As a result, tremendous and huge debts have built up.
I remind my hon. colleague that if one looks at the Budget Papers one will see that in 1984-85 we inherited $22.3 billion worth of public debt charges. If we take that particular amount and add it constantly over the four years we have been in control of the purse-strings, we will see that it totals some $88 billion. Let me point out that the figures of the Right Hon. Leader of the Opposition (Mr. Turner), who maintains that we have had an increase of $116.6 billion or 66 per cent in the last three and a half years, are not accurate. What we must do in fact is deduct the amount of debt we inherited on an annual basis from the Liberal administration, which amounts to some $88 billion. This means that we are faced with an increase of $28.6 billion. That is much more in line, particularly in view of the fact that we were committed to such programs as old age security, workers' compensation, unemployment insurance, and health care.
I well remember as an easterner the devastation of the National Energy Program. I well recall what took place, because we in Atlantic Canada had suffered for years under the intolerances of that particular administration. I recall when all investors were running as fast as they could get to the border, to head south of the border to the United States. I know what devastation the National Energy Program wrought on western Canadians and the fiscal irresponsibility, probably because of the very things which my hon. colleague has mentioned. I would not doubt at all that that was their intention. They have consistently ignored Atlantic Canada in the same way.
1 remind my hon. colleagues opposite that back a short time ago they voted against an extra $7 million for Enterprise Cape Breton. The Liberal Members from that region should be downright ashamed of themselves. Indeed, that is what they did.
What else have they done? They have done several other things. Time and time again when they were in government they had opportunity to treat Atlantic Canada fairly. They expressed their lack of commitment to the Atlantic region by voting against the $17 million Atlantic Fisheries Restructuring
The Budget-Mr. Foster
Program. What kind of answers do they have to that? They have nothing but racial slurs against my colleague on this side of the House, for which I give them no credit-


Carlo Rossi: Because it is true. He is a racist.


Robert Alfred Corbett: It is an example of the sort of administration that we would have, should we ever be treated or mistreated to the opportunities of having such a Government back in place.


Carlo Rossi: He is anti-French.


The Acting Speaker (Mrs. Champagne):: It is very difficult for the Chair right now not to hear words that are being exchanged in the House. Some of the allegations or accusations are not in the type of language which should be used in the House.
I would appreciate it very much if all Hon. Members were to refrain from name-calling. Even though some people may feel justified about such name-calling, it does not belong in the House, and the Chair will not turn a deaf ear to it.
The time for questions and comments is now over. Resuming debate with the Hon. Member for Algoma (Mr. Foster).


Mr. Maurice Foster (Algoma):: Madam Speaker, I am pleased to have a chance to say a few words this afternoon on the Government's Budget Papers. As we see by looking at the document, it is very thin. It does not contain very much. It is in both official languages, so it is actually half as thin. The document does not say very much.
When the Minister of Finance (Mr. Wilson) spoke a couple of weeks ago, he did not say very much. It almost seems like an accounting document, one that he could have easily tabled in the House, because it did not contain very much to help Canadians.
Over the past three and a half years taxes have increased dramatically, to some $22 billion for average citizens, whereas during the same period of time they have increased very little, if any, for corporations. That is fitting; that is what we thought the Tories would do. It is not what they said they would do. In the election campaign three and a half years ago, the Prime Minister (Mr. Mulroney) said that he would have a great, new egalitarian society. However, when we look at this document and look at what has happened over the past three and a half years, we see what the Government is planning to do. What it has been doing in each statement is trying to pull the fabric of our nation apart, making a very rich section and a very poor section. The Leader of the Official Opposition (Mr. Turner) said that it really creates two Canadas, a rich Canada and a poor Canada. That is what the Government has been about in this document which really does have many new changes, although I would like to talk a little bit about the changes later on.

