1988-07-21

Hon. John Wise (Minister of Agriculture):: Mr. Speaker, I have the responsibility to table the Annual Report of the Farm Credit Corporation in two official languages, and I hope to make a statement in the House in a few moments.

[ Translation]


PETITIONS
Mr. Richard Grise (Parliamentary Secretary to Deputy Prime Minister and President of the Privy Council):: Mr. Speaker, pursuant to Standing Order 106(8), I have the honour to table, in both official languages, the Government's response to 10 petitions numbered as follows: 332-4995 to 3325000 inclusive and 332-5003 to 332-5006 inclusive.
[Editor's Note: See today's Votes and Proceedings.]



FARM CREDIT CORPORATION


John Wise: Mr. Speaker, I indicated only a few moments ago that I was intending to make a statement in the House with reference to the annual report of the Farm Credit Corporation. The document, upon study, really contains no surprises for those who have been following agricultural events over the last five or 10 years. The Farm Credit Corporation is reporting major losses again this year. It is important for Canadians to understand how the
Farm Credit Corporation got into this situation in the first place and it is important as well to understand how this Government intends to bring the Farm Credit Corporation back onto sound financial footings.
In the 1970s, the so-called experts made a number of predictions that affected, and affected very seriously, many conventional or traditional lending institutions, and they also made some predictions that had a very severe impact especially on the Farm Credit Corporation. The so-called experts indicated and sent out messages to the effect that interest rates would remain stable. They said that energy costs would remain stable. They said that the inflation rate would remain stable. They said that we would be going through a time, now in the mid-eighties and beyond, of world shortages in food supply. They also said that we would be going through a period of time in our history when commodity prices would be reaching alltime high levels. Obviously, they were wrong on all accounts.
At that time, farmers were encouraged to borrow money to buy land and to expand their operations. By the mid-1970s, the Farm Credit Corporation could not supply credit to meet the demands. In 1975, the Farm Credit Corporation Act was revised to provide 100 per cent of the market value on security of the collateral for the loan.
Again, between 1972 and 1983, loan limits were increased five times to keep up with the inflation of the farm asset value. The lending decisions were made on market expectations that just did not materialize. The widely available credit resulted in heavy borrowing and the farm debt shot up from $4.6 billion in 1971 to $18.6 billion in 1981.
Then in the early 1980s, interest rates shot up. In fact, they increased by about 12 per cent to reach record highs of some 22 per cent or 23 per cent. For farmers, each percentage point represents an additional cost of about $150 million. That increase in interest rates of 12 per cent was a direct input cost to Canadian farmers of nearly $2 billion.
At the same time, commodity prices dropped, especially for grains. Incomes dropped and so did farm asset values drop by nearly $20 billion. Farmers with high debt loads were crippled and the Farm Credit Corporation became a lender of last resort. The Farm Credit Corporation found itself serving clients who owed more than the sale of their land could possibly recover.

July 21, 1988
Statements by Ministers
[DOT] (mo)
Today we see the result of all those factors. Some 96 per cent of all FCC arrears today relate to those loans made prior to 1984. That was a direct result of the conditions during that period of time, and last year the FCC lost $511.8 million.
This Government has made it a priority to restore order to FCC policies and put the corporation back on its feet. These measures include a moratorium on foreclosures in 1984 and 1985; an $80 million interest rate reduction program in 1985; a shared risk mortgage introduced in 1985; farm debt review legislation was passed; farm debt review boards were established. As a matter of interest, a recent survey showed that 74 per cent of those who have used the boards are satisfied with the process. As well, we put in place the Canadian Rural Transition Program and also amended and enhanced the Farm Improvements Loans Act.
Last December, the Prime Minister (Mr. Mulroney) announced that this Government would provide $100 million to help cover FCC losses. More assistance was given to the corporation to allow it to participate fully in the farm debt review process. We put in new managers at the corporation and gave them the responsibility and the challenge of developing a recovery plan. Today, I am announcing that this Government will contribute another $400 million as part of that recovery plan. We will be injecting more money into FCC over the next three years.
The message we are sending out today on behalf of the Government is the fact that the FCC is here and here to stay. This Government stands firmly behind the corporation and is helping to solve its financial problems. This new money will ensure that FCC continues to serve farmers, and a healthier corporation means better service to farmers.
The corporation's role has also been clarified. Its primary job is to provide long-term mortgage credit to Canadian farmers on a break-even basis. It will be an alternative source of credit to average risk farmers, as well as those who represent a marginally higher risk but who have significant potential for commercial viability. These measures will ensure that our farmers have a reliable source of long-term credit when they need it, and that future FCC clients will not be penalized by past corporate losses. These measures also ensure that the corporation will be able to offer competitive interest rates.
Today's financial recovery plan is only the latest evidence of this Government's commitment to Canadian agriculture. In the last four years we undertook initiatives worth nearly $10 billion to our agri-food industry. We made record payments under the Special Canadian Grains Program, stabilization programs, drought assistance programs, and the list goes on. Our record on agriculture is second to none. We stand squarely behind Canadian farmers. We are determined to put the Farm Credit Corporation on a financially sound basis. We will
ensure that it continues to provide long-term credit to Canadian farmers.
Some Hon. Mlembers: Hear, hear!


Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, it has been said before that never has so much been said about so little, the "so little" being of course the action of the Government in its assistance to agriculture.
The Government today prides itself on having bailed out the Farm Credit Corporation after it allowed it to go broke to start with. The Tories applaud the fact that the Government has, a year after the FCC was technically broke, bailed it out and put it back on the footing on which it should have been all along. We are supposed to be very grateful for this.
I was thinking this morning that the Government was going to come into this House and tell us about a massive program of assistance for farmers. I thought the announcement that the Minister was going to make on the FCC would include such things as that the corporation's current losses would be supported by the Government on a long-term basis. I thought the Government would say the FCC would play a brand new and innovative role in the development of financial services for farmers. I hoped to hear the Government would recognize the need for a policy role for the FCC and would commit itself to compensate the corporation for the losses it incurs while developing these policies. I was hoping to hear the Minister tell us today that the FCC would establish a brand new set of programs for beginning farmers and set standards for management skills of beginning farmers, that it would recycle FCC properties and recycle them for beginning farmers. Those are the kinds of things I was hoping to hear the Minister say this morning, but I did not hear any of them.
I was hoping to hear as well that the federal Government was finally going to bail out the FCC from the poor condition it allowed it to get into. Of course I was hoping that. That is the least the Government could do. As usual the Government did the very least it could have done.
I listened with great attention and read the Minister's speech, and I thank him for having the courtesy to provide me with a copy some minutes ago. I was wondering whether it would be delivered by the Minister. I will just refresh your memory on what the Minister just said. He said:
This Government has made it a priority to restore order to FCC policies-
Order? It allowed the FCC to go broke! Is that what you call order? It has to be Tory order but it is not logical order and it is certainly not farm order. Farmers do not run their businesses that way.
The Government says it initiated a number of things such as a moratorium on farm foreclosures. The Government says it initiated farm debt review measures and so on. I am glad to see the Minister listened to some of the suggestions made by Ralph Ferguson and others in the past.


John Wise: Ralph who?
July 21, 1988


Don Boudria: 1 am sure Ralph is proud of the fact that he suggested some of these things. However, when the Minister copies something like that he should put a note at the bottom and extend the proper courtesy to the people who made these suggestions in the past.


John Wise: Ralph could not do it.


Don Boudria: If one does not do that, then it is plagiarism. We would not want to accuse the Minister of that.
One of the most important things 1 read in this statement today is this very short sentence:
FCC is here to stay.
That is an important statement. It is probably more important than anything else in the Minister's speech this morning. That statement is symbolically important for all farmers. It is my hope that the Government and the Minister mean what they say in that statement. It means the FCC has to exist as something other than a name. An organization which is broke now and has been broke for almost a year is not exactly something that looks as though it were here to stay.
I urge the Minister not only to provide the funding today which will satisfy the FCC for the short term because it has this huge backlog of cases to deal with but, more important, to make a commitment that the Government, and any future Government, will not allow the FCC to go broke as the Minister and his Government have done.
I know that the time afforded to us is very limited. That is unfortunate because I could go on and on talking about agriculture and the sad record of the Government in supporting agriculture. The Government has failed to convince its friend, the United States of America with whom it is trying to sign a trade deal, to stop this war on subsidies which has caused the prices of agricultural commodities to go down so much and which has caused so many of the problems we have today. The Government has failed miserably in that regard.
We must remember as well that the excess farm debt at the present in this country is $22 billion. There is $22 billion of excess debt which farmers will never be able to handle. As a matter of fact, the Standing Committee on Agriculture will be reporting on that issue and making a number of recommendations which I cannot reveal, obviously, because they have not yet been reported to the House and I, of course, would never leak the contents of a committee report.
The Minister said, "Our record on agriculture is second to none". What he should have said is, "Our record on agriculture is none to second".


Mr. Stan J. Hovdebo (Prince Albert):: Mr. Speaker, it is amazing how an impending election can bring a tottering Government out of the doldrums and get it to make decisions, statements, announcements of funds which are suddenly available for a variety of reasons-which funds were probably going to be available anyway in some cases-or the re-
Statements by Ministers
announcement of funds that have already been announced and put in place.
Much of the Minister's statement dealt with the history of the Farm Credit Corporation. History is important to know and to learn from. However, it has little value to the credit-starved farmers looking for assistance. The deficit situation of the Farm Credit Corporation is a direct result of decisions made by the previous Government. That Government decided to find money on the market rather than use the money available through the Government.
The Minister indicated that he was going to announce a recovery plan, but failed to do so. The deficit of the Farm Credit Corporation was allowed to grow and the corporation almost reached the situation of being no longer viable. A bailout was necessary. Last December, $100 million was announced and the $400 million announced today covers part of the deficit, but it does not put the Farm Credit Corporation into a position where it can return to the role for which it was originally established. That is something the Minister will have to do before the effect of this money will be felt by the farmers.
There are thousands of farmers in very difficult straits. This so-called recovery plan will give them no more hope of survival. There are a couple of things which this recovery plan could have done which it did not do. For instance, it made no attempt to shield the farmers from high interest rates. The Government has been supporting the increase in interest rates by a Bank of Canada policy which is already affecting the survival of farmers who require credit to continue operating. Interest rates are on the rise to such an extent that they are a factor in the elimination of more farmers each year. This so-called recovery plan contains no protection for farmers in that regard.
It failed to announce the quality or quantity of funds which would be available for lending to farmers in the future. The fact that there are thousands of farmers who need credit now and need a plan to keep them on the farms is not going to be affected by the putting into place of enough money to bring the Farm Credit Corporation out of a deficit position.
Third, as long as the Farm Credit Corporation operates as a bank it will continue to abandon the thousands of farmers who need action for their survival. As long as the Farm Credit Corporation continues to be just another bank it will not help those farmers.
In the past the Farm Credit Corporation has been a very important factor in agriculture, and it can be so again. It must be so again. However, the recovery plan which the Minister suggests he is putting in place, which I suppose could be called a non-recovery plan, will not do much toward establishing a comprehensive structure which would allow farmers to survive, farmers getting into agriculture, to have a source of funds without having to go to the banks and take the kinds of risks which were taken in the past, and to allow able farmers to continue in their present structure.

July 21, 1988
Committee Reports
I am glad that the Farm Credit Corporation is going to be able to eliminate part of its deficit. However, we need answers about how the Farm Credit Corporation will operate relative to farmers in the future. Those are the kinds of answers the Minister did not give in his statement.
I hope the Minister will follow through on the position he has taken and give us, in the very near future, a comprehensive plan for the Farm Credit Corporation so that farmers will have some security about the availability of credit and the price they will have to pay for that credit.



AGRICULTURE


Mr. Alan Redway (York East):: Mr. Speaker, in my role as an urban farmer, being a member of the East York Garden Club, 1 have the honour to present, in both official languages, the seventh report of the Standing Committee on Agriculture relating to Bill C-132, an Act to amend the Western Grain Stabilization Act.
In that same role, Mr. Speaker, I have the honour as well to present the eighth report of the Standing Committee on Agriculture relating to Bill C-112, an Act to amend the Canada Grains Act and other Acts in consequence thereof, also in both official languages which, of course, are the official languages of the East York Garden Club.
[Editor's Note: See today's Votes and Proceedings],



CANADIAN CENTRE ON SUBSTANCE ABUSE ACT


Hon. Doug Lewis (for the Minister of National Health and Welfare) moved: for leave to introduce Bill C-143, an Act to establish the Canadian Centre on Substance Abuse.


Mr. Deputy Speaker:: Is it the pleasure of the House that the Hon. Minister shall have leave to introduce the Bill?


Some Hon. Members:: Agreed.


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

Richard Grisé: Mr. Speaker, on a point of order. In today's Projected Order of Business, on page 6 under the heading Private Members' Business for Friday, July 22, we read:
Mr. Malepart-Motion-Passage of Bills without final Senate agreement
Mr. Speaker, I would like to ask the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart), since his leader, the Leader of the Opposition (Mr. Turner), decided yesterday that Bill C-130-since he asked the Senate not to accept Bill C-130, does the Hon. Member for Montreal-Sainte-Marie still intend to table his motion tomorrow during the time for Private Members' Business?


Mr. Deputy Speaker:: I do not consider this to be a point of order, but if the Hon. Member for Ottawa-Vanier (Mr. Gauthier) wishes to add something ...


Mr. Gauthier:: What goes for the Parliamentary Secretary goes for the Member for Ottawa-Vanier. Besides, this is not a point of order at all, Mr. Speaker. But I would say that the Parliamentary Secretary has put his foot in his mouth. The debate will take place tomorrow at two o'clock. If he wants to know what we will do about it, let him attend the debate tomorrow and take part in it.


Mr. Riis:: Mr. Speaker, I rise on a separate point of order. I believe that under Private Members' Business for today there has been an understanding among the Parties that while we will proceed with Motion No. 104 standing in the name of the Hon. Member for Burnaby (Mr. Robinson), we will spend a moment to deal with another Private Member's initiative as well. Perhaps we could get a clarification before we get too much further into today's business.


Jean-Robert Gauthier: Mr. Speaker, if I understand the Hon. Member's point, I think the Member for Gatineau (Mrs. Mailly) has a Private Members' Bill in which she wants to change the name of her riding. She has consulted with me and I believe with the NDP. I do not know the Government's position, but we are ready to facilitate any passage of that Bill quickly tonight, if she so desires and wants to proceed with it.


Nelson Andrew Riis: Mr. Speaker, that is the offer we are prepared to make, with the understanding that it would not necessarily cut into the time allocated to the Hon. Member for Burnaby. However, to facilitate the request of the Hon. Member for Gatineau (Mrs. Mailly) to change the name of her constituency, the understanding is that we will take a moment to comment in order to facilitate her request. If that is the case, I would like not to see the clock so as at least to allow the one hour allowed for the Private Members' Motion of the Hon. Member for Burnaby.
July 21, 1988


Mr. Lewis:: Mr. Speaker, I understand that those discussions have taken place and that there has been full and proper notice to all Members of the House that the Hon. Member for Gatineau (Mrs. Mailly) wishes to proceed at that time.
While I cannot speak for Members of the House as to what might take place, I can speak for the Government in saying that whatever takes place we will ensure that a full hour of debate is given to the Hon. Member for Burnaby (Mr. Robinson).


Mr. Malepart:: Mr. Speaker, this is a point of order or a question of privilege, you choose! In answer to my colleague, the Parliamentary Secretary and Hon. Member for Chambly (Mr. Grise), I am open to any proposal to give the people an opportunity for a democratic debate and a chance to decide on the Mulroney-Reagan agreement, because I find it unfair that a small group of Conservatives in the House of Commons will force such an important Bill on the people of Canada without consulting them.


CANADA REFERENDUM AND PLEBISCITE ACT
Mr. Patrick Boyer (Etobicoke-Lakeshore) moved: for leave to introduce Bill C-311, an Act respecting Referendums and Plebiscites in Canada on Questions of Public Importance.


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


Some Hon. Members:: Agreed.


Patrick Boyer: Mr. Speaker, on a morning when there is controversy in Parliament and the country about whether a specific question such as free trade ought to be submitted to a general election or to the other place, the Senate, I am happy to be able to introduce for first reading a Bill that would point to a third way. The national referendum and plebiscite Act, or La loi Canadienne sur les referendums et plebiscites, is a complete code providing for the holding of referendums and plebiscites in Canada.
This Bill is certified in order, seconded by my colleague, the Hon. Member for York East (Mr. Redway). It runs to some 363 pages and attempts to deal in every respect, whether with broadcasting, fairness of publicity, spending limits, and all of the issues that are important to fair and unsullied expression of direct public opinion.
In my view, it is high time that we had such a statute that would give that third option for direct expression of popular opinion. I am happy to bring this Bill before the House this morning for first reading.
Petitions


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

Nelson Andrew Riis: Mr. Speaker, it is indeed an honour and privilege again to present a petition on behalf of a number of constituents who are of the opinion that the federal Government has no mandate from the people of Canada to conclude this trade deal with the United States.
They believe that Canada's sovereignty would be seriously compromised. They believe that this deal would undermine our ability as a country to build a society distinct from that of the United States.
They go on to outline all of the reasons why they think this is a bad deal for Canada. I wish the Government would listen to them, do the honourable thing, and call an election.
The petitioners are asking that Parliament dissolve now to allow the people of Canada to accept or reject the proposed trade deal during a national general election.


Mr. Jim Jepson (London East):: Mr. Speaker, it is my honour and pleasure to present a petition pursuant to Standing Order 106 from a number of Londoners who call upon the Government to pass legislation that will protect the life of the unborn child from conception and at all stages of development, with the exception of the extremely rare situation in which an abortion is performed in order to save the life of the mother.


Patrick Boyer: Mr. Speaker, I have the honour to present a petition signed by some 25 citizens from my constituency and elsewhere. It is certified pursuant to Standing Order 106 and pertains to the Memorandum of Understanding entered into between the Department of Justice and the Procurator General of the U.S.S.R. It relates to the prosecution of war criminals and seeks, through this petition, that the Government of Canada would broaden the terms of that Memorandum of Understanding to include not only Nazi war criminals but all war criminals who may be resident in Canada at this time.


Mr. Iain Angus (Thunder Bay-Atikokan):: Mr. Speaker, pursuant to Standing Order 106 I have the honour and privilege to present a petition signed by a number of residents of the community of Atikokan. It is one of a series of petitions I have tabled in the House.

July 21, 1988
Order Paper Questions
The petitioners are concerned that the community of Atikokan and the immediate area were not included in the northern residents' tax deduction. They call upon Parliament to take specific action.
I am pleased to indicate that on August 8, the task force set up by the federal Government will be in the community of Atikokan to hear representations from those citizens. Hopefully, Rene Brunelle and his crew will agree that they have been unfairly treated and will include them in the northern tax deduction.


Mr. Rod Murphy (Churchill):: Mr. Speaker, I have received petitions from constituents, mainly from the City of Thompson and the Town of The Pas. These people are concerned with the Government's attempt to pass Bill C-33 which they believe will deindex pensions of federal public servants who now have complete inflation protection through full indexation to the Consumer Price Index.
[DOT] (M40)
Whereas increasingly in the private sector, pension plan agreements have been negotiated by such unions as the Canadian Auto Workers, the Canadian Paper Workers, and the International Association of Machinists, and now include an indexing to the Consumer Price Index formula as the best means of protecting the members' pensions; and whereas the Ontario Government, which has responsibility for 70 per cent of all private pension plans in Canada has passed legislation calling for inflation protection for Ontario pension funds and has now received the recommendation from the Friedland task force that such protection take the form of linkage to the Consumer Price Index as the best possible method of achieving this; therefore, the undersigned, your petitioners, humbly pray and call upon Parliament to reject Bill C-33 as regressive, unfair, untimely and against the best interests of public servants and all Canadians, and that Parliament affirm full indexation to the Consumer Price Index as the model for inflation protection for all Canadians.


Jean-Robert Gauthier: Mr. Speaker, I have two petitions to table pursuant to Standing Order 106, and they contain the names of people who are strongly opposed to the trade agreement concluded between Mr. Reagan and the Prime Minister (Mr. Mulroney).

The petitioners humbly submit that the Mulroney Government has sold out Canada which has received nothing in return, that Canadian industries are still not protected from U.S. trade laws, that the United States obtained everything it wanted in all key sectors, especially agriculture, energy, auto trade, financial services and investment, that thousands of
Canadian jobs are threatened and that the Conservative Government has not provided for any adjustment assistance for Canadian workers. Therefore, the undersigned petitioners humbly pray and call upon Parliament to denounce the Government for signing the Canada-U.S. Free Trade Agreement on October 4, 1987. This petition is signed by dozens of Canadians.


Mr. Jean-CIaude Malepart (Montreal-Sainte-Marie):: Mr. Speaker, I also have petitions to table on behalf of people from all the regions of Canada, including Quebec, Ontario, Toronto, Montreal, Vancouver and the Maritimes. The petitioners unanimously oppose the agreement signed by the Canadian Government, the agreement that has been called "a horse, a rabbit". You know, Mr. Speaker, the Free Trade Agreement.
These people disagree with the Canadian Government, and are opposed to the passage of the agreement by the House of Commons. I am convinced that the petitioners would agree with the Liberal leader in demanding an election on such a fundamental issue.


Richard Grisé: Mr. Speaker, if Question No. 325 could be made an order for return, that return would be tabled immediately.


Mr. Deputy Speaker:: Is it the pleasure of the House that question No. 325 be deemed to have been made an order for return?


Some Hon. Members:: Agreed.


Mr. Harris: 1.	For (a) 1986 (b) 1987, has there been any Government spending in Newfoundland and Labrador and, if so, in what amounts in each constituency by each (i) government department (ii) government agency (iii) Crown corporation involved?
2. For (a) 1986 (b) 1987, were government expenditures or contributions made in Newfoundland and Labrador under the various ERDA and ERDA sub-agreements and, if so, for each constituency, what amounts were spent and, by program and project, what is the (i) amount of the contribution of the Government (ii) amount, to the knowledge of the Government, of any contribution by the provincial Government (iii) name of each company involved (iv) amount invested by each company receiving financial assistance (v) number of jobs provided (vi) cost per job?
Return tabled.


Richard Grisé: Mr. Speaker, I would ask that the remaining questions be allowed to stand.


Mr. Deputy Speaker:: Shall the remaining questions stand?
July 21, 1988


Some Hon. Members:: Agreed.


Mr. Deputy Speaker:: I wish to inform the House that because of the Minister's statement, Government Orders will be extended by 22 minutes beginning at 1:00 p.m. today.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Wednesday, July 20, consideration of the motion of Mr. Wilson (Etobicoke Centre) that Bill C-139, an Act to amend the Income Tax Act, the Canada Pension Plan, the Unemployment Insurance Act, 1971, the Federal-Provincial Fiscal Arrangements and Federal PostSecondary Education and Health Contributions Act, 1977 and certain related Acts, be read the second time and referred to the Standing Committee on Finance and Economic Affairs; and the amendment of Mr. Garneau (p. 17724), and the subamendment of Mr. Boudria (p. 17770).
Mr. Deputy Speaker:: We will resume debate on Bill C-139 with the Flon. Member for York-Scarborough (Mr. McCros-san).


Mr. W. Paul McCrossan (York-Scarborough):: Mr. Speaker, I appreciate this opportunity to speak on the tax reform Bill today and to explain some of the benefits of the Government's tax reform legislation. All Canadians benefit from tax reform, either from having their own taxes lowered or through the increased economic activity that will flow from an improved, more efficient and more equitable tax system.
Previous speakers in this debate have examined various aspects of tax reform. As both a member of the Standing Committee on Finance and Economic Affairs and as Chairman of the government caucus Health and Welfare Committee, I would like to look at how our comprehensive tax reform package provides significant benefits to Canadian families. Most important, tax reform means that Canadians will pay lower taxes this year than they did in 1987. Tax reform will reduce personal income tax for eight out of 10 Canadian households and for almost nine out of 10 Canadians over the age of 65. In other words, about 9.7 million households will enjoy an average tax cut of almost $500.
As well, Canadians will generally find their provincial income taxes reduced in the nine provinces that have tax collection agreements with the federal Government. Quebec has also made a number of changes to allow residents of that province to benefit from our tax reform measures. I said that Canadians will "generally find their provincial income taxes reduced'' because there is one province where the provincial Treasurer has taken some action to pre-empt the tax benefits that should be flowing to the residents of that province. I refer, of course, to the Finance Minister, Mr. Nixon, of Ontario, who introduced increases in taxes to take away the benefits that
Income Tax Act and Related Acts
would flow to families in Ontario before they could be received.
Most individuals are already benefiting from higher take-home pay. As of July 1, most pay cheques are larger, reflecting the reduction in taxes as a result of tax reform. Further adjustments in taxes, of course, will occur at year end. Tax reform will also mean a fairer tax system. The key to improving the fairness of the system under tax reform is replacing a number of the old system's exemptions and deductions with tax credits.
Tax credits are fairer because they directly reduce tax payable. This means that a tax credit is worth the same to all Canadians regardless of their level of income. By contrast, under the old system, exemptions were of greater value to people with higher incomes because they reduced the amount of income subject to tax at the higher tax rates.
As a result of converting exemptions to credits, approximately 850,000 lower-income Canadians will have their federal personal income tax reduced to zero. Converting exemptions to credits will provide important financial benefits to Canadian families in a variety of ways. For instance, under tax reform, the married exemption will be converted to a credit. This will benefit many households where the second spouse has a modest income from part-time work or small investments. Currently, the married exemption is reduced by one dollar for every dollar of net income earned by a spouse above a threshold. As a result, a part of the earnings of the lower-income spouse are effectively taxed at the rate applicable to the higher-income spouse.
With tax reform, this inequity will no longer exist. The first $27,500 of income earned by the low-income spouse will be subject to tax at the federal rate of 17 per cent. The conversion of the married exemption to a tax credit thus removes the tax penalty that can now discourage a second income earner from entering the labour force. The new married or equivalent to married credit of $850 represents a significant increase over the old exemption. Indeed, for most Canadians, the new credit is equivalent to an exemption of $5,000 or $1,260 more than the old exemption would have been worth this year.
More than two million lower-income families will benefit from the higher refundable sales tax credit, the increase to $70 from $50 for adults and $35 from $25 for children. The family net income threshold at which the credit begins to be reduced has been raised by $1,000 to $16,000. These measures will protect lower-income Canadians from the impact of interim changes to the federal sales tax as part of the first stage of tax reform.
The refundable sales tax credit will be significantly enriched and extended to more Canadians in stage two of tax reform when the current federal sales tax will be replaced with a new sales tax. Many families, and single Canadians, will also benefit from the changed treatment of education expenses. The current education expense deduction will become a tax credit

July 21, 1988
Income Tax Act and Related Acts
of $10 per month. In addition, the deductions for tuition fees will be replaced by a tax credit of 17 per cent of post-secondary tuition fees. Quite importantly, the unused portion of the first $600 of these credits can be transferred to a supporting parent, spouse or grandparent. This is an important new feature. Before tax reform tuition fees could only be claimed by the student, even when the student did not have sufficient income to benefit from the use of the exemption.
Under tax reform the income level at which families start paying tax will rise. The increased value of personal tax credits raises the tax thresholds. That is the main reason that the 850,000 lower-income Canadians I mentioned earlier will have their income tax cut to zero.
For example, this year a couple with one earner and with two children will not pay any federal income tax until their income reaches $18,890. This compares with a threshold before tax reform of $16,770.
After presenting the original White Paper proposals the Minister of Finance (Mr. Wilson) consulted with Canadians and gave the tax reform proposals to the Finance Committee which made a number of recommendations for improvements. Many of these improvements increased benefits for families with children.
For example, the refundable child tax credit was increased to $559 as of January 1 of this year. The dependent child credit, which replaces the old exemption, was set at $65 per child. However, for the third and subsequent children the tax credit was doubled to $130. The credits were also made available for the full year in which the child turns 18. A dependent child is now able to earn as much as $2,500 before the credit begins to be phased out.
While I have been dwelling this morning on benefits to families, it is fair to point out that a number of these increases were recommended by the Finance Committee and, indeed, the means to pay for them was also recommended by the Finance Committee in its report. The money has come from imposing effective taxes, alternative minimum taxes, for the first time on our large financial institutions. In this way banks, trust companies, life insurance companies, property and casualty insurance companies and real estate companies, which effectively for the large part have been paying no taxes whatsoever on their profits for the last 10 years, will indeed pay taxes under tax reform. By and large these taxes are being used to finance these family benefit tax credits to which I have been referring.
The Minister of National Health and Welfare (Mr. Epp) also announced the Government's new national strategy on child care last December. By doubling the maximum child care expense deduction to $4,000 for each child who is six years old and under, and by introducing a supplement to the refundable child tax credit for those who do not have receipted child care expenses, we have increased substantially the level of tax assistance for parents.
Many families will also benefit from the improvements we have made to a number of the old deductions. The new
medical expense credit will provide similar tax relief to all taxpayers with uninsured medical expenses. The charitable donations credit improves the tax incentive for the vast majority of Canadians to make larger donations. The improved disability credit not only is fairer to people at all income levels, it also increases tax assistance for the majority in the 17 per cent bracket. Greater fairness is being achieved by converting the deductions for the CPP/QPP contributions and UI premiums into credits of 17 per cent.
When one combines our tax reform measures with the improvements in tax assistance announced as part of the child care policy, it is clear that this Government is committed to improving the well-being of Canadian families.
If Members opposite share the Government's commitment to the Canadian family, they can show their support by voting in favour of this Bill to implement our tax reform proposals.


Mr. Deputy Speaker:: Are there questions or comments? The Hon. Member for Ottawa Centre.


Mr. Cassidy:: Mr. Speaker, I would like to ask about fairness and therefore will ask a rather technical question of my friend who is also a member of the Finance Committee. I ask this question because I think it is a serious issue which is difficult to ventilate in the House of Commons.
In the House of Commons we have been talking about the unfairness of Conservative tax reform and the fact that while taxes on many families are down from last year, according to the tax reform, they are up from 1984. The only people who have tax cuts from 1984 under Tory tax reform are people earning over $100,000 per year.
Because of the fact that the Hon. Member and I worked together on this matter I would like to remind him of the report of the committee with respect to the issue of the proposed anti-avoidance rule. The Hon. Member for Scarborough will recall that the committee rejected the Government's proposed new anti-avoidance rules. It rejected them because of the feeling that we would be into a period of six, seven or eight years of turmoil before the courts began to define more precisely what the new anti-avoidance provisions meant. There was a feeling, which I believe the Hon. Member shared, that a large part of the problem was not the legislation but the lack of aggressiveness of the Department of National Revenue and, perhaps, the Ministry of Finance in actually pursuing avoidance transactions under the present law. We felt that the present law could be changed modestly in order to make it more effective.
I wonder if the Hon. Member can comment on the Government's determination to ignore the advice of the elected representatives, which came from all Parties, and which was offered not just by the New Democratic members or by the Liberal members of the committee but by the Progressive Conservative members as well. Can the Hon. Member comment on the failure of the Government to look seriously at the proposed anti-avoidance provision which the committee recommended and which was based, if I recall correctly, on submissions which we had from experts such as the Bar Association and chartered accountants?
July 21, 1988

The Hon. Member will recall the fact that, after the Ways and Means Motion which contained the draft legislation was made public in April, the joint committee of the bar and of the chartered accountants came back before the committee and once again told us categorically, and 1 think constructively, that it thought that the proposed legislation was wrong. It said that it would create enormous problems and that, far from stopping anti-avoidance devices and dodges being used by different companies, speculators and people in the stock market, in fact it would create more problems than it would solve.
I recognize that many of the people who are active in the tax committee of the bar and of the accounting profession are some of the people who are advising private plans on these avoidance schemes. However, in listening to the testimony I was convinced that they were, nonetheless, and regardless of a potential conflict of interest, not trying to leave Parliament and the Government boxed in but that they were speaking to loopholes and running room which had been created for them by a lack of aggressive action and enforcement.
Will the Hon. Member comment on how he can support this Bill when in this particular area which, in the end, is so offensive to average Canadians, the Government, in an excess of zeal, has created probably a weaker instrument than it could have had with the existing legislation had it been reinforced?


William Paul Joseph McCrossan: The Hon. Member for Ottawa Centre (Mr. Cassidy) has raised two points. The first point he raised had to do with the level of taxes paid under tax reform. The second point had to do not with anything 1 said but with matters we heard in the committee with respect to the antiavoidance rules in the tax legislation. I will deal with both points separately.
With respect to the level of taxes which will be paid, I think that the Hon. Member has arrived at a false conclusion. His conclusion is false, and demonstrably false, as a result of the details which were provided to the Finance Committee. It is false in respect to two separate areas.
First, he indicates that in general taxpayers earning over $100,000 will pay less tax under the new system than under the old system. I categorically reject this. Indeed, all the evidence presented to the Finance Committee also rejects the same assertion. The Hon. Member rather conveniently ignores the large number of tax references which have been closed out which were largely utilized by these people making over $100,000. Indeed, the distribution of taxes provided with the tax reform package indicates that, of the 20 per cent of Canadians who will pay higher taxes, and as I recall it will average in excess of $500 a year more in taxes, it is concentrated largely with those earning $100,000 a year as a result of the much fairer and systematic elimination of loopholes and curtailment of tax preferences.
Second, the Hon. Member makes the sweeping assertion that Canadians will pay more taxes as a result of what I
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believe is a misinterpretation of figures. I certainly would not want to suggest it was a deliberate misinterpretation. However, one of the things I have noticed is that the Hon. Member has a tendency to look at the trend in personal income taxes. Since that trend has been going up over the four years, he has come to the conclusion that the level of taxes has gone up significantly over the four years including tax reform.
In his calculations the Hon. Member made the significant omission of looking at the increased number of people who are participating in the workplace as a result of the very large drop in the unemployment rate that has taken place under this Government.
Therefore, one cannot look at the trend in personal income tax collections and divide it by the population and state that the average taxpayer is paying more. One has to look at the number of people who are working and paying taxes rather than collecting unemployment insurance or welfare.
With respect to the second point of the Hon. Member, the general anti-avoidance rules in the legislation, in part I agree with the Hon. Member. Following the tabling of the draft legislation, I would agree with him that the Canadian Bar Association and the Canadian Institute of Chartered Accountants did appear before the committee and did indicate that they had serious reservations about-


Michael Morris Cassidy: In the strongest terms.


William Paul Joseph McCrossan: -the general anti-avoidance rules. It is fair to say that those reservations were in part shared by members of the committee from all Parties. Today we are looking at second reading of the Bill which is approval in principle. There is no principle involved in this Bill with which I have any problem. However, when the Bill gets to committee, which I would hope will be in the next day or two, I hope that once again we would call experts in the field of the antiavoidance provision to see if we can come up with a better anti-avoidance provision which legitimately curtails tax avoidance schemes, but at the same time is not so arbitrary as to create such a large degree of uncertainty that business cannot effectively plan without seeking extensive tax rulings in advance of any major transaction in Canada.


Nelson Andrew Riis: Mr. Speaker, I listened with interest to the speech of my hon. colleague on tax reform. It was an interesting speech, but I think the Hon. Member missed the point on a number of occasions in describing exactly what has happened under the so-called tax reform of the Conservative Government. It is now well known that while the tax system has been changed rather than reformed, it has been somewhat deformed. If the tax system was unjust before the Conservatives examined it, it is now more unfair; if it was discriminatory against the poor, it is now more than ever discriminatory against the poor; if it advantaged the wealthy, it now more than ever advantages the wealthy; if it was a complicated system before, it is more complicated now.

July 21, 1988
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The best reference that I have read relating to the Conservative Government's view of tax reform is "Robin Elood in reverse". Rather than take from the rich and give to the poor, tax reform for the Conservatives is take from the poor and give to the rich. Very clearly, the beneficiaries of the tax reform of the Conservative Government are those Canadians who are the wealthiest Canadians. Once again, the rest of Canadian society has been hammered and hosed through this tax reform package so that more than ever they are paying more taxes now than when the Conservative Government took office.
If one totalled all the tax increases that the average Canadian family has experienced under the Conservative Government, for example, income tax increases, gasoline tax increases, and sales tax increases of one type or another, it would be found that, compared to September, 1984, in September, 1988, the average Canadian family will be paying $1,000 more in federal taxes under the Mulroney Government. That is an absolute tragedy. In all the communities of Canada it means that that $1,000 per family is not circulating in the community from business to business and person to person to keep the local economy going.
There are tens of thousands of people in our country who need shelter or affordable homes. The only shelter the Conservative Government is involved with is sheltering taxes for the various wealthy Canadians. "Tax shelter", is what the Government means when it talks about "shelter". There are dozens of tax shelters technically designed to assist the Canadian economy, but in reality they result in a handful of rich people becoming richer.
Together with a number of my colleagues in the New Democratic caucus I have the privilege to work on Tax Probe 1986 which began in 1986. For two years we travelled the country and talked to tax experts on the East Coast, in central Canada, on the Prairies, on the West Coast, and up into the North. We talked to every conceivable person we could find who was interested in talking about how to reform the tax system. We asked the questions: "As a tax expert, what tax loophole is a good one?" "As Mr. and Mrs. Tax Expert, which tax loophole would you say that Canada is getting good value for?" "If it costs the taxpayers of Canada $500 million of lost taxes, how much do we gain from that in addition to the tax loss?" There was not one single tax accountant, tax lawyer, or tax adviser who was prepared to stand up and say that a certain tax loophole is good for Canada. Certain tax loopholes are good for some people or a handful of investors, but when asked if they were good for Canada, not a single expert was prepared to say they were.
I am not prepared to say that there is not a good tax loophole, but after two years of searching out the nooks and crannies of the country and examining page by page the
complicated tax Act, we could not find a single tax loophole that made economic financial sense.
How can one summarize the Conservative view of tax reform? At the top of the list is this puzzling question that has been put to the Minister of Finance (Mr. Wilson) so many times that it has become a boring question. The question is: "Under your tax reform system, how is it that 60,000 profitable corporations do not pay a single penny in income tax?" Presumably the Minister of Finance is proud of what he has done to the tax system to improve it, but he allows 60,000 profitable companies to pay not a single penny in income tax. That is to say nothing of the thousands of companies that might pay $10 or $50 in income tax a year, but those 60,000 profitable corporations do not even pay five cents.
They are not small companies, or companies that we call the "Mom and Pop Shops" of Canada. In some years they are companies such as the Royal Bank of Canada. In other years it will be the Bank of Montreal, Cadillac-Fairview, General Motors, or Shell Oil. There are 60,000 corporations that do not pay anything.
We have said that it is time that that changes, that it is time that we start building some fairness into our tax system. If we are going to build fairness, it means that those corporations that are very profitable should be paying their fair share. They should not be paying more than their fair share but just their fair share. I noticed that in the United States, back in 1986, the President introduced a tax law that requires every profitable company in the United States to pay at least a minimum corporate tax of 20 per cent. That was accepted in the United States as fair and reasonable. That was accepted by large, small and medium-sized corporations as the decent thing to do, so that they would be able to pay their fair share. After all, their profits and so on were coming from a country and an economy where they obviously were benefiting, and they felt that 20 per cent minimum was a fair corporate tax.
Does our Minister of Finance (Mr. Wilson) do the same thing in Canada? Unfortunately not. He is not prepared even to touch that aspect of our tax system. I say that that is wrong, unjust, unfair and discriminatory, particularly against the people of Canada and against the small business sector of Canada.
As our well-known friend, John Bulloch, who heads the Canadian Federation of Independent Business, has indicated, our tax system is discriminatory against the small and medium-sized business in Canada. They pay their fair share and they pay what is a reasonable amount of tax, in some cases too much. They have to pay more than they should, because the large profitable corporation in some cases pays zero. We are saying that that is reflective of an unfair tax system.
July 21, 1988

Now, one can go on and speak on the personal side of the tax system. Under tax reform, the stockbroker in downtown Toronto who might make $200,000 a year will save $15,000 under Mr. Wilson's tax reform. He will save $15,000 because his rates have gone down, and yet, there are hundreds of thousands of people whose incomes rank below the poverty line who still pay income tax.
Young families struggling to get established, working hard, receiving a very modest income, pay income tax, pay $50, $100, and yet tax reform means that the stockbroker who makes $200,000 is going to save $15,000 this year on his or her income tax. That is the kind of unfairness that is perpetuated by this tax reform picture.
My dad is nearly 83 years old. He worked all of his life, saved modestly so that he could have a decent pension. He has to pay taxes on a small savings account. My dad, 83 years old, pays more income tax in some years than the Royal Bank of Canada. My dad pays more taxes in some years than Shell Oil. That is wrong. Who could sit here and say that this is a good system, that this is a fair system? My dad does not feel that way.
The tax returns that most of us have tried to fill out in the last few months, in that annual ritual where we sit awake late at night, night after night, with dictionaries and calculators and sheets of paper, trying to figure out what our tax bill should be that year, is an ordeal. I look forward to it in most years with some terror. I know that as simplistic as it seems to be, it inevitably ends up with weeks and weeks of agonizing. You finally sit down at your table and pull it all together and send it in, and it always comes back changed. They always change it. The tax minions look over your return and find that you have been a few cents out here and there, or you missed a space there, and you get a redone return mailed back.
Fifty-one per cent of Canadians cannot fill out their own tax returns; they have to pay somebody to do it. Fifty-one per cent of tax filers have to go to a third party to fill out their tax returns. Well, that is not right. It is not necessary. Under tax reform we have seen the system complicated even further.
Some members of the Finance Committee are here today. They will remember that the Finance Committee examined a simplified tax return. We studied this for some months. We looked at what other countries do, and we found that for the majority of Canadians a single-page tax return would be all that is necessary. About 10 lines, that is all that is required. With that, about 70 per cent of Canadians would not have to look forward to this annual tax return horror show every spring.
Did the Government introduce that? No, it did not. There are pages and pages of tax returns that have to be filled out now by the average Canadian. Well, you will look through the lists and lists and you will ask yourself what this tax reform has done to us. Is it Robin Hood in reverse? Is it tax shelters not for the homeless but for the wealthy? Is it tax reform not for the needy but for the greedy? Those people that have are
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going to get more. The average family in this country is paying an extra $1,000 in federal taxes.
Now, there are some changes. I would like to look through a list that we have compiled as to what we think should be done in terms of our tax system. At the top of the list would obviously be a tax system with a more simplified return so that Canadians would not have to agonize each spring while they fill out their tax return, with some exceptions. Obviously, if you have a complicated investment portfolio you will have to go to some pains to fill out that tax return. But for the average working Canadian man and woman, that is not necessary.
We would also like to see the structure of our tax rates examined and that a higher top rate be imposed. After all, is it not reasonable to expect that someone who makes a great deal of money should pay at a higher tax rate than someone who is making money that classifies him or her as living below the poverty line? In other words, the more you make the more you should contribute to the country where you make that money.
We are also concerned about what is taxed. I think a lot of people assume that wherever you make your money you pay the same tax. That is not the case. If you make your money speculating in property or in gold stocks or whatever, you do not pay the same tax as someone who is working in an office or a factory or a mine or a mill. We classify that kind of money differently. We say that you do not have to pay on all of that income. As a matter of fact, up to a certain level you do not have to pay any tax at all. So if you speculate on the Hong Kong Stock Exchange and you make good money on an annual basis, you do not have to pay any tax on that, no tax whatsoever. Why not? You have a capital gains allowance of up to $100,000. If you do, you only pay tax on half of the capital gains, not on a dollar.
What I am saying is that, depending on how you make your income, you pay different kinds of taxes. That is not fair. We say that capital gains ought to be exempt for people running small businesses or are family farmers, because that is the way that they provide for their retirements and so on, but not generally speaking. A buck should be a buck. That is going back to the Carter Commission many years ago. The suggestion at that time was that if we were going to have tax we should tax people on a buck being a buck, and not a buck being 50 cents for some people.
I think that all Members of Parliament would agree that the family farm has to be protected because that is the way people provide for their retirement years, and similarly the family business. I am not talking about General Motors in this case; I am talking about people you see as you walk up and down the main streets of Canada, running their independent businesses.
There are other changes that we have suggested. We are very concerned, in regard to the new tax being planned called the national federal sales tax, about the decision by the Government to impose now a sales tax on everything, every business transaction.