February 25, 1988
The Budget-Mr. Foster
Our real concern is the impact which this Budget and previous Budgets will have on Canadians. If we look at the taxes which have been imposed on Canadians since September, 1984, we find litany of regressive direct sales taxes, excise taxes, all of those taxes which hit low income people more than the high-income people. The whole tax reform is to bring down the income tax scales so that those in the high-income tax brackets will benefit and those in the low income brackets will benefit very little, if at all.
When the Prime Minister and the Minister of Finance talk about taking 850,000 people off the tax rolls with a tax reform program, they fail to mention that practically one million Canadians have been put on tax rolls by tax increases imposed since 1984. Although this Budget is a very thin document, in this one year alone, 1988, the Government has imposed $2 billion worth of new taxes, most of them imposed on a regressive basis via sales tax excise taxes on gasoline and a whole host of other things.
If you glanced through the document you would say it is not bad, that only a 1 cent a litre tax on gasoline showed up. But if you look closely at the taxes applied in 1988, you will see different things coming from tax reform and from previous taxes which start January 1, 1988 and amount to $2 billion. I cannot do the calculation rapidly enough to give the exact across-the-board increase, but it is an extremely heavy load in this one year. There was the 1 cent a litre gasoline tax, which draws down $300 million. There was an additional sales tax of $300 million, which came into effect with this Budget. On top of that, on January 1 there is a 10 per cent tax on long distance phone calls amounting to $870 million.
I had a small businessman in the marina business contact me about that and he said it amounted to something like $80 or $90 in additional taxes on his small business which commenced at the start of the year when business is slow. There is a 12 per cent tax on wallpaper, which will amount to about $60 million. From the 1985 Budget there is deindexation of the income tax scales, which add another $750 million. Even though the document is very thin it rides very hard on low-income people and on senior citizens because practically every tax is a regressive excise or sales tax. There is very little lifted from the ordinary low income Canadians in this exercise.
It is interesting that in the calculation which our caucus did, the average family with an income of $32,000 a year will pay about $1,200 per year more this year than it did in 1984. This calculation is based on all of the increases which have taken place during the last three years. The tax load has been especially onerous for the average family. In northern Ontario the increase in gasoline taxes, which amount to 5 cents a litre or 23 cents a gallon since 1984, we consider to be a special tax on northern Ontario. I am sure areas in western Canada and in the north consider it a special tax placed on their regions because of the longer distances people have to travel. That 1 cent a litre tax increase generates some $300 million, and in
the Budget Papers it was set exactly beside the loss of revenues and tariffs in the Canada-U.S. trade deal.
The Prime Minister talked about a free trade deal. If you look at it you find that the tariffs which are reduced by some $400 million in the first fiscal year of the free trade deal cost some $460 million. In the first three months of 1989 it will cost some $55 million and the new taxes generated from this 1 cent a litre extra will little more than cover the loss of those tariffs.
The Government's anticipation of increased jobs over the first five years of the free trade deal are estimated at 120,000 jobs or 24,000 a year. That was calculated on the basis that the tariffs would be lifted, and over the five years it would amount to some $2 billion. In fact, if you look closely now that this gas tax has been imposed, you will find that there will be no reduction in taxation for the ordinary Canadian. In fact what Canadians would pay less in tariffs they will pay more in gasoline taxes.
Certainly over the 10 year period Canadians will pay a great deal more, perhaps $700 million or $800 million more. But there is one difference. Tariffs, whether on poultry meat or a seasonal tariff on tinned fruit and vegetables produced in the Niagara area or in the Okanagan Valley, help protect Canadian industry, Canadian agriculture and Canadian jobs, whereas the excise tax placed on gasoline is a straight dead weight.
For the sake of those who might have forgotten how much additional taxes have been imposed since 1984, we should look at all the indirect tax increases. We have had a 25 per cent increase in sales tax from 9 to 12 per cent at a cost of $3 billion extra. We had a tax for candy, soft drinks and fast foods imposed in 1985 and 1987 of $460 million. I have already mentioned the wallpaper and paint tax of $60 million which started January 1. If we look at the gasoline taxes, we see an addition of over $2 billion during the three and a half year period. There have been a rash of taxes relating to alcohol, tobacco and so on. In any event, the whole tax regime has been to grind down those in low-income groups.
One decision made last year in the tax reform package was the decision by the Minister of Finance to remove the special provision with regard to the mine depletion allowance and flow-through shares. This mechanism, which was put in place in 1984, raised some $500 million or $600 million a year for mining exploration and development in areas like northern Ontario. There will be a rally here on March 1. Municipalities from all over northern Ontario, northern Quebec and the northern parts of Canada that depend on mining exploration and development will emphasize to the Government what a tremendous disadvantage the loss of the flow-through shares and the earned depletion allowance will be for the mining industry.
If those mechanisms for carrying out exploration and development are not in place, we will not have new mines or the job opportunities that are created by those new mines. I
February 25, 1988