July 21, 1988
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An Hon. Member:: Even the haircuts.


Nelson Andrew Riis: When you get a haircut, as my hon. friend from Vanier reminds me, you will pay a new Mulroney sales tax. When you go out and buy a new shirt, when you have your laundry done, when you go to the movies, when you fill out your will, no matter what you do, every single business transaction in this country, large or small, will be taxed.
For the first time in history we are going to have a federal sales tax. It might be called something different, it might be called a value-added tax, it might be called a business transfer tax, it might be called a national sales tax, but whatever it is called it will be a national sales tax that will be imposed on every man, woman and child in this country.
My friend from Fraser Valley is asking what it will replace. I will tell you. We do not pay a national sales tax now when we go to the movies. We do not pay a national sales tax now when we have a will made. We do not pay a national sales tax now when we get a haircut, but we will be paying it. That is part of tax reform. I think that has been part of the tax reform that has been largely overlooked. I do not hear many Conservative Members talking about the new national sales tax that tax reform will impose on every Canadian citizen.


Jean-Robert Gauthier: It is the second shoe.


Nelson Andrew Riis: It is the second shoe, clubbed by the first one and then we will be booted by the second one.
How do we derive our revenues? Not many years ago, Mr. Speaker, you will recall that the amount of revenue which the federal Government collected from individuals and the amount collected from the corporate sector was about balanced, 50-50. Fifty per cent came from corporations and 50 per cent came from individuals. Over the years there has been some shifting as a result of successive Liberal and Conservative administrations.
If you look at those two sources of revenue now, 82 per cent comes from people and 18 per cent comes from corporations. That is the change. Who are the winners in this? The people of Canada have been taxed and taxed again. Under this Government, under every Budget it has imposed more taxes, more taxes and more taxes. There is a breaking limit, and for many Canadians we have reached that breaking limit now. People are saying that they are fed up and they will not pay any more income tax. They say they will find ways and means of avoiding the taxman or woman. So the underground economy begins to work. If you are a dentist, maybe you will fix some lawyer's teeth who will do some legal work for you and things will get done on a barter basis-


Mr. Horner:: That is cheating.


Nelson Andrew Riis: -or on a cash basis with no receipts. Someone will come in and fix my plumbing for cash and there will be no record of that. Consequently, the price that work can be done
for is much less than normal. We all know that. Someone goes out into the woods and cuts a load of wood for fireplaces. He brings it into town and wants to be paid in cash, not because he wants to go out and buy something necessarily at that moment but because there will be no record of the transaction, and no tax has to be paid. The most recent estimates today would say that our underground economy in Canada is worth about S30 billion a year easily. Maybe it is significantly more than that. But that is what happens when people start losing confidence in the tax system. I suspect that for increasing numbers of Canadians that is where we are today.
In February and March of each year when you look into the book shops of Canada, what are the most sought after publications? What are the best sellers? They are books entitled, "How to Avoid Tax", "How to Defer Taxes," and "How to Shelter Taxes". People realize that our system today is unfair. It is discriminatory and unjust. Therefore, people say, "Well, if he does not pay any tax at all and is able to avoid all income tax, why not me?" That is a fact.
I am pleased to say the Minister of Finance (Mr. Wilson) had the courage to stand up the other day and say that there are hundreds and hundreds of wealthy people who pay nothing in income tax year after year, to say nothing of the 60,000 profitable corporations which pay no tax. When the small business person sees a large corporation like the Royal Bank of Canada paying not a penny in tax and a stock broker friend down the street paying no income tax year after year, people lose faith in the system. That is why we have called for at least a minimum tax on profitable corporations, not excessive, but a modest, minimum tax, so once again we can start building fairness and justice into our tax system. People will then not think of our tax as one designed for the greedy but one that is designed and composed for the needy.


Mr. Gagnon:: Mr. Speaker, I found the discourse very interesting in the sense that the Hon. Member for Kamloops- Shuswap (Mr. Riis) said that Canadians are being taxed, taxed and taxed. I agree. But I find it somewhat ironic that it is the New Democratic Party and his Party's policy to increase social spending. We brought out a child care program for $6.3 billion, yet his Party said that it was not enough, that more money was needed. The Member does not seem to understand the relationship between spending money and having to tax. Money does not grow on trees. It does not fall down like manna. You have to have taxes.


Michael Morris Cassidy: What about submarines?


Paul Gagnon: Let us look at some numbers. Since 1961, which is a quarter of a century or 25 years ago, the cost of living has increased 313 per cent, whereas the tax bill for the average Canadian has increased over 1,000 per cent. We have escalating taxes because society, and the Hon. Member's Party in particular, is calling for more and more things out of the Government. Somewhere there has to be a breaking point.
July 21, 1988


Michael Morris Cassidy: The Liberals couldn't manage things.


Paul Gagnon: The Hon. Member and his Party always want to talk about the class welfare system. Do it to the rich. The underprivileged are not being looked after. I would like to put a few things on the record, Mr. Speaker.
Let us look at who pays income tax. The bottom 50 per cent of taxpayers pay 5 per cent of the income tax and the top 10 per cent pay 50 per cent. People who are making money are paying a fair and a handsome share of the taxes. Some may argue maybe that they are paying too much, but we are trying to increase the taxes on the financial community which has not been paying its fair share to balance things out and have the poor pay even less. As I pointed out, the 50 per cent at the bottom are paying only 5 per cent.


Nelson Andrew Riis: Mr. Speaker, I appreciate the intervention by my hon. friend from Calgary. While I appreciate his intervention, I do not agree with any of it.
First, the Hon. Member for Calgary North (Mr. Gagnon) said that somehow the New Democrats have caused all of these programs. I want to remind him, much to my chagrin, that the New Democrats have not formed the Government of Canada yet. We plan to. But the Hon. Member is talking about successive Conservative and Liberal administrations- not New Democratic administrations. It has been his Party and the Liberals who have brought us the kind of tax system we have today. I am pleased at least that the Hon. Member thought somewhere along the line that the New Democrats had formed the Government of Canada, and I hope his wish is fulfilled in the next few weeks.
The Hon. Member asks where we are going to get the money to provide for important social programs like child care. I offer two suggestions. One, his Government says that it is imperative and absolutely necessary to spend $12 billion on nuclear hunter attack submarines.


Mr. Darling:: Eight billion dollars.


Michael Morris Cassidy: Sixteen billion dollars, actually.


Nelson Andrew Riis: A colleague says $8 billion. Some people say $10 billion, some people say $12 billion and some even say the amount could go as high as $25 billion. Let us forget how many billions. That is what the Conservatives want, nuclear hunter attack submarines. That is the Government's decision, and it has a right to make that decision.


Some Hon. Members:: Right.


Nelson Andrew Riis: I would rather see $2 billion or $3 billion additional going into child care. If the Conservatives want to say to the people that they want nuclear attack submarines-which even the Americans do not want us to get now, the Pentagon said it is stupid-that is fine, but we say, rather than nuclear attack submarines, let us have something for the children of this country so that every needy young child in this country is cared for properly. That is what we say should be a priority.
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We differ, Mr. Speaker. That is fair enough. My hon. friend from Calgary asks, where else can we get the money? The Hon. Member did not mention the 60,000 profitable corporations like General Motors, the Royal Bank of Canada, the Bank of Montreal and the rest of those 60,000 that do not even pay a penny in income tax. Can you imagine, Mr. Speaker, what our revenue would be like if we were to ask those corporations to pay what Ronald Reagan has asked American corporations to pay, a 20 per cent minimum corporate tax? Imagine the hundreds of millions, the billions of dollars, that would be collected to pay for those programs about which the Hon. Member is concerned. There seems to be an easy solution to this dilemma. If we have a just and fair tax system, the revenues will be there for these much needed programs.
The Hon. Member's friend from Nanaimo whose Householder I released the other day said that he thought the notion of nuclear attack submarines was bizarre. He said he thought this was a silly way to spend taxpayers' money. I agree with him. I think he is a very sound Conservative Member.
I suspect that if the people around here were more honest and asked themselves if they actually thought we should spend billions and billions of dollars on nuclear hunter attack submarines, they would say no. However, they cannot say anything because they are back-benchers. They are caught with the peculiar notion of the Minister of National Defence (Mr. Beatty), however, and they will have to justify that in the upcoming campaign.
I appreciate the intervention of my hon. friend from Calgary, as usual. It was a thoughtful intervention. I disagree with him, but at least I appreciate the opportunity to respond as well as I can to his questions.


Mr. Kilgour:: Mr. Speaker, like the Hon. Member for British Columbia, I want a fair tax system as well, and I share his concerns about the many corporations that are not paying taxes. I also agree with him that the Hon. Member from Nanaimo is a very sound Hon. Member.
I happen to have been born in Manitoba, and unfortunately, we saw that before the NDP Government of Manitoba was voted out of office, it increased taxes very, very substantially on people of average and lower than average incomes. Similarly, it raised the auto insurance premiums by about 35 per cent.
Does the Hon. Member plan to follow the leadership of his former colleagues in Manitoba? Does he plan to follow the leadership of the Mitterrand Government which raised taxes and nationalized banks, a number of things his own Party is calling for nationally? The result of that, as the Hon. Member well knows, is that the franc fell practically through the basement, unemployment went up and the Mitterrand Government had in effect to repeal itself within two or three years of taking office.

July 21, 1988
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The rhetoric is fine, and I am sure many people agree with the rhetoric. It is the action that we on this side of the House are worried about, and I think Canadians generally are worried about that action, bearing on the experience of the Hon. Member's Party in Manitoba.


Nelson Andrew Riis: Mr. Speaker, actually I am delighted to have a chance to respond to the Hon. Member. My hon. friend from Edmonton reminds me of the auto insurance situation in Manitoba. I know that the Hon. Member is astute and is knowledgeable about the insurance business for a whole variety of reasons. As a result, he would know that virtually the lowest auto insurance rates in Canada are in the Province of Manitoba.


David Kilgour: Saskatchewan.


Nelson Andrew Riis: I said virtually. Saskatchewan, of course, has had auto insurance for some time. Manitoba was following suit with what has to be described by any progressive-minded Canadian as the decent thing to do. Of course, auto insurance rates that are the lowest in Canada are in those provinces that have public auto insurance. This is because there is not a major profit motive involved in something that every Canadian citizen must have. Yes, I support that.
One can ask whether or not the rates charged ought to have jumped up by 40-some per cent on an insurance plan that is virtually one of the cheapest in Canada. 1 suppose that politically, that was not a particularly wise decision to take at that time. However, the decision was taken and for that reason I am concerned.
The Hon. Member referred to France and to the fact that France has a socialist Government. I suppose none of us in this room would be here if we did not believe in the fundamental principles of democracy. We would not be here if we did not believe that in the end, it is the collective wisdom of the people who decide who their Government ought to be. We in Canada are going to go through that exercise shortly, and in France they have just gone through that exercise.
After a number of years of Mitterrand's socialist Government, the Government went to the people and said that the people will now choose whether or not they want to give Mitterrand another seven-year mandate. The people of France spoke out at the voting booths. They said that yes, on balance, after looking at the policies of Mitterrand, policies similar to those that the New Democratic Party would consider for various sections of our own country, they agreed. Not surprisingly, the people of France re-elected President Mitterrand for another term.
That is the ultimate way of evaluating how effective a Government's programs and policies are. We will be doing that in our country soon. The people of Canada will evaluate the tax system that the Government has put into place, the tax system that I have described accurately, and I hope adequately, as being a system that is unjust and obviously biased and
discriminatory and increasingly more complicated. The people will also have another choice. I indicated clearly in my presentation that there are a whole set of alternatives being suggested by the New Democrats. We are suggesting a tax system that would be fair and that would tax income in a fair, just and equitable way. Those are the choices that will be put rather simply to the people of Canada and they will have an opportunity to make those choices very soon, I hope.


Mr. Deputy Speaker:: Resuming debate. The Hon. Member for Montreal-Sainte-Marie.


Jean-Claude Malépart: Mr. Speaker, I welcome this opportunity to take part in a debate that is important because it affects all Canadian taxpayers, including middle and low-income earners, men and women, those working in industry, and so forth.
The purpose of the tax reform, and everyone in Canada agreed that changes were necessary, was first of all to reduce income tax and other taxes paid by taxpayers; second, to ensure that any citizen, whatever his income, or any corporation that receives services in Canada should pay his fair share, and third, to simplify the process. If we look at the legislation before the House, it has failed to meet these three objectives.
First of all, Conservative Members and the Prime Minister (Mr. Mulroney) want us to believe, as when they told senior citizens they would not touch old age pensions, that personal income tax and other taxes will go down. That is not true. And I intend to prove it isn't because the Government has done a bit of manoeuvring, and if we compare 1984 to 1988, in 1988 it is going to cost taxpayers $26.7 billion more in income tax and other taxes they will have to fork over to this Tory Government, which means 62 per cent, while it will cost corporations only $2.6 billion or 28 per cent. Is that the promised balance between personal income tax and corporate tax? Why are taxpayers paying more income tax in 1988 than they did in 1984? Simply because the Government de-indexed the tax tables, which means de-indexation of personal exemptions and personal income tax.
For a family, it meant that family allowance and the child tax credit were de-indexed. It meant that the ceiling below which middle-income families were eligible for the child tax credit was lowered, and it meant eliminating the tax exemptions that could have been converted into a tax credit for families with children between the ages of 16 and 18, when children continue their education.
The Tory Government wanted more than just a bite out of our weekly pay cheque. Every week or every two weeks when people get their pay cheque, another tax credit has been cut, which means that for every $3 we now have only $2 left just because the Conservative Government has taken that dollar out of our pay cheque.
July 21, 1988

But the Government didn't stop there. It took a different approach, more hypocritical and less open, reflecting the style of our Prime Minister (Mr. Mulroney). It used indirect taxes.
First we had three increases in sales tax on October 1, 1984, on January 1, 1986 and on April 1, 1986, from 9 per cent to 12 per cent. This means that every time consumers in Quebec and across Canada make a purchase, they are paying an additional Tory tax on all goods. This is a hidden tax. It doesn't show because the Government has already collected the tax from the manufacturer.
The Government didn't stop there. Gas was next, and what is more important than gas? Gas isn't just something you put in your tank to go on a holiday, to go for a drive. In Quebec, manufacturing is concentrated in the large urban centres, which means that essential products such as food, clothing and construction materials have to be shipped by truck. And trucks run on gas, which they need to deliver the goods to people in remote areas. And the same is true across Canada.
And the Tory Government, despite the fact that its gas expert promised to defend Canadian consumers in Ottawa, this Tory Government increased the price of gas by 23 cents a gallon. On September 3 1985, two cents a litre; on January 1, 1987, another cent; on February 19, 1987, another cent; and on April 1, 1988, one more cent. Mr. Speaker, all these increases in the tax on gas mean that when we open a bag of bread, drink a glass of milk or eat meat or fruit or vegetables, or when we buy curtains to decorate the house, the price increase doesn't go to the manufacturer or to the distributor. This is just another Tory ploy to increase the revenues of the Government. So much for the tax on gas.
But there is more. What about the tax on alcohol and tobacco, which has raised millions for the Government? But there are other examples, and I think the most shocking one, was the Prime Minister's failure to keep his promise to senior citizens. Last week, I had the honour and the pleasure of having lunch with Mrs. Solange Denis, the woman who said out loud on Parliament Hill what senior citizens were thinking, the woman who said: "Charlie Brown, you lied to us!". They remember. There is not one person in Canada, not one senior citizen who doesn't remember that the Prime Minister's word cannot be trusted. All senior citizens know perfectly well that the word of Tory Members cannot be trusted because they have already been cheated once, and it got to the point that senior citizens came to Parliament Hill and, as I said at the time, put down their playing cards and took up their placards to come and demonstrate to defend their rights.
However, the Government decided to increase the tax burden even more, reducing the purchasing power of Canadian taxpayers in the process. First of all, it put a sales tax that wasn't there before on soft drinks, snacks, manufactured construction materials and even on long-distance calls, Mr. Speaker.
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In the areas outside Montreal, the telephone is essential. If a child has an accident and his parents have to make a longdistance call to reach a doctor, there is a Conservative tax on each long distance call. I am talking about people in remote areas of Quebec, where Conservative Members were elected, Members who did not stand up to defend the population on such an essential service.
There is a tax on wallpaper, but what really tops everything is the tax on drugs. The Prime Minister and the Conservative Government discovered that they could make money on the backs of the sick. When it discovered that drugs were not taxed, this Government decided to go ahead and tax them- just imagine, no one is safe ... This medication isn't taken for the common cold, but by people suffering from cardiovascular diseases, respiratory illness, or diabetes.
Just as we did for the elderly, the Liberal team-smaller in number but a quality team nonetheless-had to band together with interest groups to force this inhuman and heartless Government to back down and withdraw the tax on drugs that are essential for survival. Unfortunately, the Government maintained its taxes on other drug products. This means that for the Conservative Government, a cold winter is a lucrative one-the more children with colds, the more children with the flu, the more money it makes, because it collects a 10 to 12 per cent tax on cold medications.
I have clearly demonstrated that there is no tax reduction for taxpayers and that their purchasing power is vastly diminished, because for each product they purchase they must pay the Conservative tax, either because of transport, or because of the sales tax on all the products that were not taxed previously and which the Conservative Government decided to tax.
I would now like to talk about the issue of fairness. In spite of the document we have before us today, there are still some 60 multinational corporations that will manage to benefit from advantages provided by the Federal Government and yet will not pay one cent of tax. And those businesses are not to be found in the Montreal-Sainte-Marie riding. These are not small family-run businesses where you have the father, the son and the wife all working hard-not the small car-repair shop or gas station-these are large multinational companies that are very close to the Prime Minister and whose representatives go to dinners at $5,000 and $10,000 a plate, and have managed to convince this Government to let them continue to abuse the system and continue to get off scot-free, without paying one cent of tax.
We saw figures again recently that showed that there are more than 5,000 people with incomes of $50,000 or more who do not pay tax, and others earning $100,000 or more who also pay no tax at all. Like middle and low-income earners, those people have the right to use health insurance and drug insurance programs; each one of us pays his share for those programs and we are forced to pay for the rich.

July 21, 1988
Income Tax Act and Related Acts
There you have proof that there is no fair treatment for everyone-corporations, the highest income earners, families and individuals with middle and low incomes-another failure. This reform has not achieved its objective.
As for simplifying the paper work, we expected, from what the Prime Minister gave us to understand, that people would find it much easier to fill out their tax returns. Mr. Speaker, here again, nothing has changed because the objective of simplifying paper work has not been met and tax forms have not been simplified, nor has the objective of eliminating tax loopholes for the rich; those loopholes still exist.
What should the Government have done? First of all, instead of granting a $500,000 exemption to the rich, while at the same time deindexing family allowances for low and middle-income families, rather than spending millions of dollars to bring in blue uniforms for the Armed Forces, it would have been preferable to continue helping our families.
But spending $16 or $17 billion for nuclear submarines is to my mind the greatest scandal of them all. Imagine that, Mr. Speaker-Canada decides that it could be under attack from two enemy countries! What countries are they? There are the Americans to the south and the Russians to the north. What weapons do those countries have? The Americans and the Russians do not just have two or three tanks. They do not have just one or two submarines, they have thousands. All of a sudden, our Canadian "Rambo", our new hero, decides to buy 16 submarines for a showdown with the Americans. He thinks that the American fleet will come here to Canada and want to get through. Then our "Rambo", our dear Brian, will jump into his submarine and say, "Hold on! If you shoot, I'll shoot!" Mr. Speaker, that is money wasted, poured down the drain!
We in the Liberal Party say no way will we have those 16 nuclear submarines. We won't do it. But what would we do with that money? With just one submarine, we can lower the pension age to 60 for all needy persons. Mr. Speaker, I am sure that your constituents in Duvernay, if asked, would rather lower the pension age to 60 than buy a single nuclear submarine. What would we do with the second submarine? We would put more money into day care and create more spaces. That takes care of two submarines and the money would help real people. What about the third and fourth nuclear submarines? What would we do with them? We would use the money to clean up the environment. We need it for the quality of life. That makes four submarines saved and many jobs for lots of people and better public services. What would we do with the fifth submarine? Our farmers in Quebec are penalized. Our farmers across the country need assistance, research and other such things.
So we would use the money from the fifth submarine for our farmers throughout Canada. There are still many submarines left for which the money could be spent in other ways. We could use the sixth and seventh submarines to establish a real family policy. Canada's number one problem is the low birth rate. What do Canadian families need? What do young couples need? Well, the sixth and seventh submarines could be
used to fully index family allowances, to increase the child tax credit for middle- and low-income families, to follow the example of a good Liberal Government in Quebec and give $3,000 for the first, second or third child to help couples.
Mr. Speaker, don't you think that the voters in your riding would prefer a family assistance and support policy to two nuclear submarines that will waste their time in the Arctic?
What would we do with the money from the eighth and ninth and additional submarines? First of all, we could use the money from two of them right away to reduce the deficit and stop the fussing inside the Government. But we also have our seniors, the elderly of today and tomorrow. What do our seniors most need, in addition to an income? What does every Member of Parliament hear from seniors? They do not want to go and live in an old age home. Seniors, even at 80 or 82, are in good physical condition and want to live at home, but they need help. Mr. Speaker, at 82, you cannot wash the ceiling and the walls. So we Liberals would use the money for the seventh submarine to set up a nice national program with the provincial Governments for home support, medical assistance, things people need, not submarines!
Young people, Mr. Speaker! We had programs that helped young people and we could take the money from the eighth submarine to help youth. What do our young people leaving high school, college or university need? They need work experience, because when they apply for a job, companies ask them if they have experience. Without it, they do not get work! So they go back to studying. Well, we could have a program like the one lawyers have; a lawyer works in the field for a year before taking the bar exam. We could take the money from a nuclear submarine to give every student a year of practical work experience with companies across Canada, whatever the occupation, be it engineer, architect, lawyer, notary, machinist, construction worker or docker, Mr. Speaker.
Another important aspect is the problem these days of people 30 to 55. Today, 40-year-olds who have a specific training see their working world upset by technological change. They see that they do not have an indexed pension plan; they do not even have a private pension plan. Well, we could take the money from two submarines to give these people with work experience phased-in retirement, Mr. Speaker.
How many 50-year-olds say to themselves, "My children are grown, my house is paid for, but I cannot stop working five days a week. But I could work three days a week and I would train a young person." That is what I was just talking about.
This is an overall policy for quality of life. That is what the Liberals will be fighting for in the next election campaign, a quality of life program. Quality of life begins at home. You want quality of life in your home, on your job, in your environment, around your house, in the air you breathe.
I conclude with that and I would hope that the Conservative Members will answer my questions. Why would the Hon. Member for Duvernay (Mr. Della Noce) rather have the
July 21, 1988

Government waste $16 billion on nuclear submarines than use that money to lower the pension age to 60 for all seniors or for a home support program for seniors or to help young people or families? Why does the Hon. Member for Duvernay not want to defend the interests of these people? Why has the Hon. Member for Duvernay, unlike the time when he was head of the gas station owners in Quebec, allowed his Government to use gasoline as a way to get more tax from drivers or not tried to stop it, Mr. Speaker?
Mr. Speaker, I conclude and I would hope that some Conservative Members will wake up as the election approaches; otherwise, their time in Parliament will be short.


Mr. Deputy Speaker:: The Hon. Member for Duvernay (Mr. Della Noce) on a question or comment.


Mr. Della  Noce@: Mr. Speaker, I want to thank you for this opportunity to respond since the Hon. Member was so kind as to refer to me several times. What he said, however, was highly inaccurate, and I must say the Hon. Member for Montreal- Sainte-Marie likes to hear himself talk. And in fact he talks a blue streak, as they say. And that is because when his Party was in power, the Hon. Member, the very same, was not only not talking, he was absolutely struck dumb on the subject of Quebec's problem with gas prices.
And speaking of gasoline, I will give the Hon. Member a short course on gas, off the cuff. He said we increased taxes. And so we did. We had to reduce the deficit. Yes, we raised the price by five cents a litre. But let me tell you, that even if the Conservative Party increased taxes on gas, consumers are paying less than they were paying when you were in power. Back then they were paying 60 cents per litre, and today they are paying 52 cents. Today, every time consumers go to get gas in Quebec, they think of me. And they save $9.
Another thing the Hon. Member didn't mention was heating oil. It was 40 cents when his Party was in power. Today, heating oil is 20 cents per litre. We all have homes. And everybody needs a home. We don't need children-


Jean-Robert Gauthier: It's not the Government's fault!


Mr. Della  Noce@: The Hon. Member for Ottawa-Vanier (Mr. Gauthier) says it's not the Government's fault. Mr. Speaker, it was the Liberal Party that introduced the National Energy Program.
I hope the Hon. Member is going to listen, because he might learn something. I did my calculations yesterday. If the Liberal Party were in power today and if we had maintained the Liberal Party's National Energy Program, oil would be $66 a barrel and gas would be 77 cents at the pump.
Talk about inaccurate, look at the Hon. Member who talked about $16 billion for the submarines when they will cost only $8 billion over a period of 25 years, which boils down to less than $300 million annually.
Income Tax Act and Related Acts
To answer the Hon. Member's question, $300 million per year, $8 billion for the submarines will cost less than repairing the scrap they left us. And the same applies to gas and the tax on gas. The Hon. Member conveniently forgot to mention this. He forgot to say that we abolished the Petro-Canada tax, the 7/10ths of a cent tax his Government introduced to build gas stations to compete with independent retailers like myself, using taxpayers' money. And what did Petro-Canada do for Canadians, Mr. Speaker? Did it give them a better price? No. Did it give them better service? No, they all have self-service operations. Did it create jobs? No, but it gave independent retailers ulcers. That is what your policy did for Canadians.


Jean-Claude Malépart: Did you sell?


Mr. Della  Noce@: No, because I outlasted Petro-Canada. I am stronger than Petro-Canada. In my area, Petro-Canada didn't last.
Mr. Speaker, in concluding, what did the Liberals do for Petromont in the Hon. Member's riding? They buried it. That is what the Liberals did. It took a Conservative Party to invest millions in the area. They should be ashamed to talk about energy. They should be ashamed to talk about energy when I am in the House, because of what they did. They killed the industry, and today if it were not for this Government, Canadians would be paying 77 cents per litre, gasoline would be $66-


Mr. Deputy Speaker:: The Hon. Member for Montreal- Sainte-Marie (Mr. Malepart), who I imagine will wish to reply.


Jean-Claude Malépart: Mr. Speaker, I see I have just woken up the former chief gas pump attendant from Quebec! But the erstwhile chief pump attendant from Quebec just admitted his failure. He just admitted that he fought Petro-Canada, but that Petro-Canada has increasing control under the Conservative Government. He just admitted that if it were not for the Conservative Government, if it had had more backbone, consumers would only be paying 47 cents a litre for their gas, because there was a five cent a litre tax increase under the Conservatives. Mr. Speaker, he just admitted his personal failure, because his main reason for getting into politics was to make Petro-Canada toe the line. Petro-Canada has become stronger and stronger throughout Canada. He wanted to ensure that the Conservative Government would stop taking small retailers hostage, Mr. Speaker. It is even worse under the Conservative Government than it was under the Liberal regime. Within four years, this Government has slipped an additional 23 cents' tax on a gallon of gas, and the chief pump jockey has been silenced as thoroughly as a car with a brand-new muffler.

July 21, 1988
Income Tax Act and Related Acts
Mr. Speaker, that is what has been happening and the population will remember. When I travel through Quebec, people say to me: Where is the head pump attendant who was fighting Petro-Canada and going to trials? We never hear from him anymore, Mr. Speaker! Well, I can tell you, the population ... I know a foxy old politician, Mr. Maurice Bellemare, who is not a Liberal. He always used to say to me: Jean-Claude, the first election is easy to win, because you can promise anything, you can say anything you like. But the second one is more difficult to carry off, because people are going to say to you: Why didn't you do what you said you were going to do?
I think there are certain Members... he seemed nervous this morning and I think that what I said made him jump. I don't think it was the oil keg he's been sitting on, but what the people of Duvernay have been saying, Mr. Speaker. This has allowed me-


Mr. Della  Noce@: Petromont!


Jean-Claude Malépart: 1 did not think that the Member for Duvernay (Mr. Della Noce) approved. I thought that at least on this issue he would not agree with his Government's plan to waste money on nuclear submarines. I would never have thought that the Member for Duvernay would have stood up in the House to say: I'd rather spend money on nuclear submarines than on the plight of the elderly.


Mr. Della  Noce@: Point of Order, Mr. Speaker.


Mr. Deputy Speaker:: The Hon. Member for Duvernay (Mr. Della Noce) on a point of order.


Mr. Della  Noce@: I would like to point out to my Hon. colleague that aside from blathering on he is exaggerating again as I am not necessarily in agreement with any expenditure, but 1 do agree that $8 billion-


Mr. Deputy Speaker:: Order! That is not a point of order.
Questions and comments. The Hon. Member for Ottawa-Centre (Mr. Cassidy) has the floor.


Michael Morris Cassidy: I had some comments I would like to make for the benefit of the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart). Although I welcome his support for positions taken by the New Democratic Party, I get the impression that the Liberals who are now in the Opposition acted like Conservatives when they were in power. And I would like to ask the Hon. Member of Montreal-Sainte-Marie why, when he was a back-bencher on the government side, he remained silent? I agree that he made up for his silence to a certain extent in the four years from 1980 to 1984. But I did some research, and I was astonished when I realized that during that time, the Hon. Member for Montreal-Sainte-Marie did not speak more than 15 times in four years. Today, it's 15 times a week in the House of Commons, Mr. Speaker!
He said nothing about the recession in Montreal's east end during that four-year period. He said nothing about the impact
of rising interest rates, up to 22 per cent, on his constituents. He said nothing about the shipyards that were closing down because of a lack of contracts. He said nothing against the refinery shutdown which occurred under the Liberals when they were in power. He said nothing about the problems of workers over 40 during that time. Nothing was said by the Hon. Member for Montreal-Sainte-Marie about unemployment that was soaring between 1980 and 1984.
Mr. Speaker, about taxation, when the then Minister of Finance, Mr. MacEachen, proposed cuts in taxes on the rich, did the Hon. Member have anything to say? No, he said nothing! Not a word to defend the interests of the average taxpayer in his riding who would have to pay to make up for these cuts. Not a word in the House to object to the fact that tax shelters would be maintained and expanded under the Liberal Minister of Finance.
Finally, Mr. Speaker, I remember how he campaigned with the NDP against the deindexing of old age pensions. However, when he was a Liberal back-bencher , what did the Hon. Member for Montreal-Sainte-Marie do about the deindexing of Public Service pensions? Did he object to the six and five Program or to the cuts in old age pensions like the Hon. Member for Ottawa-Vanier (Mr. Gauthier)? Certainly not! The Hon. Member for Montreal-Sainte-Marie rose in the House to support the deindexing of old age pensions for retired public servants.
Why is it, Mr. Speaker, that the Hon. Member acted like a silent Conservative when his Party was in power, although he acts like a New Democrat now that he is in the Opposition?


Jean-Claude Malépart: Mr. Speaker, it is depressing to listen to the Hon. Member for Ottawa Centre (Mr. Cassidy). He reminds me of the Hon. Member for Duvernay (Mr. Della Noce), who as far as intellectual honesty is concerned ... There are some doubts about that.
Remember the frigates, when the Hon. Member for Ottawa Centre deceived the people of Quebec. He told them that an NDP government would renegotiate the frigate contract and bring it back to Quebec. His Leader contradicted him!


Michael Morris Cassidy: I made a mistake, and I admitted it in the House and outside the House.


Jean-Claude Malépart: Mr. Speaker, in politics, if you are intellectually honest, you don't tell voters what they want to hear. I think the Hon. Member for Ottawa Centre, as far as the space agency and the frigates were concerned, was playing his game the Conservative way, a little like the Prime Minister (Mr. Mulroney), like a snake. And I don't think he is going to win any votes that way. He doesn't know the difference between a Member on the Government side and a Member in the Opposition. To win a case ...


Michael Morris Cassidy: In power, the Hon. Member is silent!
July 21, 1988


Jean-Claude Malépart: -no, because in Manitoba, when the NDP Government raised automobile insurance premiums, the Hon. Member for Ottawa Centre didn't say a word.
I realize the Hon. Member for Ottawa Centre is upset about my success in fighting the deindexing of old age pensions. 1 understand why the Hon. Member for the NDP, who is used to playing political games in Quebec, is not getting a foothold there. 1 understand why the Hon. Member for Ottawa Centre is disappointed that I won the battle for 46,000 older workers, at a time when his Party was getting ready to throw in the towel. 1 understand why the NDP are disapppointed that they don't count in Quebec, and while the Liberal team is there, ready to defend the workers, the Hon. Member for Ottawa Centre runs around telling those workers: I'll ask a question. I'll make a statement under S.O. 21, and I'll send you a copy. I took part in a candidates' debate, and my NDP opponent said he wanted to defend the banks. A former vice-president of a national bank says that his main task is not to defend the interests of Laurier-Sainte-Marie but to persuade the NDP that banks are good the way they are and not to nationalize them.
The NDP's hypocrisy explains why it is always in the Opposition.


Mr. John R. Rodriguez (Nickel Belt):: Mr. Speaker, I can appreciate why the Conservatives are not speaking on this Bill. There is nothing to defend. I can understand their unwillingness to participate and defend this Bill which is supposed to reform taxation. I can understand their shame and why they cringe and why they will not speak on this particular Bill.
It seems to me that any tax system must have three aspects to it. The tax system must be fair. The tax system must be progressive. The tax system must redistribute. Ordinary Canadians look at this so-called tax reform and they have to ask themselves certain questions. The first question has to be, is this tax system fair? There is a cynicism which exists with respect to what has happened since the Conservatives came to power in 1984, with all the hopes Canadians had that we would have effective tax reform. After all, that was one of their commitments during the election campaign. But what happened in the first three years in Government? The Conservatives taxed and taxed and taxed. They did exactly the sorts of things that the Liberals used to do.
In the year in which an election is expected, we get this much-touted so-called tax reform. Having taken out of the pockets of the average Canadian family over $1,000 over the last four years, the Conservatives decided to return it to them in their pay-packets. The Government says it is taking less from these taxpayers. This is all scheduled to happen, of course, on July 1, 1988, the eve of an election.
That is the first cynical aspect. Second, this Government has protected its options for an election next spring. Because of the so-called tax cuts in the spring of 1989, Canadians will get back a refund cheque. The amount that was collected in the first six months of 1988 will be calculated with a higher tax
Income Tax Act and Related Acts
deduction. That is cynicism. All of these so-called loopholes the Government says it has closed, none of that comes into effect until 1991. That is the other aspect of the cynicism. That is well beyond the next election. Canadians who are perhaps more cynical than myself would look at that and realize the opportunism of this Government when it comes to tax reform.
The Government is not really interested in reforming the tax system. It is a shell game. There is a pea under the shell and the Government moves the shells around. That is the old game that is played at fairs right across this country. That is a shame because I think it really destroys the whole political process. In fact, the political process is really the arena to make moral changes. It is a place at which Canadians should be able to look and see hope for a better system, for an improved system. But when we look at this tax reform package which is embodied in this Bill we find it sadly lacking. For example, the average Canadian will look at this tax reform package and discover that three out of four Canadian families earning over $100,000 a year, who have already benefited from past Budgets, will receive yet another tax cut of $4,363 per year.
The ordinary Canadian has to ask why, after this much-touted tax reform, the rich will again benefit. Average Canadians will wonder why a family earning under $15,000 a year will receive a cut of only $100 a year. Ordinary Canadians will ask why. Why this unfairness in the way this Government deals with the wealthy as opposed to the poor? Why is it that we have to take from the poor to give to the greedy? I suspect that is part and parcel of the Progressive Conservative ideology. It is part of that ideology that believes in acquisition. This is an age of acquisition. If one cannot go out and get it, there is something wrong. It is there for personal gain. As long as I can get my share, I do not care about any one else. That is the mentality that is reflected in this so-called tax reform.
Ordinary Canadians will remember the promise of a minimum tax. They will ask themselves why there is not a minimum tax on corporations. Why are the wealthiest corporations in this country treated with velvet gloves? Small businesses, in fact create most of the employment, 80 per cent of the jobs in this country. All of those who work very hard in their small enterprises, and individual Canadians who work very hard at their jobs, will ask why this Conservative Government treats the large corporations so generously and treats them with such severity in terms of taxation. That is a good question.
Why is it that after the so-called tax reform package, 60,000 very profitable corporations will still continue to pay not a penny of tax? That is a question Canadians will ask. After all, if those 60,000 very wealthy corporations do not pay their share to keep this country-a country which allows those corporations to make their handsome profits-someone else has to pay. That someone else will be the ordinary Canadian and the small enterprise. Canadians will ask why. Why does this Government do that?

July 21, 1988
Ordinary Canadians will take a look at the statistics which show that in 1984, when this Progressive Conservative Government came to power, the percentage of taxes collected from the corporate sector was 20.3 per cent of all revenues collected by the Government. The latest figures in 1987 show that it is down to 15.5 per cent. So corporate taxes have been reduced in terms of total contribution to the upkeep of this country, and the percentage of revenues the Government has taken from ordinary Canadians in income taxes and sales taxes has gone up considerably. So ordinary Canadians and small enterprises are paying more percentage-wise to support the country while the large corporations' percentage continues to decrease. The Government boasts that after these tax reform measures that figure will rise to 17.2 per cent by 1991. Big deal. That is still about three percentage points lower than they contributed when the Government came to power in 1984.
Ordinary Canadians will read that statistic and say: "Why? Is that fair? Is any of it fair? Is fairness reflected in this Bill regarding income tax reform?"
I see that it is time for lunch.


Mr. Deputy Speaker:: It being 1.22 p.m., I do now leave the chair until 2 p.m.
At 1.22 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.

Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine East):: Mr. Speaker, the Canada-U.S. trade deal threatens the Canada that we know and love and as we have built it for more than 100 years. This deal will limit Canada's ability to take action in regional development, social policy, health policy, industrial and resource development, environmental protection, and culture.
Such a fundamental change was not discussed in the 1984 election, and consequently the Government has no mandate to proceed. This deal threatens our independence, sovereignty, and identity. It puts us into a massive alliance with the United States in which the United States will dominate.
If the Government is serious about the agreement, let it call an election and seek the approval of the people of Canada. The people have the right to decide.


FARM CREDIT CORPORATION
Mr. Elliott Hardey (Kent):: Mr. Speaker, today the Government once again demonstrated its commitment to Canadian agriculture. I am referring to the Minister of Agriculture's (Mr. Wise) announcement of $400 million to support the Farm Credit Corporation.
Farmers have learned that this federal Government will always walk that extra mile to ensure that producers get a fair deal. Support for agriculture has gone up by 400 per cent in the last four years. The Government has announced initiatives worth more than $9 billion in that period of time.
The Special Canadian Grains Program is the largest federal initiative in Canadian history. It has put $2.1 billion into the grain and oilseed farmers' pockets. There has been a record stabilization payment, and timely drought assistance.
The Government has ensured that Canadian farming is here for the long haul. Today's announcement will mean that the Farm Credit Corporation is here to stay, too.