still hope that the Minister will change his mind and make a decision to reinstate the earned depletion allowance and the flow-through shares.
1 see that the Hon. Member for Western Arctic (Mr. Nickerson) is here today. I know that he would want to support me in that. In resource areas like northern Ontario and Western Arctic, we depend on mining operations to provide jobs. We in Canada have not discovered many new mines in the last 10 or 15 years. If we stop providing these incentives for investment in exploration and development, of course we will not discover any more at all.
As well, I want to look at the situation in agriculture. I have long been concerned about the situation of agriculture in Canada. We were heartened to hear the Prime Minister indicate back in December that he would put some $400 million or $500 million in additional funds into the Farm Credit Corporation. As Hon. Members know, agriculture is facing one of the most difficult and trying times in history. Of the 170,000 farmers who have economic-sized farms, farms with sales of over $20,000 a year, some 40,000 farmers are in serious financial difficulty or are totally insolvent.
We have been calling on the Government for over a year now to get serious about this problem and to take some action to put the Farm Credit Corporation on a sound financial basis. We learned last April 30 that the Farm Credit Corporation had a negative equity of $124 million. That had changed from a positive equity position of $125 million in the last two or three years. We are told that by the end of this fiscal year, 1987-88, that negative equity position will be close to $300 million.
We were flabbergasted to learn when the Estimates were tabled this week that absolutely no funds had been provided to the Farm Credit Corporation in the way of appropriations. Surely the Government ought to take seriously its responsibility to the rural parts of Canada. The agriculture industry is one of the top industries for employment. It permeates the entire country. Surely the Government should have taken some action to restore the financial viability of this Crown corporation.
At the meeting of the Agriculture Committee this morning, we spoke to the new Chairman who is charged with the responsibility of establishing a recovery program. He did not know either why there was no funding provided for the Farm Credit Corporation. There is much concern across Canada that the Government may be trying to privatize it or wind it up. We do not know. We do know that the new Chairman is saying that the corporation will be hard on farmers and will force them to pay up when they are delinquent on their accounts. This is happening at a time when many farmers have been going through the worst period in history. The only explanation that seems reasonable is that the Government is refusing to provide this funding to the Farm Credit Corporation so that the corporation will go after the farmers and make them pay
The Budget-Mr. Foster
up, even though they may have to deprive their families of benefits or even of a decent living.
Those are some of the concerns I have as I go through the Budget brought down by the Minister of Finance a couple of weeks ago. I think there is so much concern because people are very uncertain about tax reform. We have heard that the income tax scales will be reduced and that in fact there will be a slight reduction in income taxes sometime in July or August of this year, a reduction of $150 to $200 for the average taxpayer. Comparing that to extra taxation through all kinds of regressive sales taxes in the past three and a half years, it does not seem like very much. There will be a reduction of $150 to $200 with an increase of $1,200. We know that the other shoe must eventually fall.
The Government is planning to bring in a new super-deluxe national sales tax which will apply not only to traditional goods and commodities but will also supposedly apply to all kinds of services. It will apply at various stages along the production of commodities. It seems to me that if tax reform had been done on a fair, equitable and honest basis, it should have been done completely. There should have been a comprehensive program so that people would not have to wonder what will happen with that sales tax increase which will supposedly take place later this fall or in the coming year. That could provide for a double whammy. Again, a sales tax is a regressive tax, one that hits everyone on an equal basis, regardless of income and ability to pay.
The Government missed an opportunity to come completely clean with Canadians in this Budget. We know that there has been massive new taxation. We know that there is new taxation coming that will apply to all kinds of services as well as to commodities. The Minister of Finance really missed an opportunity to help the regions, to provide new funding for northern Ontario, Atlantic Canada, the West and some areas in the North. He missed a chance to reinstate flow-through shares and earned depletion allowances. As well, he missed the opportunity to provide some redress to low-income families who are suffering from a massive increase in regressive sales and excise taxes. That is why we think the Budget was a missed opportunity to help the slow-growth regions of Canada and to help low-income families.


Mr. Scowen:: Madam Speaker, the previous speaker brought to the attention of the House the problems with the Farm Credit Corporation. I am a farmer. The policies of the previous Government were what gave me the inspiration to run in the election. I saw what that Government did with its policy of a capital gains tax and building that tax into the cost of the land. The cost of land went up and up and up and the Farm Credit Corporation encouraged people to take the land on at these very high prices. Now, of course, we have the problem of collecting and redistributing the money owed.