CANADA-UNITED STATES FREE TRADE AGREEMENT-COMMITTEE HEARINGS
Rodney Edward Murphy: Mr. Speaker, as Members of the House of Commons, we have a duty to respect the rights of all Canadians, and to give full consideration to major issues which confront our country and, in particular, to those issues which would profoundly change the nature of our nation.
The right of all Canadians to share in democratic debates has been consistently denied by the Conservative Government in its rush to push the trade deal through the House of Commons in order to meet the mandate of the United States Government.
Hundreds of groups have requested that the committee travel and give them the opportunity to put forward their views on the trade deal that is before us. These people have all been denied their democratic rights by the Government.
The Government has ignored requests from groups such as the National Federation of Nurses, the National Council of Playwrights, the Canadian Teachers Federation, the Saskatchewan Tenants Association, the Toronto Workers Health and Safety Legal Clinic, the Catholic Family Services Bureau in Charlottetown, Prince Edward Island, the Canadian Conference of Catholic Bishops, the Conference Program Staff of the United Church of Saskatchewan, the B.C. and Yukon Women's Centre Association, the Co-op Atlantic, the Northwest Territories Federation of Labour, the Archdiocese of Regina and its Social Action Committee, the Federation of Women Teachers Associations of Canada, and the Toronto Theatre Alliance.
July 21, 1988

The Canadian people did not elect the Conservative Government to deny the history, traditions, and interests of Canadians, or to sell out to the United States. Specifically, the Canadian people did not give the Government a mandate to deny democratic rights. We need an election now on this issue in order that Canadians can be heard.


THE SENATE
Mrs. Mary Collins (Capilano):: Mr. Speaker, as a Member from British Columbia I am often accused of being from Fantasyland. Well, these days in Ottawa I feel more like Alice in Wonderland.
Here we have the Leader of the Official Opposition (Mr. Turner) abandoning the fundamental democratic tradition that it is the elected Members of Parliament who determine the public policies and programs of this country. He would, instead, hand this prerogative over to a group of Senators appointed by his predecessors and demand that they smother government Bills and force an election.
As The Globe and Mail so aptly editorialized this morning: "Surely the Senate lacks that right in this democracy and surely Mr. Turner should not have put the question on the table".
Surely even we from Fantasyland know a Mad Hatter when we hear one, and send regrets to his invitation to participate in this blatantly bizarre tea party.


CANADA-UNITED STATES FREE TRADE AGREEMENT-POSITION OF LEADER OF THE OPPOSITION
Mr. Len Hopkins (Renfrew-Nipissing-Pembroke):: Mr. Speaker, the Prime Minister (Mr. Mulroney) and the government Members are doing their best to blame the Senate for future holding up of the trade deal. They do not want to admit that they are afraid to go to the country and have Canadians pass judgment on the trade deal with President Reagan. There is nothing more democratic than to go to the people of Canada and to let all Canadians vote on the future of their country.
That is what the Leader of the Opposition (Mr. Turner) did yesterday; he asked the Senate to step aside and let all
Canadians have a chance to pass judgment on the Canada-U.S. trade deal.
It is not a free trade deal because Canadians will not have free access to American markets. It is not a free trade deal because when there is a dispute on any item or circumstance the agreement states that American trade law will be supreme, and Canadians will have to accept second best.
The Prime Minister knows full well, as do all Canadians, that the elected Leader of the Liberal Party has asked the Senate to allow Canadians to decide on this bad deal. The only person who is blocking the democratic rights of every Canadian is the Prime Minister of Canada, because he is afraid to call an election on the issue.
Even while in opposition the Liberal Party is standing up for the rights of Canadians to decide on the bad trade issue that even the Prime Minister and Minister of Finance (Mr. Wilson) said during the last election was an unthinkable thing to propose, and then they turned around and did the very opposite and did what they said they would not do.


THE SENATE
William Paul Joseph McCrossan: Mr. Speaker, as Member of Parliament for York-Scarborough I represent almost 300,000 people. How many constituents are represented by Senator MacEachen or Senator Kirby? It appears they represent exactly one person-the Leader of the Liberal Party (Mr. Turner), the Party that appointed them to the Senate in 1984.
Over the past two years Liberal Senators have been delaying vital legislation adopted by this House. The Leader of the Opposition has told the House that he could not be blamed since he could not control Liberal Senators. Today the truth is out. He had an option then to protect the elected representative Government. He failed.
He has the option of protecting our elected House today, and he is failing again. The sad fact is that each time he has an option, he fails.
Today he asserts the divine right of Liberal Senators to rule over elected Members by ordering the body of "sober second thought" to refuse to think. It is tragic to see a long-serving Member of this House subvert its authority merely to prop himself up for a few months longer.


S. O. 21 TRADE COMMONS DEBATES
[Stage Direction]
July 21, 1988

Ms. Marion Dewar (Hamilton Mountain):: Mr. Speaker, as Members of the House of Commons we have a duty to respect the rights of all Canadians and give full democratic consideration to major issues which confront our country, in particular to those issues which would profoundly change our country.
The right of all Canadians to share in democratic debates has been consistently denied by the Conservative Government in its rush to push the trade deal with the U.S. through the House. In spite of its massive majority, the Government has no mandate from the people of Canada to force this project through the House. Hundreds of groups have requested an opportunity to put forward their views on the trade deal presently before us. Many people have been denied their democratic rights by the Conservative Government.
The Government has ignored requests from groups such as the Diocese of Victoria Social Justice Commission in Victoria, B.C., Oxfam Canada, the Association of Canadian Publishers, the United Church of Canada, the Social Planning Council of Metropolitan Toronto, the Executive Secretary of the United Church in Winnipeg, and the Health Coalition of Cape Breton.
The Canadian people did not elect the Conservative Government to deny the history, traditions, and interests of Canadians, or to sell out to the United States. Specifically, the Canadian people did not give the Government a mandate to deny their democratic rights. We need an election on this issue in order that Canadians can be heard, and we need it now.


LEADER OF THE OPPOSITION
[Stage Direction]
Canadians are quite aware of that, but in your Party the discussion is still raging on as to who will be the leader during the next election campaign. In due time Canadians will have an opportunity to say where they stand with respect to this historic trade agreement.
Is the Leader of the Opposition justified to raise objections because Canadians have made peace with themselves and with their neighbour? Canadians have lost faith in you and in your Party. If you are unable to assume your responsibilities as an elected Member of the House, go!

Jean-Claude Malépart: Mr. Speaker, we have just heard the Hon. Member for Quebec-Est (Mr. Tremblay). His act was a total failure and his S.O. 21 motion was a disaster, Mr. Speaker. Instead the Hon. Member for Quebec-Est should look after the people of his riding who had their unemployment insurance benefits cut off, older workers who are told every week that the Quebec caucus will solve that problem.
Yesterday, Mr. Speaker, older workers from the Province of Quebec attempted to march into the office of the Minister of State for Employment and Immigration (Mrs. Vezina) at the employment and immigration office to seek justice.
Mr. Speaker, when I saw the Hon. Member for Quebec-Est rising and failing to stand up for his constituents, I did not suggest that he ought to go because I know that the people will get rid of him.


CHOICE OF STRATEGIES
Mr. Marcel R. Tremblay (Quebec-Est):: Mr. Speaker, I would be surprised if the senators were to do as they are told by the Leader of the Opposition (Mr. Turner) because he has no authority within his caucus, within his Party and, particularly, within the Canadian Senate. He never did control anything. You can give orders to your caucus, to the Liberal senators, to Mr. Robert, nobody listens to you anyway. You lack credibility, just as does your Party. You are panicking. You are losing your cool. You have to be in a very desperate predicament to behave like this.
You are asking the senators-these experienced men and women-to follow you. I happen to know that serious Liberal Senators will not buy this conniving approach. The legislative agenda and the date of the elections will be set by the Party in office. In our Party, the Leader, the Right Hon. the Prime Minister (Mr. Mulroney), faces up to his responsibilities and


CANADA-UNITED STATES FREE TRADE AGREEMENT-POSITION OF LEADER OF THE OPPOSITION
James Kenneth (Jim) Jepson: Mr. Speaker, I am still in a bit of shock, like most Canadians, over the unbelievable statement made by the Leader of the Liberal Opposition (Mr. Turner) yesterday, requesting the Liberal-dominated, unelected Senate to block the free trade Bill when passed by the democratically elected Members representing the people, namely, the House of Commons.
I cannot believe, after four years, the arrogance of Mr. Trudeau's and Mr. Turner's appointees to the Senate, who honestly believe that the Conservative Government has in some undemocratic fashion usurped their divine right to govern Canada.
July 21, 1988

What we heard and saw yesterday from the Leader of the Liberal Opposition was not leadership but the sounds of the death rattle of an opposition Leader and in a Liberal Party making one last desperate grab for political power in Canada. What a sad way to end a Leader in the Party's life in Canadian politics.

[ Translation]


DEMOCRACY
Michael Morris Cassidy: Mr. Speaker, as Members of the House of Commons, we have a duty to respect the rights of all Canadians and to give full democratic considerations to major issues which confront our country and in particular to those issues which would profoundly change our country. The right of all Canadians to share democratic debates has been consistently denied by this Conservative Government in its rush to push the trade deal with the U.S. through this House.
Mr. Speaker, in spite of its massive majority, this Government has no mandate from the people of Canada to force this project through the House. Hundreds of groups have requested the opportunity to put their views before the House of Commons, but this Government has refused them. The Government has ignored the request from such groups as the National Federation of Nurses, the Canadian Federation of Teachers, the Pro Canada Network of Saskatchewan, the Commission on Social Justice, the DSS of Victoria, Oxfam Canada, the United Church of Canada, the Toronto Council of Social Planning, the Jesuit Centre, etc.
Mr. Speaker, the Canadian people did not elect the Conservative Government to deny the history, but to protect the interests of Canadians, and not to sell us out to the U.S. They specifically did not give this Government a mandate to deny their democratic rights. We need an election on this issue so that Canadians can decide, and we need it now.


CANADA-UNITED STATES FREE TRADE AGREEMENT-CALL FOR GENERAL ELECTION
Mr. Brian Tobin (Humber-Port au Port-St. Barbe):: Mr. Speaker, there is a huge hue and cry and the sound of fury emanating from benches opposite, from Members who are aghast at a revolutionary new and startling idea in Canadian political life. Someone has dared to stand up to suggest that after years of having the politicians, the pundits, the power brokers making the decisions, the people of Canada should decide, and that concept frightens the Tory Party.


Some Hon. Members:: Hear, hear!


Brian Vincent Tobin: I tell you, Mr. Speaker, we have entered a stage. The debate has begun. The election has begun, and it is not going to be the politicians, it is not going to be the pundits, it is not going to be the power brokers, it is not going to be the elite, it is going to be the people of Canada who decide the future of this country.


Some Hon. Members:: Hear, hear!


Brian Vincent Tobin: If that idea be radical, if that idea be revolutionary, let the battle begin. Issue the writ and call the election.


Some Hon. Members:: Hear, hear!


LEADER OF THE OPPOSITION
Mr. Gabriel Fontaine (Levis):: Yesterday, Mr. Speaker, the Liberal Leader, a former Prime Minister of Canada, officially renounced the ability of the House of Commons to legislate. He told the non-elected Senators of the Liberal caucus to oppose the free trade Bill.
Often, when weak people have exhausted all human and intellectual resources, they surrender.
Never again will Canadians want as Prime Minister a Member of the House of Commons who has decided to abdicate the powers of this House. They will not want to have anything to do with a captain who has scuttled the ship of State. Come election time, they will surely not elect a Prime Minister who would get his orders from a Senate godfather, even if it were MacEachen.


CANADA-UNITED STATES FREE TRADE AGREEMENT-CALL FOR GENERAL ELECTION
John R. Rodriguez: Mr. Speaker, as Members of the House of Commons we have a duty to respect the rights of all Canadians and to give full democratic consideration to major issues which confront our country and in particular to those issues which would profoundly change our country. The right of all Canadians to share in democratic debates has been consistently denied by this Conservative Government in its rush to push the trade deal with the U.S. through this House. In spite of its massive majority, the Government has no mandate from the people of Canada to force this project through the House. Hundreds of groups have requested the opportunity to put their views before the House of Commons. This Government has refused them.

July 21, 1988
Oral Questions
The Government has ignored requests from the Catholic Family Services Bureau in Charlottetown, Prince Edward Island, the Canadian Conference of Catholic Bishops, the Conference Program Staff of the United Church of Saskatchewan, the B.C. and Yukon Women's Centre Association, the Co-op Atlantic, the Northwest Territories Federation of Labour, the Archdiocese of Regina and its Social Action Committee.
The Canadian people did not elect the Conservative Government to deny the history and traditions and interests of Canadians, or to sell us out to the U.S. They specifically did not give this Government a mandate to deny their democratic rights. We need an election on this issue so that Canadians can decide, and we need it now.
(Mr. Turner) was, as usual, somewhat inconsistent in his positions and decided to have the Senate, the Liberal-dominated Upper Chamber, block the free trade Bill. At the same time he is asking us to call an election to have the population elect a Government. We have a majority Government.
Mr. Speaker, this really makes me wonder about our democratic federal system. In my opinion, we are deceiving Canadian citizens when we ask them to vote for us.



ORAL QUESTION PERIOD


Mr. Arnold Malone (Crowfoot):: Mr. Speaker, the Minister of Agriculture (Mr. Wise) today gave a clear indication of the continuing role of the Farm Credit Corporation. The primary job of the FCC is to provide long-term mortgage credit to Canadian farmers on a cost-recovery basis.
The corporation is an alternative source of mortgage credit to average risk farmers. It is also a credit source for those farmers whose risk is marginally above that of average. The FCC is not about to reduce its level of service, but it will pay more attention to its bottom line. By monitoring and handling risks more effectively, the corporation will be better able to serve Canadian agriculture, now and for many years to come.
It is a telling fact that 96 per cent of the present farm accounts that are in arrears occurred in accounts that were started prior to the last election in 1984.


ELECTIONS
Mr. Nic Leblanc (Longueuil):: Mr. Speaker, as a Canadian, I must say that I was somewhat distressed by yesterday's event. The Leader of the Opposition and of the Liberal Party


CANADA-UNITED STATES FREE TRADE AGREEMENT-REQUEST FOR GENERAL ELECTION
Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, I have a question or two for the Prime Minister, but since he is perhaps on his way to Rideau Hall I will put them to the Deputy Prime Minister.


Some Hon. Members:: Oh, oh!


John Napier Turner: The Prime Minister has now had 24 hours to reflect-


Some Hon. Members:: Oh, oh!


John Napier Turner: -upon the proposition I put to him. He now understands that his contemplated trade deal with the United States will not happen until the people of Canada have had a chance to pronounce on it.
I say to the Prime Minister through you, Mr. Speaker, and through the Deputy Prime Minister, that there will be no trade deal with the United States until the people of Canada have had a chance to review the issue.


Some Hon. Members:: Hear, hear!


John Napier Turner: There are those who approve of my decision yesterday and there are those who disapprove of that decision.


Mr. McDermid:: 1 haven't had one phone call yet.


John Napier Turner: 1 will say to the Hon. Member for Brampton that he should not be here; he should be back protecting his backside in the constituency of Brampton.
July 21, 1988


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


John Napier Turner: He ought to reach back into the locker room and get Billy Davis out there to protect him. He will need him every minute.
The real debate has finally begun. I stand ready to abide by the people's decision. Is the Leader of the Government, the Prime Minister of Canada, ready to stand by the decision of the people and, if so, will he call the election now and let the people decide?


Hon. Don Mazankowski (Deputy Prime Minister and President of the Privy Council):: Mr. Speaker, 1 am sure that when the Prime Minister considers the date of the next election he will also be considering the comments that have been made responding to the unprecedented actions of the Leader of the Opposition which, in newspapers, were described as follows: blatant, wretched, hypocrisy, strange, desperate, sleazy, arrogant, squalid, and cynical. That is how the Leader of the Opposition's actions have been described, and 1 am sure that that will be taken into consideration when the request is made, Mr. Speaker.


Mr. Kaplan:: The media don't decide elections, the people do.


John Napier Turner: Mr. Speaker, let the people decide whether that vocabulary is accurate or not. 1 am ready to stand by the judgment of the people.


Ms. Copps:: Let's go, let's go!
[ Translation]


RIGHT OF PEOPLE TO DECIDE
John Napier Turner: Mr. Speaker, this agreement with the United States harms our farmers and they have the right to be heard. This agreement harms our textile workers and they also have the right to speak out. This agreement is bad for our business people and they have the right to speak out. This arrangement with the United States is bad for Canadians and all Canadians have the right to say so.
And so I put the question to the Deputy Prime Minister once again: Why not let Canadians decide?


Donald Frank Mazankowski: Mr. Speaker, what is happening is that a piece of trade legislation is going through Parliament in its normal process. It was the subject of a Royal Commission, a $23 million Royal Commission paid for by the taxpayers of Canada, chaired by a former colleague.


An Hon. Member:: Donald Macdonald.
Oral Questions


Donald Frank Mazankowski: The trade initiative is supported by eight out of 10 provinces, eight out of 10 Premiers. It is supported literally by every think tank and objective policy based bureau that study these things. It is supported by a majority of the House of Commons. It is going through the committee stage.
I find it incomprehensible that the Leader of the Opposition who has traditionally been a staunch defender of the House of Commons-and he is on record for that-would now subvert and circumvent the role of the House of Commons. He talks about being a great friend and a champion of the Right Hon. John George Diefenbaker. I can tell the Right Hon. Leader of the Opposition that Mr. Diefenbaker would not be very proud of him today.


Some Hon. Members:: Hear, hear!


John Napier Turner: I want to say one thing about Mr. Diefenbaker, Mr. Speaker. He was never afraid of facing the people of Canada. Nor am I.


Some Hon. Members:: Hear, hear!


John Napier Turner: There is one thing about the late John George Diefenbaker, he would never have sold out this country the way the current Prime Minister is doing.


Some Hon. Members:: Hear, hear!


DEPUTY PRIME MINISTER'S POSITION
John Napier Turner: The
real issue is the future of Canada. Our senior citizens have been hit by this trade deal. They have the right to decide. Our young people have been hit by this trade deal. They have the right to decide. Our grandchildren will be affected by this deal and their parents have the right to decide. Every Canadian is affected by this deal and they have the right to decide.


Sheila Maureen Copps: Let's go!


John Napier Turner: I ask the Deputy Prime Minister of Canada why doesn't he let the people decide?


Donald Frank Mazankowski: Mr. Speaker, Mr. Diefenbaker always defended the rights of the House of Commons first and foremost.


Some Hon. Members:: Hear, hear!


Donald Frank Mazankowski: He believed, as I believe, that the House of Commons has the right to pass legislation. The House of Commons has the right to bring forth legislation. No subsequent Parliament is tied to legislation that is passed by a previous Parliament. That is a pretty fundamental part of our democracy, Mr. Speaker.


Mr. Nunziata:: Brian is a wimp. He is more of a wimp than Joe.

July 21, 1988
Oral Questions


Donald Frank Mazankowski: I can tell you, Mr. Speaker, that Mr. Diefenbaker would have never sold his soul to the Senate, particularly to that bunch over there.


Some Hon. Members:: Hear, hear!


Donald Frank Mazankowski: I find his position somewhat hypocritical because in 1961 the right hon. gentleman, in calling it a political conundrum said:
The Senate, in terms of current facts, no longer plays a useful part in the government of Canada. Its historical purposes have been lost. It no longer operates (albeit through forces beyond the control of its own members) as a restraining influence on legislation. Its initial historical function, that of representing and protecting the rights and interests of provinces, was never discharged; and it is scarcely equipped with the necessary mandate for that role today. Consequently the argument for its abolition is difficult to resist.

[ Translation]


DEMOCRACY
Jean-Claude Malépart: Mr. Speaker, in the absence of the Prime Minister, I would like to put my question to the Deputy Prime Minister.
What we are talking about today is not John Diefenbaker's future, but the future of the Canadian men and women of today.
The Deputy Prime Minister may not be aware of this, but this week all the workers' representatives in Quebec are against the Mulroney-Reagan trade deal, because they think it does not provide sufficient job protection.
Can the Deputy Prime Minister tell us why the Prime Minister and the Conservative Government are denying workers the right to decide their future in a general election? Why is this right being denied to the men and women who work in the textile industry in the riding of Drummond, and to the men and women who work in the footwear industry in Montreal? Why not let these men and women speak out in a general election, rather than passing this agreement and forcing them to accept the result after the fact? Why are you afraid to let them vote first?


John Horton McDermid: Mr. Speaker, 1 find that absolutely incredible. The person who purports to represent all these workers in Canada showed up at committee this morning, made a statement indicating that she would not present one bit of evidence and then walked out, walked out of the committee. She did not give evidence at all. She grandstanded in front of everyone.
The labour movement is not interested in listening to the facts on this. It is supporting its socialist friends over there, that's all.


DEMAND FOR APPEAL TO THE PEOPLE
Jean-Claude Malépart: Mr. Speaker, if the representative of big finance wants to know whether the workers are interested in free trade, let him call an election and you will see how the workers vote! You have representatives of Quebec farmers here. They too are against this agreement. Can the Deputy Prime Minister tell us why does the Government not have the courage to let these farmers decide in an election before this project is accepted? Have you ever seen a collective agreement accepted over the workers' heads? Why do you not have the courage to have it accepted before, in an election campaign, right away?


Donald Frank Mazankowski: Mr. Speaker, there has been no Government in the history of Canada that has responded to the needs of the farmers as ably, capably, responsibly, and responsively as this Government.


Some Hon. Members:: Hear, hear!


Donald Frank Mazankowski: Since the hon. gentleman has joined with his Leader in a strange abdication of responsibility to the Senate, I would like to know from the Hon. Member what he will do with his Private Member's Motion that is currently standing on the Order Paper, which reads:
That, in the opinion of this House, the government should consider amending the Standing Orders so that a bill passed by the House, returned to the House by the Senate, with amendments, and sent back to the Senate with further amendments, shall be deemed to have been adopted by the Senate on the sixtieth day after receipt thereof, unless previously disposed of by the Senate.


Some Hon. Members:: Oh, oh!


Donald Frank Mazankowski: We are seeing across the way not only the final act of desperation but the champions of hypocrisy.


CANADA-UNITED STATES FREE TRADE AGREEMENT-WATER RESOURCES
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, I have a question for the Deputy Prime Minister, but I would like to say that it is more than a little amusing for Canadians to hear Liberals and Conservatives fighting with each other to see who can be most critical of the Senate. I have never known either a Liberal or a Conservative to turn down an appointment to the Senate. It would be interesting to see that.
July 21, 1988


Some Hon. Members:: Hear, hear!


John Edward Broadbent: Mr. Speaker, the Minister of Justice says that there is one Conservative. No doubt he has subsequently died, but there was one.
Two days ago, Mr. Mel Clark, former Deputy Chief Negotiator for Canada at the Tokyo Round of the GATT discussions, in very serious testimony before a House committee pointed out that in his view there is no doubt whatsoever that in the negotiated agreement between Canada and the United States on the matter of trade, water is indeed included. He has urged in the strongest possible terms that the agreement be amended to exclude the possibility of the exportation of water. Today a Gallup poll has come out showing 69 per cent of Canadians in total agreement with that position.
The Minister has indicated the possibility of accepting an amendment down the road. If government Members want to fulfil their commitment, and they have publicly said that they are not interested in having the exportation of water to the United States, will they listen to one of the most learned people on this subject in the country, our Deputy Chief Negotiator? Will they respond to the people of Canada who want it excluded and announce now their intention to bring in an amendment to this agreement?


Donald Frank Mazankowski: Mr. Speaker, in response to the preamble of the Leader of the New Democratic Party, might I just add in observation that it is interesting to see the NDP and the Liberals jockeying for last place in the public opinion polls as a result of the latest fiasco that has been going on.


Some Hon. Members:: Hear, hear!


Donald Frank Mazankowski: As long as the Leader of the NDP wants to quote experts, perhaps he might be interested in the expert testimony of Mr. Prank Stone, speaking on behalf of the Institute for Research on Public Policy, a pretty well established and credible organization. He said:
Water diversions have never been discussed in the GATT, and any suggestion that GATT covers water diversions or inter-basin transfers would be hooted down in Geneva by the GATT member countries.
He said as well:
But the Free Trade Agreement, whatever its merits and flaws, has nothing at all to do with the diversion or inter-basin transfer of water.
That has been enunciated time and time again in the House of Commons and outside the House of Commons. It is true that the Minister for International Trade, while clearly stating the fact that water is not a part of the free trade agreement nor was it ever intended to be nor was it discussed, in the interests of clarity said that if it is so deemed necessary or fit, or if a recommendation comes from the committee to incorporate a clarification, he would certainly look at it.
This Bill is being discussed in the committee. If, in the wisdom of the committee, it so sees fit to make these kinds of clarifications, they will certainly be considered.
___________________________________17851
Oral Questions COMMITTEE HEARINGS


John Edward Broadbent: Mr. Speaker, the Minister knows that the majority of members on that committee are Conservative members, the same majority who denied the right of that committee to travel from Newfoundland to British Columbia to listen to Canadians.
The Government says it is concerned about the serious matter of substance, of protecting our water from a future decision that could be made, according to our Deputy Chief Negotiator at the GATT who ought to know more about these matters than either the Deputy Prime Minister or I because he was there and knows the technical material. He says it is included. We want some government leadership, not to wait for a committee, on a commitment to change the agreement to protect Canadian water. That is the issue.
Considering that I have a list of some 450 groups of Canadians, including farmers from the Minister's province, lawyers from Alberta, fishermen from the Atlantic provinces and trade unionists-


Mr. Speaker:: I would ask the Hon. Member to put his question.


John Edward Broadbent: Mr. Speaker, these groups have indicated that they believe that this Accord profoundly affects the future of Canada and they want the opportunity to present testimony, not simply in Ottawa but where they live. Will the House Leader talk to the Conservative members of that committee and urge them to reconsider their decision not to have hearings, and go out and listen to the people of Canada on this matter?


Donald Frank Mazankowski: Mr. Speaker, the New Democratic Party was represented on the committee that brought about recommendations for parliamentary reform, and it brought forth a recommendation to establish legislative committees. As a part of that recommendation, it was clearly outlined that legislative committees would not travel.
If the Hon. Leader of the New Democratic Party is suggesting a change in the recommendation, then he should have made that recommendation to his representative on the committee because that has been the established practice. It is rather late in the day to be making those kinds of representations.
In so far as clarification of the water issue and providing leadership are concerned, the Minister for International Trade has clearly made the point that if there is a requirement for clarification with respect to the water issue, he would certainly consider such an amendment. I hope that the wisdom of the committee will prevail.

July 21, 1988
Oral Questions


John Edward Broadbent: Mr. Speaker, the Minister knows that if it were the case that a Standing Committee could not travel-


Donald Frank Mazankowski: It's not a Standing Committee.


John Edward Broadbent: A legislative committee, calm down. He says that a legislative committee could not travel. I am told that the Atlantic committee which was a Standing Committee did in fact travel-


Donald Frank Mazankowski: Standing.


John Edward Broadbent: -so there is precedent for it. It could happen, as the Minister knows, by unanimous agreement. He would have that agreement on this side of the House. If he wanted to do the democratic thing, he could have all Canadians give testimony on this Bill, and that is what the Government should do.


Some Hon. Members:: Hear, hear!


REQUEST THAT GENERAL ELECTION BE HELD
John Edward Broadbent: Mr. Speaker, the Government will not make a commitment to change the agreement on the important matter of water. It will not allow the committee to travel to the people of Canada to hear what they have to say. Will it at least give us a commitment that before we recess the Prime Minister will come into the House, dissolve Parliament, and go to the people?


Donald Frank Mazankowski: Mr. Speaker, if the Hon. Leader of the NDP wants to get involved in a procedural battle he had better let his House Leader do it because he is a little more conversant with the rules.
So far as committee travel is concerned, there have been other important issues before the House where the committees concerned have not travelled. There was no travel in the study of the Meech Lake Accord. There was no travel by the Constitution committee in 1980. It is rather strange that at this late hour the Hon. Leader of the NDP wants the committee to travel.
With regard to water, the Minister of International Trade made our position quite clear. If the Leader of the NDP wants an election, he will get an election, when it is appropriate.


John Edward Broadbent: When is that?


Donald Frank Mazankowski: I would suggest he go back-


Some Hon. Members:: Now!


Donald Frank Mazankowski: Maybe the Hon. Leader of the NDP should go back to his cottage and rest up a little more. He is going to need it.


GOVERNMENT POSITION ON WATER RESOURCES
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, my question is also directed to the Acting Prime Minister. As we heard, it was reported yesterday that 69 per cent of Canadians oppose the export of any fresh water to the U.S. Some 40 per cent, the greatest number in the poll, say that water is our most important resource. Experts have said that water is covered by the agreement.
Some Hon. Members:: Oh, oh!


William Warren Allmand: Engineers, scientists and lawyers have said it is covered by the agreement. Whether the Government meant it or not, it is clear that water is covered under the agreement.
How can the Government proceed with this agreement without a mandate from the Canadian people? How can it sell out our most important resource without the consent of the Canadian people?


Donald Frank Mazankowski: Mr. Speaker, the answer remains the same. As was indicated in the House, if it is necessary to clarify that particular issue in the legislation, it will be done. May I also remind the Hon. Member that the water policy announced in November of 1987 is pretty specific. It clearly says that federal legislation to the extent necessary to implement fully this policy, which prohibits the inter-basin transfer of water, will be brought before the House.
I can tell the Hon. Member that legislation will be brought before the House in a very short time. It is in its final drafting stage. That will clarify the issue. If it needs further clarification with regard to Bill C-130 itself, that will be done as well.


TERMS OF AGREEMENT
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, the Government is contemplating an amendment to the Bill but that cannot correct the problem. It is the agreement that is defective.
Mr. Masse:: How do you know that?


William Warren Allmand: Once again, how can the Government proceed with an agreement that sells out our most important resource, fresh water, without the consent of the Canadian people?


Donald Frank Mazankowski: Mr. Speaker, once again, the free trade agreement does not cover the large scale export of water. Water is covered by the FT A as a tariff item under beverages, spirits and vinegar. Bottled water is covered. The bottom line is that Canadian water is fully protected. It will be even more absolutely and fully protected when the new legislation is introduced by the Minister of the Environment. If any clarification is required with respect to the definition in the trade Bill, that will be done.
July 21, 1988


REQUEST THAT AGREEMENT BE AMENDED
Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, the day before Mr. Clark gave his very powerful testimony to the legislative committee looking at this issue, the head of the Canadian Federation of Agriculture expressed in very clear terms his concern about the potential for large-scale exports of water and what they would do to agriculture in this country.
The Deputy Prime Minister just said that if necessary there will be a clarification. I want the Government to show some leadership for a change, and stop trying to play-


Mr. Valcourt:: Is that a question?


Mr. Speaker:: I would ask Hon. Members, given the very lengthy time it has taken to go through only a few questioners, to be as precise as possible in putting their questions.


Steven W. Langdon: The Deputy Prime Minister says he is willing to clarify this issue. Is he willing at this stage to make a definite commitment that the Government will change this trade agreement so that water is excluded? Will he show that leadership?


John Horton McDermid: Mr. Speaker, I think the Deputy Prime Minister made it very clear in his answers today that the inter-basin transfer of water is outside the free trade agreement.
I have been sitting on the committee with the Hon. Member and we have heard some excellent testimony, including that of the Canadian Federation of Agriculture, and the evidence of Mr. Clark. We also have the evidence filed by Mr. Stone. We had all kinds of evidence. I think the Hon. Member will admit that what we as members of that committee should do is hear the evidence, which we will hear through until next Thursday night. At that time amendments will be presented by all Parties to the committee for consideration clause by clause. Let us let the committee do its work.


GOVERNMENT POLICY
Steven W. Langdon: Mr. Speaker, we have a situation in which we are getting clearly conflicting advice from those people who are acting as experts. With that sort of uncertainty I ask the Government to clear it up, make a commitment to Canada now, and tell Canadians that large-scale exports of water will be prevented in the future.


John Horton McDermid: Mr. Speaker, we have already said that very clearly in our policy statement last November. My colleague, the Minister of the Environment, made a very clear statement about the water policy of the Government.
The Hon. Member says we are getting conflicting advice. We are. Our responsibility is to separate what is factual from what is not, and make a decision. We have been getting conflicting advice from the NDP for years and we know what the Canadian people think of that.
Oral Questions


INDIAN AFFAIRS
Mr. Guy St-Julien (Abitibi):: Mr. Speaker, my question is for the Minister of State for Indian Affairs and Northern Development. Further to the agreement signed on September 27, 1983 by Transport Quebec and the federal Government to give northern Abitibi a system of airport facilities meeting the specific needs of this large region, in accordance with the James Bay and Northern Quebec Agreement, Mayor Noah Inukpuk and the people of the Village of Umiujaq have been demanding an airport for several months.
Can the Minister tell us today whether Transport Canada and Transport Quebec have reached an agreement to include in their construction programs building an airport in Umiujaq for the welfare of the people in their construction programs, in accordance with the James Bay and Northern Quebec Agreement?


Bernard Valcourt: Mr. Speaker, further to the implementation of the James Bay Agreement, the Government of Canada did agree to build an airport at Umiujaq. Indeed, Transport Canada is now negotiating with the Province of Quebec and hammering out the details of the construction that is to be done shortly.


CANADA-UNITED STATES FREE TRADE AGREEMENT-CABLE TELEVISION
Mrs. Sheila Finestone (Mount Royal):: Mr. Speaker, in the free trade hearing this morning we learned from the Canadian Cable Television Association a shocking new fact, another secret story about the Prime Minister's trade deal. It will annually grab $70 million, through monthly cable charges, from the pockets of the millions of Canadians who watch their favourite TV programs. Further, we learned that most of that $70 million will flow through to the American programmers.
My question is directed to the Deputy Prime Minister. Why does the Prime Minister not let Canadians decide whether they want their monthly cable bills to increase dramatically and their money to flow to the United States? Why will the Prime Minister not call an election and let the people decide?

July 21, 1988
Oral Questions


Mr. Rossi:: Here comes the butler.


John Horton McDermid: Mr. Speaker, a personal insult is the final proof of an empty mind.
I was at the committee this morning too, Mr. Speaker, and 1 did not hear quite the same evidence as that to which the Hon. Member alluded. She is talking about $70 million in transfers of copyright to American broadcasters. That is not exactly what was said this morning. They said there could be potential for it.
They made certain recommendations today. They agreed that they have to pay copyright, under certain conditions, to those who produce the programs. We were discussing those certain conditions this morning.
It was an excellent presentation, and the Hon. Member will admit that. As the committee examines this legislation it will consider those very good recommendations.


Sheila Finestone: Mr. Speaker, I would like to suggest that if there is any selective hearing going on around here it is that of the Government and particularly the Members sitting around the free trade table.


Some Hon. Members:: Hear, hear!


REQUEST FOR ELECTION
Sheila Finestone: Mr. Speaker, the Government trade deal amends the Copyright Act, as the Hon. Member heard this morning. It also sanctions the right of political interference, particularly by the American movie mogul, Jack Valenti, who, with these changes, can now dictate Canadian cable retransmission policy to the Canadian Cabinet.
Will the Prime Minister let the people decide whether they want their television tampered with along with their water? Will he call an election now?


John Horton McDermid: Mr. Speaker, 1 want to remind the Hon. Member of one thing. In 1985 an all-Party subcommittee examining retransmission rights made a recommendation regarding the rights, and that is exactly what we were discussing today. It was an all-Party unanimous recommendation. We have exactly the same thing in the free trade agreement. Talking about selective hearing, I find this absolutely amazing from my hon. friend.
As far as an election is concerned, the Hon. Member's Party is going to rip up the trade deal, and the New Democratic Party is going to cancel it after six months. It will be an issue in the election, and I can hardly wait.


Carlo Rossi: Well call it then.


ACCESS TO INFORMATION
Nelson Andrew Riis: Mr. Speaker, my question is directed to the Deputy Prime Minister. He will likely recall that in the 1984 election campaign the Prime Minister said, "Secrecy and stonewalling have become a habit with the Government and we will never break that habit until we change the Government". And the Government was changed.
In a letter made public today, Bruce Mann, the Assistant Information Commissioner, has stated that in his view the Department of External Affairs has been "effectively coaxing" military contractors into keeping records of their military exports secret.
In light of the comments made by the Prime Minister during the last election campaign, does the Deputy Prime Minister think it is appropriate for a government Department to be advising and coaxing private companies to keep their export records secret? Would he now admit that the real reason for this interference by the Department of External Affairs is that it wants to keep Canadians in the dark about our exports of military equipment to countries like Chile which obviously abuse human rights?


Hon. Ray Hnatyshyn (Minister of Justice and Attorney General of Canada):: Mr. Speaker, if the Hon. Member was really serious about getting an answer to his question he might have thought about sending the letter over in order that we would have a chance to look at the context within which he brings it up.
If the hon. gentleman wants to talk about access to information, I remind him that this Government is the first Government which has operated under the access to information regime. We have strengthened and are continuing to evolve the most effective access to information regime in the country.
There is no socialist Government in the country now, but he should have talked to the former Governments of Manitoba and Saskatchewan. They never had access to information regimes worth a darn.


DEPARTMENTAL LETTER
Nelson Andrew Riis: Mr. Speaker, Mr. Mann cites a letter from the Department which reads in part:
The political sensitivities of some of the export destinations for the goods being exported has changed and it would not be correct to disclose documents today on the basis of approval... over two years ago.
July 21, 1988

It is a most serious situation when a Department of the Government is asking private military contractors to conceal from the public details of their contracts and exports.
As a result of this very serious situation, would the Deputy Prime Minister be prepared to launch an immediate investigation into this blatant political interference by the Department of External Affairs? Is it not time that Canadians had the full story on which countries are receiving military equipment from Canada, what kind of military equipment they are receiving, and to what extent?


Donald Frank Mazankowski: Mr. Speaker, while in no way acknowledging the premise of the question, I know that the Hon. Member has had a number of exchanges with the Secretary of State for External Affairs on this very important issue. I think the Minister has been very forthcoming and has told the Hon. Member that if he has any specific information or any specific suggestions he should bring them to his attention and he will look into them.
I can refer to Hansard and read back the exchanges which have taken place. There have been private discussions as well of which I am aware. I will certainly raise this with the Secretary of State for External Affairs. I assure the Hon. Member that it will be looked into.


CORPORATE AFFAIRS
Alan Redway: Mr. Speaker, in the absence of the Minister of Consumer and Corporate Affairs I will direct my question to the Deputy Prime Minister. It involves the allegations reported today of price fixing in the ready mixed concrete industry in the Metropolitan Toronto area. As a result of that price fixing, apparently the cost of a new house in the Metropolitan Toronto area has been increased by at least $1,000.
Will the Deputy Prime Minister advise the House what action the Government intends to take to put a stop to this?
The industry was taken to court in 1972 and it pleaded guilty and was convicted of price fixing at that time. The court made a prohibition order against further price fixing on the part of the industry. Therefore, why has it been allowed to get away with it again?


Donald Frank Mazankowski: Mr. Speaker, as I am sure the Hon. Member knows, it is the usual practice neither to confirm nor deny the existence of any investigation that may or may
Oral Questions
not be taking place. It is also the practice not to comment on such an inquiry if it is in progress.
I can only assure the Hon. Member that the director of investigation will obviously be interested in the press comments. I am sure that that will trigger some action on their part.


CANADA-UNITED STATES FREE TRADE AGREEMENT-REQUEST FOR GENERAL ELECTION
Brian Vincent Tobin: Mr. Speaker, my question is directed to the Deputy Prime Minister. The unassailable fact is that there will be no trade deal in this country until there is a national general election and a decision taken by the people of Canada.


Some Hon. Members:: Hear, hear!


Brian Vincent Tobin: As of yesterday and the statement by the Leader of the Opposition, that unassailable fact cannot be changed by debate in the House of Commons, cannot be changed by questions and answers, and cannot be changed by editorial comments which either celebrate or condemn this new reality.
It is an unassailable fact. Given that certain reality, why is the Government afraid to allow the people of Canada to be heard, to speak, and to decide on this nation's future, by calling an election campaign?


Donald Frank Mazankowski: Mr. Speaker, the Hon. Member can support his Leader and the Liberal Party's total abdication of responsibility-


Sheila Maureen Copps: Power to the people.


Donald Frank Mazankowski: -and tacit recognition that the real Leader of the Opposition is not in this House but in the other place in the name of Senator MacEachen. If they want to play that sort of game, they certainly can. But let me tell you, I have just had handed to me a letter sent to the Member for Burlington from IPSCO Incorporated, a steel company in western Canada. I would like to put this on the record-


John Napier Turner: Table that letter.


Donald Frank Mazankowski: You are darn right I will table it. It says: Dear Bill:
I note with dismay that the Liberal Party of Canada has decided to put partisan politics ahead of the future well being of Canada with their threat today to block the free trade agreement in the Senate of Canada. I assume this threat will not stop your current committee hearing, and the purpose of this letter is to volunteer to assist your committee in pushing for an early positive result. If there is anything I can do to help please let me know.
Yours truly,
IPSCO Incorporated.

July 21, 1988
Business of the House
I would be glad to table it.


Some Hon. Members:: Hear, hear!


Sheila Maureen Copps: Why do you not talk to the United Steelworkers, Don?


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


Brian Vincent Tobin: Mr. Speaker, it never fails that whenever one asks a Tory what the people of Canada think, he quotes the head of a corporation. They know what the steel corporation thinks but they do not want to hear the steelworkers and workers right across the country, and they deny them a right to speak.


Some Hon. Members:: Hear, hear!


Brian Vincent Tobin: During the last election campaign the Prime Minister said: "Give me four years". Four years are up. He said: "Give me a sacred trust". The people of Canada have denied that trust. They now want their say and they are going to have it-


Mr. Speaker:: The Hon. Member will put his question.


Some Hon. Members:: We want George! We want George!


Brian Vincent Tobin: Mr. Speaker, let me put forward the revolutionary proposition, rejected by the Tory Party, that the people of Canada have every right to be heard, as much as any steel corporation or any corporate boardroom.


Mr. Speaker:: The Hon. Member for Winnipeg North Centre.