February 25, 1988
Adjournment Debate
I would like to know from the Hon. Member why he supported this kind of capital gains tax which caused the problem in the first place and what his solution is to the bind the FCC finds itself in today? It seems that his way of solving the problem is irresponsibly to pour more money out. It appears that the Hon. Member would like us to follow the same pattern as the previous Government which is what got the farmers into the problem in the first place.


Maurice Brydon Foster: Madam Speaker, I am glad the Hon. Member for Mackenzie (Mr. Scowen), one of the most distinguished members of the Standing Committee on Agriculture, has raised this matter of capital gains. Really the problem has been of a capital loss over the last three or four years. The net asset value of the Canadian farming industry has dropped from $116 billion to around $90 billion or $95 billion. The Government has been reluctant to put in place any mechanism to deal with this problem.
The Chairman of the FCC ticked off the Minister of Agriculture (Mr. Wise) this morning by saying in committee that one of the big problems had been that the Minister brought in this program of no foreclosure on FCC mortgages, implying that he did so without putting in place any mechanism to restructure the debt. That policy was in place for I guess 18 months or so. Now, belatedly, the Prime Minister has announced that he plans to provide some $500 million, in either loans or assistance, to the FCC over the next three years. I think everyone at the meeting of the committee this morning was saying, well, we know the Prime Minister announced that; the Chairman is criticizing the Minister for the moratorium on foreclosures; putting the two together, you would ask if the Government is going to provide this extra assistance, why did it not do it in the fall of 1985 when the Minister put the moratorium into place and provide some kind of proactive mechanism to assist the large number of farmers who are facing the loss of their farms?
We know that we now have 15,000 FCC loans in arrears. We know the debt is spiraling up. If the Government had taken some action two or three years ago similar to what it is proposing now, we might have been able to save some of those thousands of farmers who are facing the loss of their land because of low commodity prices brought on by the American Farm Bill. It is unfortunate that the mechanisms put in place by the Government were so inadequate as not to save some of those farmers.
The Hon. Member has raised a very important question, we just wish the Government had brought in mechanisms to reschedule that debt or set it aside in such a way as to save more of the young farmers. According to all estimates, given the Prime Minister's estimate of a write-off of $100 million a year for the next three years, this money represents several thousand farmers. The unfortunate part is that often they are our youngest and best farmers, our most technically advanced,
those who could have made a great contribution in the years ahead. They will probably not have that opportunity any more.


Mr. Nickerson:: Madam Speaker, it was heartening to hear the Hon. Member support the flow-through mechanism for funneling money into mineral exploration in those parts of Canada dependent for their economic well-being on the mineral industry. That concept is certainly supported on this side of the House and any debate there is over the matter concerns the exact terms of what should be in a flow-through scheme. However, the Hon. Member will be familiar with the position taken by the Hon. Member for Ottawa Centre (Mr. Cassidy) on behalf of the NDP when he said their Party, were they ever to gain office, would get rid of flow-through funding completely. They see it only as assistance to fat cats on Bay Street.


Michael Morris Cassidy: On a point of order, Madam Speaker, I do not believe Members are entitled to make comments like that when the position of our Party has been made very clear, both by my Leader in Rouyn-Noranda, and by myself in various places. It is the Conservative Party which is taking away flowthrough shares and not putting anything in their place. My Leader will be speaking to a conference on flow-through shares next week and the Hon. Member should stop uttering falsehoods in the House of Commons.


The Acting Speaker (Mrs. Champagne):: That is not a point of order. However, I think all Hon. Members will realize that the Hon. Member may be reacting a little strongly in his language. I think it may be wiser for all of us to call it six o'clock.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 66 deemed to have been moved.

[Stage Direction]
PURPOSES/REQUEST THAT REPORT BE MADE AVAILABLE TO CONCERNED WOMEN
Ms. Margaret Mitchell (Vancouver East):: Madam Speaker, on May 12, 1987, I raised women's concerns regarding approval of the drug Depo-Provera for use in Canada as a contraceptive. Women have had serious questions about both the long and short-term effects of this drug, how it will be marketed and for whom it will be prescribed. When 1 questioned the Minister he suggested I should not ask questions but should rely upon him and the regulatory process to solve such matters. Advocacy on behalf of concerned women he considered to be political interference.
The information I received today from the Department of Health and Welfare leads me to say thank heaven for political
February 25, 1988