AIR CANADA
Mr. Cyril Keeper (Winnipeg North Centre):: Mr. Speaker, my question is directed to the Deputy Prime Minister. The Air Canada Airbus contract for $1.8 billion involves thousands of jobs. The Government failed to get assurances of Canadian content and therefore threw away thousands of jobs.
Why did it not assert the traditional Canadian position, which is that we have a right to ask for industrial offsets under GATT? Is it because the American trade office disagrees with our position with regard to the negotiation of industrial offsets? Why is he throwing away these jobs?


Donald Frank Mazankowski: Mr. Speaker, the tradition has been that when Air Canada undertakes to acquire new airplanes to modernize its fleet, it is a decision taken by Air Canada. The decision is based upon the criteria that are set down by the corporation to fulfil a certain mission it has for
that particular aircraft. The issue of efficiency, price, and all of those conditions are taken into account. The matter of offsets has never been a part of those criteria. It has not in the past and it is not today.
This Government and previous Governments have never interfered with the decision-making process in terms of the acquisition of which aircraft is the best to suit the needs of a particular mission. That is the case in this particular acquisition.


Mr. Speaker:: There will be a supplementary question by the Hon. Member for Winnipeg North Centre. Then I regret that we are out of time.


GOVERNMENT POSITION
Cyril Keeper: Mr. Speaker, does the Deputy Prime Minister realize that this new ideology of giving no direction to Crown corporations means that Canada has failed to assert its right under GATT for industrial offsets for Canadian jobs, and has failed to give opportunities for Canadian workers to have good jobs, while spending Canadian taxpayers' money?


Donald Frank Mazankowski: Mr. Speaker, if the Hon. Member is so interested in jobs why is he opposed to the free trade agreement?


Some Hon. Members:: Oh, oh!


Nelson Andrew Riis: Because of the jobs.


Donald Frank Mazankowski: It will create jobs, jobs, jobs.


Some Hon. Members:: Hear, hear!


BUSINESS OF THE HOUSE
Hon. Herb Gray (Windsor West):: Mr. Speaker, I want to ask either the Government House Leader or the Deputy Government House Leader to give us the customary Thursday statement of government business.


Douglas Grinslade Lewis: Mr. Speaker, our agenda is as follows: The House will deal with Bill C-139, the income tax reform Bill, at second reading; Bill C-136, the broadcasting legislation, at second reading; Bill C-82, Lobbyists Registration Act, at third reading.
We will then commence the abortion debate. We will stay with that debate until it is resolved.
July 21, 1988

When we have completed these items our plan would be to take a short recess until August 10, 1988, when we will return to deal with the free trade and the child care legislation, and other important legislative initiatives. The motion will be ready to be tabled at the appropriate time tomorrow.


Michael Morris Cassidy: Mr. Speaker, I want to ask the Government House Leader what steps the Government is taking with respect to people who work in this place and around this place? I have checked with the relevant authorities and found out that persons in the parliamentary program, that is Hansard reporters, interpreters, those who keep records here and have to keep this place going, have had all of their leave cancelled for the entire summer. They have been working extended hours; there have been 10 hours a day in sittings. They have been working since last August 18, without any significant break.
I have also found out that generally leave has been cancelled for the cafeteria workers, the messengers, the security clerks, and the cleaners who work here in the House of Commons. In the cafeterias, the normal short hours of the summer have been extended. Does the Government have any sympathy for the people who work here and provide services for Members of Parliament?


Douglas Grinslade Lewis: Mr. Speaker, as my colleague, the New Democratic Party House Leader will know, the Board of Internal Economy enters into contracts and agreements with all of the organizations to which my hon. friend refers. All of the people employed in those organizations realize that the House of Commons can sit 365 days a year to do business. There are normal breaks. That is one of the reasons why we are taking a break after we finish the abortion motion.


Herbert Eser (Herb) Gray: Mr. Speaker, will the Deputy Government House Leader clarify part of his statement? He said that after the debate on certain Bills is completed the Government will call a debate on abortion. Will he make it exactly clear for the House and the public what it is we will be debating? The Government has a resolution that is still on the Order Paper. It was tabled last May. We thought last week the Government was going to call that motion for debate, but because of the Government's own decision, that debate did not proceed. The Government in effect cancelled the debate. I would like to know from the Deputy Government House Leader if the Government is going to call the motion it put down last May, or is it going to present another separate motion or Bill?


Douglas Grinslade Lewis: No, Mr. Speaker, the Government will present a motion to take a sense of the House. It will be a normal motion, debated under all of the normal Standing Orders, requiring the abrogation of no Standing Orders. We believe the debate should commence without any procedural concerns at all.
Business of the House


Don Boudria: Mr. Speaker, further to what was raised by the Hon. Member for Ottawa Centre (Mr. Cassidy), the Chair will know that approximately-


Douglas Grinslade Lewis: Come on!


Some Hon. Members:: Sit down!


Don Boudria: Mr. Speaker, I do not believe I interrupted the Government House Leader when he spoke. Surely the same courtesy should be extended to Members, even if they happen to sit on the opposition side of the House, temporarily.


Carlo Rossi: You are not a dictator, Lewis.


Don Boudria: I was just speaking further to what was stated by the Hon. Member for Ottawa Centre. Some time ago I raised with the Chair in this House the situation involving the employees of Parliament Hill, particularly through the summer months. I brought to the attention of the Chair at that time that at least some accommodation should be made to allow a number of employees throughout the summer to have some time off because, I believe, notwithstanding the fact the House sat through most of the summer, many of us took some time off.
In conclusion, I want to draw to the attention of the Chair, in particular, the treatment of the Parliamentary Restaurant employees who traditionally work eight hours a day during session and six hours a day during the month of August. This has been changed. They are now working eight hours a day during August and are not being paid overtime even though they work two hours a day extra. That decision was taken by the management, as I understand it. I would like the Chair to look into the matter to see whether or not that is fair in that particular case, as well as the other cases I have brought to the attention of the Chair.


Mr. Deputy Speaker:: Matters relating to the working conditions of House of Commons employees are not points of order. Nevertheless, I note the representations made by the Hon. Member and if the Hon. Member has further representations to make to the Speaker, he is welcome to do so.


Nelson Andrew Riis: Mr. Speaker, I would like to seek some clarification from the Deputy House Leader. He indicated that the order of business would be Bill C-139, and second reading of Bill C-136 and Bill C-82 and then we would begin the debate on the abortion motion. Did he say that the motion we would be debating would be the motion that is currently on the Order Paper or does he plan to bring in a new motion? And would he be tabling that new motion tomorrow?


Douglas Grinslade Lewis: Yes, Mr. Speaker, we will be tabling a new motion tomorrow afternoon for debate. I should also point out that if we can rearrange those Bills in order to facilitate spokespersons from either Party, we will be pleased to do so in an effort to make as much progress as soon as possible.

July 21, 1988
Income Tax Act and Related Acts


John V. Nunziata: Mr. Speaker, I would like to put a question to the Deputy House Leader. Can he explain to the House and to the people of Canada why he is bringing forward a motion to deal with abortion rather than showing some leadership and courage and bringing forward legislation? Can he explain why this House will not be debating legislation prior to the next election campaign?


Mr. Deputy Speaker:: The Chair believes that this is a question more appropriately put during Question Period.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson (Etobicoke Centre) that Bill C-139, an Act to amend the Income Tax Act, the Canada Pension Plan, the Unemployment Insurance Act, 1971, the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act, 1977 and certain related Acts, be read the second time and referred to the Standing Committee on Finance and Economic Affairs; and the amendment of Mr. Garneau (p. 17724), and the subamendment of Mr. Boudria (p. 17770).
John R. Rodriguez: Mr. Speaker, prior to the lunch break I was commenting on the fact that there are three fundamental factors which affect every tax system. One of these factors is fairness, the other is the re-distributive nature of the system. The third factor is progressivity. I was talking about the fairness of the tax system. The Government in its proposal has scrapped the 10 rates and we are now moving to three rates. The top rate is somewhere in the vicinity of 44 per cent. Under the proposed so-called reforms in this legislation, all incomes above $55,000 will be taxed at a rate of 44 per cent. Any income above $55,000 will be taxed at a rate of 44 per cent. This means that families which earn just above $55,000 will face the same rate of taxation as a person who earns $1 million. The most striking aspect is that many Canadians with incomes of less than $30,000 will face a marginal tax rate of 39 per cent. Is that fair?
That is the question average Canadians are going to ask. Should a secretary at Bell Canada who earns $28,000 a year face a marginal tax rate of only 5 percentage points below the rate faced by the chairperson, Mr. de Grandpre, who earns some $900,000 a year? A secretary at Bell Canada will be paying the same rate of tax. Is this the Conservative view of fairness?
I also mentioned the fact that the tax system should be progressive. This Government, since it has come into power, has increased taxes. It certainly has increased the sales taxes
and it is even talking now about going to a national sales tax or what might be called a value-added tax or a business transfer tax. It is now going to proceed to one of the most regressive ways of raising taxes. Everything will now be taxed. If you go to see a lawyer to get your will drawn up, you will pay a tax. The Government is going to collect.
There are those who see a devious plot in all of this. In fact, when the free trade deal comes into effect, the Government is going to be giving up some $1 billion in revenue as a result of the tariffs it is going to forgo when products come across our border. That is $1 billion the Government cannot give up without getting it from somewhere else. So the Government has come up with this system of a business transfer tax to really recoup from the consumers of Canada what it will lose with respect to the free trade deal.
All of this talk about free trade being a bonanza for consumers is not correct. I hope Canadians are not thinking that somehow or other they will be able to get all these things a lot cheaper because there is no tariff duty on, for example, television sets coming in from the United States. I trust Canadians are not thinking that way because this Government is going to grab it all with this business transfer tax.
In the long run, the Government will be taking in spades more than it has given in tax reform. The most regressive form of taxation is sales taxes. If the Prime Minister (Mr. Mul-roney) goes to the store and buys bread, he pays the same price as a poor person. The tax does not respect wealth and it is not sensitive to poverty. It is a tax that is applied and everyone pays it. It does not recognize that some person might be on a fixed income of perhaps $15,000 or $16,000 a year. Just because they are on a fixed income does not mean the tax will be waived. It does not apply. The tax is regressive because it does not respect incomes. It is regressive and not progressive.
We New Democrats studied this whole question of taxation. It was one of our concerns. It was an issue for us in the 1984 election campaign, and it remains an issue for us today. The New Democratic Party caucus studied the tax system. We participated in the Finance Committee when it looked at tax reform, which has resulted in this Bill. Our members on the committee on behalf of the caucus tabled a minority report in which we made recommendations. I want to put those recommendations on the record.
First, we recommended that the structure of tax rates should be further examined and that a higher tax rate should be imposed on high-income Canadians. People such as Mr. de Grandpre should not be paying 44 per cent; they should be in a higher tax rate, those who have received so much from our country. They should be prepared to contribute much more to the upkeep of it.
July 21, 1988

Second, we have recommended that the personal income tax system should be indexed fully to inflation. We agree with moving from exemptions to tax credits. We agree that that is fair. But it is not going to be fair if we do not ensure that those tax credits are fully indexed to the cost of living. In fact, what the Government has tried to establish with tax credits is to redistribute wealth to those who need it. Unless provision is made for indexation to the cost of living, the value of the tax credit will be eaten up by inflation.
Third, we recommended that capital gains income, except for that of farmers and small business, be fully taxable, and the lifetime exemption be eliminated. The Government continues to allow capital gains up to $100,000 with a lifetime exemption.
That is a tax loophole that ordinary Canadians cannot take advantage of. They are not in the speculation business. They are in the living business. They have to live from day to day. They are not the ones who buy condominiums in Florida. They are not the ones who are in the flips of property in Toronto where the market is so heated. We are saying in this recommendation, as was said in the Carter Commission report on taxation, a dollar is a dollar is a dollar and it has to be taxed.
Fourth, we recommended that other personal tax measures which largely favour the wealthy such as the deduction for RRSP contributions for upper income earners, special treatment of dividend income and full deduction for interest costs in excess of investment income be further reduced. In 1984, 187 wealthy Canadians with incomes of more than $250,000 paid no income tax whatsoever. Many more paid tax at well below the average rates. By and large, this tax reform proposal of the Government does not change much. It still allows the wealthy to take advantage of loopholes in the tax system.
We believe there ought to be no sales tax on food whatsoever. We recommended that the reform of the federal sales tax should not involve taxation of food, and should reduce the reliance of the federal Government on indirect taxes.
We also recommended that special treatment for capital gains relative to other corporate profits should be eliminated. Tax measures which favour large profitable corporations such as the seven-year carry-forward and the two-year carry-back loss provisions and the deductibility of interest costs incurred in corporate takeovers should be reviewed.
Finally, we recommended that a corporate minimum tax be implemented. That was one of the promises we elicited from the Prime Minister during the 1984 campaign.
We say to the Government that these are the kinds of recommendations that would make tax reform tax fairness. That is what we are interested in, not this phoney approach to tax reform but rather tax fairness as outlined by the recommendations which this caucus put on the record in the Finance Committee as its minority report.


Mr. Deputy Speaker:: Are there questions or comments? The Hon. Member for Hamilton Mountain.
Income Tax Act and Related Acts


Marion Dewar: My question is with respect to the Hon. Member's point of view with regard to the regressive tax system and where we are going with tax credits. For a long time we have advocated an increase in tax credits. However, some of the tax credits we are dealing with here are tax credits which fall into non-indexed areas which the Government has now identified. The tax expenditures at the upper end have been closed off but do not come into effect until 1991. What will the effect on the revenues of the Canadian Government be in trying to finance the Government with this type of conflict?


John R. Rodriguez: Mr. Speaker, Canadians who are more cynical than I recognize that it is very convenient that the so-called elimination of tax exemptions and the closing of loopholes are scheduled to come into effect in 1991, a time which is well beyond the next federal election. I want to say to the Hon. Member who posed the question that there is a certain cynicism involved here. I must admit that there are times when I slip into that cynicism. I also see the cynicism of tax cuts which appear on people's pay-cheques as of July 1, 1988. Just to protect the possibility of a spring election people will get tax refunds in the spring based on the first six months of 1988 when tax is collected at the higher rate.
It seems to me we have to look at this in the context of a cynical Government which is in fact trying to pick the right time to call an election. It has protected itself in terms of calling it in the spring, summer and winter of next year.
With respect to the question of tax credits, of course tax credits are more fair than exemptions. Tax credits can be focused and be used for the redistribution of funds. One of the factors in a tax system is its redistributivity. The ideal of using the tax system to redistribute money to poor people is much more easily achieved with the tax credit system than with exemptions.
However, it is no good to have a tax credit system unless one is prepared to index it fully. If it is not indexed fully it will become eroded. In this way the poor get poorer and relatively their position does not become improved. We in the New Democratic Party have proposed full indexation. The Government has not responded positively to that proposal.
The Hon. Member has pointed out that the elimination of these proposals concerning tax exemptions will not take effect until 1991. I suppose what the Government is looking at to recoup any of those losses in the future is to move to a national tax system. I cannot think of anything more regressive than that. The average Canadian family will be paying $1,000 more after tax reform comes into effect than they were paying when the Government came to power in 1984. Even with the few pennies of their own money that Canadians got back, it did not take too long for the Liberals down at Queen's Park to rush in and grab it from Ontario taxpayers. The Liberals moved right in and grabbed it, after using the bonanza or surplus to win an election by spreading the largesse. Now they find they do not have the money, so whatever few shekels Ontario taxpayers will get back, the Liberals at Queen's Park will take.

July 21, 1988
Income Tax Act and Related Acts
I say to the Hon. Member that the two old Parties, the Liberals and the Conservatives, are tweedle-dum and tweedle-dumber. Their view of taxation is "Robbing Hood". They take from the poor to give to the rich. That view will not change as long as the Liberals or Conservatives sit on the government benches. We need an NDP Government that believes in tax fairness, and none of this phoney tax reform approach that is being foisted off on Canadians.


David Kilgour: The Hon. Member doth protest a bit too much. Unlike himself, many of us have seen what the New Democratic Party does as a Government. It is one thing to talk, and another to see what people actually do when in office. Until recently, Manitoba was the only province in Canada that has seen fit to elect an NDP Government, other than British Columbia and Saskatchewan. That Government raised taxes substantially for all tax-paying Manitobans, so much so that in the recent election all but 20 per cent of Manitobans voted against the NDP.
If the day ever came that the NDP was elected to office, which I pray is not the case, how do we know that the NDP would not do what their colleagues have done in Manitoba, and in a fiscal sense put the boots to the men and women of low income throughout the province?


John R. Rodriguez: When the Hon. Member mentions that British Columbia, Saskatchewan, and Manitoba have in the past elected NDP Governments, I also wish to point out to him that the territorial Government of the Yukon is a New Democratic Government lead by Tony Penikett. I want to point that out to the Hon. Member because he seems to have avoided that. The economy of the Yukon was in a shambles. Today the Yukon is in a far better economic position than it was when led by Conservatives not so long ago.
It is important to look at the style of a Government when it taxes. One has to look at the quality of life of the people within the borders of that community. For example, when the New Democrats were in power, a young man or woman driving a car in Manitoba, Saskatchewan, or British Columbia had a lot more money in his or her pocket to maintain that car than a young man or woman in Ontario where there is no government-run auto insurance. That is a saving right off the bat, particularly to poor people. Rich people tend to put the cost of vehicles into their corporations and the corporations write off the insurance. Therefore, one has to keep that in mind, and look at the quality of life.
When the NDP was in power in Manitoba, day care was light years ahead, compared to when Conservatives are in power in the provinces. That is a benefit and redistributing tax dollars in areas that affect the quality of life of poor people, which is extremely important.
In the area of employment, it is no good to receive a tax cut if a person does not earn any money. What good is a tax cut to that person? First, what is important is to have jobs, jobs, jobs. When Manitoba was led by the New Democrats, it had one of the lowest unemployment rates in the country, as did Saskatchewan. In fact, the Government in Saskatchewan had a
balanced budget. When Allan Blakeney was defeated in the Province of Saskatchewan, there was a surplus. Within six short months of the great Devine coming to power the surplus was lost. That Government is now in a deficit position. These fiscally irresponsible Tories have run up a deficit. Who will pay for that? The taxpayers of Saskatchewan have to pay the interest on that deficit. They have to pay not only the year to year deficit, but also the accumulated deficit. That must deduct from the quality of life of the people of Saskatchewan.
What can 1 say about British Columbia with Premier Vander Zalm. To see what is going on one needs a numerolo-gist to find out who the players are in British Columbia. If anyone wants to stand up and tell me that the people enjoy a better quality of life in British Columbia under Vander Zalm, then that person is dreaming in Technicolor.
We need a Government to put people first and recognize that there are people whom the tax system must serve and who do not serve the tax system. The tax system under the Tories and the Liberals serves the wealthy corporations and the wealthy people in this nation. The Tories will never understand that because they are not sensitive to people. They are only sensitive to making a quick buck. The thinking of the Tories is: "I am all right, Mack, and I do not give a hoot about you. You look after yourself, and pull yourself up by the bootstraps". The Tories believe in privatizing, deregulating, every man for himself, and the devil take the hindmost. That is Tory philosophy, Buster, and you are in the wrong park because we are not in there with you.