Mrs. Shirley Martin (Parliamentary Secretary to Minister of Public Works):: Madam Speaker, in response to a question on May 12, 1987, from the Hon. Member for Vancouver East (Ms. Mitchell) I wish to provide the House with information regarding the drug Depo-Provera.
Depo-Provera, an injectible hormonal drug, is a product of the Upjohn Company of Canada and has been marketed in Canada since 1961. The drug is only available with a physician's prescription. It is indicated for hormonal therapy and treatment of endometriosis-a painful condition involving the lining of the uterus-in non-pregnant women, as well as for the treatment of advanced breast and uterine cancer.
The Department of National Health and Welfare is evaluating data in a new drug submission for Depo-Provera for which new claims are being made.
The Member mentioned in her comments tonight the political interference which has taken place in order to make the Minister act. That is the furthest thing from the truth, as she should know. In fact, the Department has continued and will continue to study this drug. It is the work and results of the Department on which the Minister is making his decisions.
As indicated earlier, the drug has been available for many years for other purposes both as an oral preparation under the name Provera and as an injectible preparation where its long action characteristic has been found very useful.
The new indications which are currently under review relate to hormonal therapy and conception control. As Members of the House may know, this drug has been used for years in many countries in Europe and Asia for conception control. This is the first time the drug has been proposed by the sponsor for use in Canada as a birth control agent.
Under the requirements of the food and drug regulations, the manufacturer is required to submit evidence of the safety and effectiveness of Depo-Provera for these new indications before a notice of compliance is granted to them.
In order to hear the views of interested groups regarding fertility control, a series of meetings were held in six Canadian cities, Halifax, Montreal, Toronto, Winnipeg, Calgary and Vancouver, in September 1986. During these meetings, a panel appointed by the Health Protection Branch heard presentations regarding fertility control issues in general. Some individuals commented on the use of Depo-Provera for fertility control. These representations are being reviewed as part of the drug evaluation process.

February 25, 1988
Adjournment Debate
The expert advisory committee on reproductive physiology, an outside committee of medical specialists, and the Department of National Health and Welfare, are evaluating all available safety data on Depo-Provera. The Minister of National Health and Welfare (Mr. Epp) has repeatedly stated that full examination of all the available evidence must take place before there is any approval of this drug for the above-mentioned new indications. At the present time, Depo-Provera is not cleared for the claim of conception control.
NATIVE PEOPLES-GENEVA RESOLUTIONS ON TREATMENT OF INDIGENOUS PEOPLES/REQUEST THAT OFFICIALS BE INSTRUCTED TO SUPPORT RESOLUTIONS


Mr. Keith Penner (Cochrane-Superior):: Madam Speaker, earlier this week I asked a question of the Minister of Indian Affairs and Northern Development (Mr. McKnight) regarding Canada's position on certain resolutions dealing with indigenous peoples and indigenous rights. These resolutions are on the agenda of the current session of the United Nations Commission on Human Rights.
I asked the question this week because my office had received some very disturbing information from Geneva, from persons who are present there, that Canada has not been encouraging and supporting the passage of these resolutions. I might say that they have already been approved by the Subcommission on the Prevention of Discrimination and the Protection of Minorities and are scheduled to go to the full commission very shortly. They call for draft international standards on the treatment of indigenous peoples, second, the establishment of a study into treaties between nation states and indigenous peoples, of which we have many in Canada, and, finally, the designation of the year 1992 as the international year of indigenous rights.
These resolutions are enormously significant to the world's aboriginal peoples. They have been working toward them for several years now and the fact that they are on the agenda of the Human Rights Commission is a sign of the importance that other UN bodies place on these resolutions. If these resolutions do not receive approval when the vote is called, which is imminent-it could be later today it could be tomorrow-then years of work by the indigenous peoples of the world will be severely set back. It could be a two year or three year delay before such resolutions could again be considered. In my view, that would be tragic, and doubly tragic if a great nation like Canada were in some way instrumental in having these resolutions defeated.
Canada has the opportunity to play a positive and very constructive world leadership role with respect to these resolutions. Here in Canada we have tried as best we can through the constitutional process to give recognition to aboriginal rights, yet undefined. We have the treaties I referred to, but their implementation and significance have not been fully appreciated by the Government of Canada, nor the people of Canada. If there was an international discussion, I
believe that the clarification coming from this international discussion could be of enormous benefit here in our country.
The information I received directly in a phone call from Geneva was that Canadian officials were actively lobbying to have these resolutions defeated. I do not have the time now to specify the tactics that they were using. However, I must report to you, Madam Speaker, that they were distressing, to say the least.
On Tuesday I asked the Minister of Indian Affairs and Northern Development (Mr. McKnight) if he would meet with the Secretary of State for External Affairs (Mr. Clark) and send a strongly worded directive to the officials in Geneva to desist from this lobbying practice against these resolutions and, in fact, to get behind them and to support them.
Today I received some heartening information from Geneva. The officials met with the Cree delegates who are there and apparently they have had a change of mind. They have indicated that there has been some sort of misunderstanding and, in fact, they are now prepared to get behind these resolutions and see them approved. In fact, with respect to the one on treaties, they want to see it expanded and improved. That is very good news, and we were most heartened.
However, this afternoon when my hon. friend, the Hon. Member for Skeena (Mr. Fulton), put a question to the Minister of State for Indian Affairs (Mr. Valcourt), he gave an answer which seemed to suggest that the old policy of delaying and holding up these resolutions is still in effect. Thus we have a difficulty here that I would like the Parliamentary Secretary or the spokesman for the Government to clarify. Either the Cree in Geneva who met with officials this morning have been misled or the Minister of State was given the wrong information, a bad briefing, and what he conveyed to the House is not correct. He is probably not responsible for that. I am not laying blame. However, it is a contradiction and it needs to be clarified.
Let me conclude by saying that the Canadian Council of Churches has strongly supported these resolutions. It has communicated this to the Right Hon. Secretary of State for External Affairs and to the Right Hon. Prime Minister (Mr. Mulroney). I conclude by quoting what the Canadian Council of Churches has said. It said:
Canada's support for this United Nation's Human Rights Commission
initiative will demonstrate to the international community and to the citizens
of Canada that your Government is indeed committed to the protection of
aboriginal rights.


Mr. Blaine A. Thacker (Parliamentary Secretary to Minister of Transport):: Madam Speaker, the Canadian position at the United Nations regarding indigenous rights is clear. The Canadian delegation, headed by Mr. Gordon Fairweather, will speak on this topic tomorrow or Monday.
Canada strongly supports the resolution endorsing the continued efforts of the Working Group on Indigenous
February 25, 1988

Populations in developing global standards in the area of indigenous rights. We recognize that the core of the agreed mandate of the Working Group is universal standard-setting.
We are also in favour of broadening and strengthening the draft resolution which calls for an examination of treaties between states and indigenous populations. As in other areas of international human rights, we believe that studies and investigations must be based on objective universal criteria. Unfortunately, the phraseology of the current draft resolution on the proposed treaty study, as presently worded, does not meet this test.
On the basis of an arbitrary criterion-the existence of a treaty-such a study would focus only on the small number of indigenous populations which have treaty relationships with their Governments. A significant portion of the native community in Canada and the vast majority of the world's indigenous populations would be excluded from this study regardless of the conditions in which they live. We are not in favour of excluding native populations, whether in Canada or abroad, just because they do not have a treaty relationship with their states. To do so would not be consistent with our commitment to human rights world-wide. In addition, such a narrow study would divert attention and resources from the main task of the working group, which is universal standardsetting.
Adjournment Debate
We have various types of arrangements with our own native populations. We have aboriginal treaty rights enshrined in our Constitution. We have under way comprehensive land claims negotiations. We believe that some of our arrangements, such as the James Bay Agreement, may be models for other countries. We do not want to exclude any of these arrangements from examination on the basis of a narrow, technical criterion. We want a broad study based on clear standards and objective universal criteria that would study all arrangements-legal, practical and de facto as well as treaties-under which indigenous people live world-wide. This is the direction currently being taken by the Canadian delegation in Geneva.
With respect to other resolutions now on the table at the commission regarding aboriginal issues, Canada has not taken a position. As Members will be aware, Canada is an observer at the commission, and we therefore believe that it is the responsibility of the 43 members of the commission to assess the merits of those texts and to act accordingly.


The Acting Speaker (Mrs. Champagne):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow morning at 10 a.m., pursuant to Standing Order 3(1).


[Stage Direction]
The House adjourned at 6.16 p.m.
[Stage Direction]

Friday, February 26, 1988
[Stage Direction]
Prayers