Mr. Norman Warner (Stormont-Dundas):: Mr. Speaker, I appreciate the opportunity to participate in this important debate. I heard a few familiar words a little while ago from the Hon. Member who just spoke, although it was in different terms to what was said four years ago. I heard the ring: "Jobs, jobs, jobs". At one time it was said with disrespect, and now it is with respect. Obviously, times change.
When the Government initiated certain reforms in the House and indicated where it thought it would be leading the country, and it is fine to stand up today and report that the Government did create the jobs, very few people in Opposition thought it would. Jobs have been created throughout Canada and unemployment is at a much lower rate throughout the country. Although the Government has not achieved its goals in all areas, it has been very successful. To go along with the economic renewal program, tax reform has been initiated. This will give confidence to business, individuals, and investors.
I have heard a lot of rhetoric from the NDP and previous speakers about loopholes. The Hon. Member for Kamloops- Shuswap (Mr. Riis) was talking about dozens and dozens of loopholes, which apparently were studied in Tax Probe '86. The Finance Committee also looked at various initiatives that the Government has taken historically, and some that it may consider. The committee found there was some value in many of these; it included capable representatives from the opposition Parties. I am quite surprised that the Hon. Member would rise and say that there was absolutely no initiative there of any great economic consequence.
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Besides the reforms initiated by this Bill, the record is quite clear as to what the Government has done in previous tax reform. A minimum tax has been initiated which was implemented to ensure that upper-income Canadians pay their fair share of tax. Tax shelters based on investments in yachts, recreational vehicles, and similar properties have been eliminated; income splitting through interest-free loans between family members has been halted; the so-called carve-out transactions in the oil and gas sector have been stopped; trusts are now unable to distribute investment income tax free; the use of partnerships and corporate takeovers to increase tax deductions has been eliminated; new at-risk rules for limited partnerships have been introduced; and corporations are being prevented from distributing profits as capital gains rather than dividends.
These are all initiatives that our Government has brought forward and these were so-called loopholes in the past. We have looked at various other initiatives that we have in place, and it is difficult to make major changes. Other than what we are bringing in now, I believe that what we are bringing in with this Bill certainly is fair and equitable. I am quite surprised that the opposition Members would argue against the initiatives of this Bill.
1 would like to point out particularly one of the key elements in the tax reform package, which is the conversion of personal exemptions and some deductions to tax credits. For more than 20 years, Canadians who have studied our tax system have increasingly recommended that tax credits should replace exemptions and deductions to make the system fairer.
The reason why tax credits are fairer is straightforward: An exemption or deduction is subtracted from income in determining taxable income. It is therefore of greater value to higher-income earners because it reduces income that would otherwise be taxed at a higher marginal tax rate. A tax credit, on the other hand, is subtracted from tax owed, and therefore provides the same reduction in tax to all taxpayers regardless of their income level.
Let me illustrate in dollar terms. A $1,000 exemption reduces the federal taxes of a taxpayer in the old 6 per cent tax bracket by $60. But for a taxpayer in the highest tax bracket, federal taxes are reduced by $340-almost six times as high. When the provincial portion is calculated, the higher income earner comes out even further ahead.
Under tax reform, this $1,000 exemption is converted to a tax credit equal to 17 per cent of income, which is $170 for a $1,000 amount of money. This amount will be the same for taxpayers in every tax bracket, whether low or high-income earners.
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The new tax credits will replace the personal exemption, the married exemption, the equivalent-to-married exemption, the dependants' exemptions, and the age exemption. Credits will also replace a number of deductions: The disability deduction, the pension income deduction, the medical expense deduction, the tuition fee and education deductions and the charitable donations deductions. The most commonly used credits have been set at levels that will make them worth more on tax savings for the majority of taxpayers than the old exemptions would have been worth.
Lower-income taxpayers, in particular, come out ahead. Indeed, the increased value of personal credits is the main reason why 850,000 lower-income Canadians will have their income tax reduced to zero.
Let us look at a few of the commonly used credits to see why they are better for 66 per cent of taxpayers in the 17 per cent tax bracket. The new basic personal credit directly reduces federal tax payable by $1,020. This year, the basic personal exemption would have been $4,270, reducing the federal tax by only $725; therefore, it is clear that most taxpayers come out further ahead.
The married or equivalent-to-married credit is set at $850. The old exemption would only have been worth $635. The age credit is $550, significantly higher than the $455 value of the exemption. The $65 credit for a dependent child is the same as the old exemption; however, for the third and subsequent child the credit is doubled.
Many deductions will also be converted into tax credits at 17 per cent of their present value. That is, taxpayers will be able to subtract from tax 17 per cent of the amount that they can now subtract from income. In effect, this simply means that the new credits are worth the same to those taxpayers in the 17 per cent bracket as the old exemptions. The conversion to tax credits directs more money to those in need and reduces the after-tax value of benefits going to higher-income Canadians.
Tax credits respond to the view, expressed to the Government by Canadians from one end of the country to the other, that the tax system should be fairer and give a better break to those most in need.
Tax credits also work to eliminate a number of inequities under the old system. A perfect example of this is the new married or equivalent credit. Dependent spouses will be able to earn $500 before their earnings begin to reduce the married credit. Above that amount, the credit will be reduced at the rate of 17 per cent of earnings. Under the old system, those earnings directly reduced the married exemption, which in turn increased the amount of income taxed at the highest tax rate of the higher-income spouse.

July 21, 1988
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The credit system ensures that the initial earnings of a second income earner are effectively taxed only at the lowest rate in the system. This removes the disincentive under the old system for many spouses to enter or return to the workforce.
Tax reform also recognizes the importance of tax credits as an integral part of the Government's over-all social policy. The refundable child tax credit has become a vital measure aimed at assuring families of adequate income support for the care of children. The credit is being increased to $559 this year, up from $489 last year. It is now available for children in the year that they turn 18.
Combined with other tax reform measures and with the Government's child care proposals, the improved credit will significantly increase tax assistance for most families with children and make the system more progressive.
Similarly, the sales tax credit, which has increased under tax reform, serves a vital function in offsetting the effect of sales tax on those with medium or low incomes.
I might add that we have made clear that the sales tax credit will be enriched considerably and extended in the second stage of tax reform when a new, broad-based sales tax is introduced. The new two-tier credit for charitable giving will encourage charitable support by starting at 17 per cent for donations up to $250, and then rising to 29 per cent for donations above that level. The new credit means that tax assistance will now be based on the size of the donation, not the size of the donor's wallet.
No longer will we have an unfair system where the donation of a wealthy person is rewarded more than the donation of someone less well off.
Since provincial taxes, except in Quebec, are calculated as a percentage of federal tax, all the new credits will also have the effect of reducing provincial taxes in the provinces. For example, the charitable donations credit would actually be 25.5 per cent for the first $250 and 43.5 per cent for donations in excess of $250, in a province which levies a tax of 50 per cent of basic federal tax.
I am pleased that Quebec made a number of changes in its last Budget, to ensure that Quebecers can take advantage of some of the tax savings from federal tax reform.
With all of the advantages offered by tax credits in terms of fairness, social progress and flexible application, Canadians will agree that the time has indeed come to adopt them into the system as part of tax reform. I urge all Members of the House to support the Bill before us.


Some Hon. Members:: Hear, hear!


Mr. Deputy Speaker:: Questions and comments. On debate.


Mr. Alain Tardif (Richmond-Wolfe):: Mr. Speaker, 1 also welcome this opportunity to take part in this important debate
on the Bill now before the House, and I do so for a number of reasons.
First of all, I believe this Bill accurately reflects what the Conservatives are and what they have been since they came to power in September 1984. We have seen a Government that during the four years it has been in power increased taxes in a way that was both shocking and shameless, table tax reform proposals apparently aimed at restoring a measure of fairness and equity to the system so that the needy in our society could hope for a fair deal.
Mr. Speaker, this Bill also gives us a very clear picture of what is so typical of this Government, and I am referring to the fact that its decisions were always made for the benefit of the wealthy, the elite, and more often than not to the disadvantage of those at the very bottom of the scale, in other words, the poor.
We have also seen this Government hide the thrust of its tax reform, using various measures as a smoke screen. A few months ago, for instance, we had some incredible tax increases, and now we have a Bill which admittedly introduces a number of tax cuts.
My colleague, the Hon. Member for Laval gave an example which very aptly illustrates the situation. The example he gave was this: It's like a thief who steals an old lady's purse, opens it, removes $150, leaves $50 and gives the purse back to the old lady with the remark: I didn't rob you because I gave you back your purse. So I think that illustrates the Government's attitude in the Bill now before the House.
With previous measures the Government put an incredible tax burden on Canadians, and now it proposes a series of tax cuts.
More specifically, Mr. Speaker, over a four-year period there will be a reduction of $11.1 billion in personal income tax, an increase of $4.1 billion in corporate tax and finally, an increase of $5.4 billion in revenues raised by sales and excise tax. On the face of it, this may seem very attractive, but we must realize that considering the present situation, these proposals smack of electioneering, to my mind.
In recent weeks, we have seen what seemed to be a series of tax cuts, marginal though they may be. And there is also the fact that as a result of these measures, taxpayers will be entitled to a refund when they file their returns in April 1989. So all this is being planned to cover two eventualities. If an election is imminent, the Government could say: Look we cut taxes. If they decide not to call an election now or in the weeks to come, they can say next spring: Look at your tax refund. There's proof positive that we managed your tax money and this country both wisely and well.
July 21, 1988

1 think this shows how little respect this Government has for the Canadian people, if it thinks it can make Canadians forget what happened in the past four years. We saw this not long ago in a by-election, when the Conservatives promised incredible amounts of money in order to win votes.
The proposals before the House are altogether unacceptable for any number of reasons.
When we talk about tax reform, I think we should aim for improvement, but this improvement should be tangible and reflect a better distribution of the tax burden, away from those at the bottom of the financial scale to those who are better off.
The main criticisms are of course the fact that the new rate structure and tax brackets are not progressive enough and I think that the best way of illustrating that reality is through the following example: Take the case of a family with an income of $30,000; their effective tax rate would be 31 per cent, which is higher than the rate for a family earning $100,000. The family earning $100,000 would only be taxed at the rate of 29 per cent.
Mr. Speaker, consider also the following fact, which is just as indecent, just as unacceptable and just as unreasonable: Tax reform will allow 60,000 profitable businesses to continue to operate and do business in Canada, without paying one red cent of income tax.
According to the document we were given on tax reform, the number of profit-making companies that do not pay income tax has in fact been reduced from 110,000 to 60,000. Before reform, there were 110,000 compagnies that did not pay tax. With tax reform, there will be 60,000 businesses that turn a profit, that are lucrative, and that certainly contribute to the economy in their region, but they will pay no tax whatsoever. That's the truth, and even if it were the only factor, the only criticism levelled at the bill, I think we should vigorously oppose it.
Of these 60,000 businesses, 35,000 will not be subject to tax because of the deferral of loss provisions, and 25,000 will not pay tax because of their low profits and the various tax incentives still present in the system.
I don't think it is going too far to ask all businesses to put their shoulder to the wheel and take on their share of the tax burden in Canada. The fact that there are 60,000 businesses out there that are profitable, that are going concerns, and that pay no tax seems unacceptable and certainly very inappropriate to me.
Also, Mr. Speaker, with tax reform the Government has brought in a minimum tax. This Government said: It is totally unacceptable and unfair that some Canadian taxpayers manage to pay no tax whatsoever. So what is known as a minimum tax was brought in. And yet in 1986 there were 5,220 taxpayers with incomes of more than $50,000 who did not pay one red cent in income tax. Of these 5,220 taxpayers, 40 earned $250,000 or more, and the Government seems content to have brought about a simple improvement in the matter, since in 1985, there were 7,947 taxpayers with incomes
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of more than $50,000 who also paid no tax. To my way of thinking that sort of thing is totally unacceptable in our tax system.
The Minister of Finance (Mr. Wilson) claims that tax reform will improve the situation, and that 850,000 low-income individuals will be totally tax-exempt. We must understand, Mr. Speaker, that it is possible that 850,000 people will find that they no longer have to pay tax. But we should also understand that over the past four years, the Government has taxed these people unabashedly, and today turns around and says: We are fixing things so that you will no longer have to pay tax.
That dovetails quite neatly with the example my colleague the Member for Laval (Mr. Ricard) gave: We stole from you for quite a while. We'll give you back your purse with a penny in it. That's the proof that we didn't steal from you. That proves that we are generous. But I think that Canadian men and women will not forget what they paid out during the past four years and that they will be able to assess the situation quite accurately.
People have criticized the Bill on another account, and that complaint seems quite well-founded to me. For instance, if we compare the total amounts paid by the taxpayers in 1984 and in 1988, after the tax reform, we see that only households with incomes in excess of $117,000, I could tell you that although there are more than 80,000 people in my riding, those who earn $117,000 a year are few and far between. Well, people who do earn $117,000 a year will pay less tax in 1988 than they did in 1984. These households account for 1 per cent of the Canadian population. So we have families earning $117,000 in 1988 and they will end up paying less tax than they did in 1984. Need I say more? I think this is just one more very obvious and telling example showing that with all such measures this Government has done everything it could to make the rich even richer, to the detriment of poorer families.
Another fact, Mr. Speaker, is that the Government, ever mindful of the upcoming election, said that taxes would be reduced as of July 1. A good many Canadians will notice a marginal decrease, I agree, smaller tax deductions on their pay cheques. But, Mr. Speaker, let us bear in mind that they have been paying too much since January 1988, so much so that if an election is called for next spring these people will again notice that their tax refunds are bigger. As I pointed out earlier, the Government will then be able to say that it has reduced the tax load. That is nothing but hogwash! As it is, the deductions made since January 1988 amount to a grand total of $1 billion which the Conservative Government took right out of the pockets of Canadians, wrongfully because it had no right to collect that money which will have to be refunded when people file their tax returns next year, and of course the Government will not pay any interest on that money.

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Mr. Speaker, I think that Canadians will indeed be able to see for themselves that the over-all impact of the four Conservative budgets and the tax reform will translate into a sharp drop in family benefits. The best example I can give you is that the tax load of individual Canadians has grown a lot heavier than the corporate tax load. Here are some interesting facts and figures: between 1984 and 1985, and 1988 and 1989, the tax burden has been shifting towards individual Canadians. Sure enough, the individual tax load, that is personal income tax plus sales and excise taxes, went up by $26.7 billion during these four years, a staggering increase of 62 per cent, compared with a corporate increase of $2.6 billion, or 28 per cent more. Between 1984 and 1987 therefore, the corporate tax load increased by 28 per cent while personal income taxes went up by 62 per cent.
In addition, for a number of years now the percentage of corporate taxes with respect to total budget revenues has been declining steadily. For example, 20-odd years ago, in 1961-62, corporate taxes accounted for 20.1 per cent of budget revenues. By 1984-85 the figure had dropped to only 13.2 per cent; in 1984-85, only 13.2 per cent of all revenues came from what we might call the corporate sector. This trend has been even more obvious since our Conservative friends took office: this year, barely 11.6 per cent of revenues come from corporations whereas, from 1984 to 1985, the take was 13.2 per cent, $11.6 billion this year. Of course, they could take credit, and quite wrongly, for the fact that a number of jobs were created and that subsequently taxes paid by those new employees fattened government tax revenues. I would like to remind you, Mr. Speaker, that if this is so, then corporations also became more profitable, their profits increased and so their contribution to tax revenues should have gone up likewise.
I think, Mr. Speaker that those few comments show how this Government intends to make people forget those four years in which the administration indulged in an absolutely unbelievable tax grab on the backs of Canadians, and in order to more clearly illustrate, let me give specific figures in specific areas. In the area of indirect taxes, the sales tax was increased from 9 to 10 per cent on October 1st, 1984, not to forget of course that Conservatives came to power in September. On October 1st, 1984, they increased the sales tax from 9 to 10 per cent; as if this were not enough, on January 1st, 1986, they raised it from 10 to 11 per cent; and because this was still not enough, four months later, they increased the tax from 11 to 12 per cent. And on each occasion this brought in $1 billion here, $1 billion there, and another $1 billion. Who is paying the sales tax? I have no hesitation in recognizing that the rich, the less affluent and the poor pay it. But it must be understood that the sales tax is much harder, much more cruel to people near the poverty line. The Government got $3 billion through that sales tax hike. There were also tax increases on soft drinks, as everyone will recall, on dental apparatus, candies and sweets.
Those two increases that came in July 1985 and in July 1987 brought in $460 million. There again, everyone must recognize that people who eat those kinds of snacks, people
who use that type of product, people who eat that kind of food are mainly the general population, in other words people who do not have the ability to pay what this Government asked from them.
On the other hand, a tax increase that was perhaps much more directly targetted to those who have the ability to pay, as I believe everyone will agree, is the progressive increase on air travel. Air travellers-and this may not mean everyone but in the main I think we can say as a rule that they have greater ability to pay than the majority of the people who never boarded an airplane. However that tax only brought in $55 million. Fifty five million from a tax that at the outset was aimed at a much richer, much more affluent category of taxpayers out of which the Government could have gotten much more than $55 million.
Also then increased from 8 to 12 per cent was the tax on paint, wallpaper and toys. There again, this brought in $60 million. We also got a whole series of increases on the tax on gas-2 cents, 1 cent, 1 cent, 1 cent, so much so that over-all this brought upwards of $2 billion-$2 billion in tax increases. And finally, we were also hit by a number, more specifically by four increases on spirits and tobacco, which brought in nearly $1 billion.
There was a whole series of such increases that all together brought in billions and billions of dollars, and now that an election is in sight the Government suggests: We are going to lower taxes somewhat in order to hopefully, although this is in no way certain, try and get the support of Canadians. I believe that if the Government has the courage to listen to our urgings and call an election, I think it will have the true answer to its legislation, its tax reform.


David Kilgour: Mr. Speaker, I find it rather strange that the Liberal Party representative should deal with the tax reform issue in the House, because we are in the process of reforming the system which his Government and party had created over the years. Some 20 years ago, for instance, the income tax paid by individual Canadians accounted for nearly 25 per cent of federal revenues, while the income tax paid by corporations accounted for nearly 75 per cent. When the Liberal Party was in power, and that includes the period under their current leader (Mr. Turner) at least for now, they completely reversed the situation to the point that in 1984, personal income tax accounted for 75 per cent of federal revenues, while corporate income tax accounted for 25 per cent. If the statement I have just made is true, and I suggest it is, how can his Party, if it wants to keep some credibility, now defend and debate in the House this most important issue for Canadians?


M. Tardif:: Mr. Speaker, the answer is quite simple: my Party has always been concerned first and foremost with the need to protect the underprivileged, the low-income people. It is a fact that over the years, changes must be made to ensure a proper balance between the two main classes of taxpayers.
July 21, 1988

Changes must be made, and I suggest it is the responsibility of any government to make them and take steps to remedy an unfair situation.
It should be understood that when our friends opposite took over the Government in 1984, they made a whole series of promises, insisting that they would re-establish the balance as the U.S. Administration had done, as the provincial governments had done or were planning to do, so that those with the ability to pay would carry a heavier load than those who have lost part of their purchasing power.
I must repeat that whenever the Liberal Party introduced measures, it always took into account the need to protect the underprivileged, and I think my hon. friend will recognize that almost all our social legislation was introduced in Canada under a Liberal administration.
We should also realize that these taxes are imposed on Canadian men and women who just cannot afford these wild increases. On the other hand, we can see that the federal government is systematically getting out of regional development. Its many deregulation initiatives will cause irreparable damage and make things worse for the underprivileged while benefiting the rich fat corporations. I suggest this is the most distinctive feature of this Government.


David Kilgour: Mr. Speaker, I appreciate the Hon. Member's answer, but we do know what policies the Liberal Party is against. Let us talk now for instance about the sales tax? Could he tell us whether the Liberal Party, besides being in favour of the Senate, for we all know that the Liberal Party is definitely in favour of unlimited rights for the Senate, could he tell us what the Liberal Party thinks of the sales tax? Should the Government increase or reduce the sales taxes? Could he tell us what his Party's position is on this issue?


Alain Tardif: Mr. Speaker, it is clear on our side that we are soundly against any measure to tax food, to impose a tax on people who do not have the capacity to pay. We must recognize that in some cases, a certain number of problems arise with taxation and with the tax base, and that, in effect, actions taken in the pursuit of some objectives have an unintended impact on some people.
So I think that in such cases, which are relatively easy to pinpoint, and which can be numerous in some instances, something can be done to restore equity.
Tax credits are one example. Other measures can also be taken to correct an initiative which may initially be intended to bring about a certain balance, a certain degree of equity, but which needs to be tempered by indirect measures.
On the other hand, Mr. Speaker, there is also the fact that Canadian men and women . . . with regard to taxes, I can take as an example something that comes up when we canvass our ridings during an election campaign, and I must say that I look forward to being in such a position soon. It is the case of the minimum wage earner with two, three or four children who reminds his Member that he pays the same price as he does for butter and that when he can afford to buy steak he also pays the same price. I think that the message is quite clear and that
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it shows how cruel indirect taxes are, how wicked they can be for people who just don't have the capacity to face that kind of expenditure.


Cyril Keeper: Mr. Speaker, I welcome the opportunity to enter this debate primarily because the issue is fundamental to the direction of government. It also, of course, interests the average Canadian. There is no question that with the exception of employment, there is no issue of more vital importance to the people who live in my riding of Winnipeg North Centre than the issue of taxation. Therefore, I want to make quite clear where my Party and I stand on this issue and how 1 see the Government's approach to taxes.
What I hear from people is that they want and need justice in the tax system. They want tax justice rather than tax burdens. They want tax fairness rather than tax politics. I have concluded, and I am sure other ordinary Canadians have done the same, that the Government is playing politics with the tax system. When the Conservatives were elected they raised taxes in Budget after Budget after Budget. They raised taxes to the extent of $1,500 for the average family. Now that we are approaching a federal election, now that the Prime Minister (Mr. Mulroney) is searching for the courage to call the election, now that he is peeking around the corners testing the winds to see whether or not it is all right to have an election, the Conservative Government has changed its direction on taxes and is going to give a few dollars to Canadians. After taking thousands of dollars out of the pockets of ordinary Canadians the Tories are going to give a few back.
The Tories hope Canadians will have very short memories. They hope the average Canadian will look at his or her pay cheque today and see that in comparison with the month before their take-home pay has gone up because federal taxes have dropped. The Government is hoping they will see that and say: "We have a good Government, we have a Government for the people". That is what the Government hopes. If Canadians have short-term memories and difficulty remembering as far as a few years back, in all likelihood they would come to that conclusion. However, that would be a very short-term perspective. I am sure it will not be the perspective of most Canadians because the average Canadian family knows that it has less disposable income today than it had four years ago and that it is worse off with regard to the tax burden than it was four years ago.
Those Canadians who voted for the Prime Minister, the Conservative Party, and change in 1984, voted for tax fairness. They were promised tax fairness and tax justice. They will remember that the same Government took the disposable income out of their pockets. It picked Canadians' pockets of the cash they had to buy the things they need for their families. This Government has raised taxes for the average Canadian family by $1,500 in a series of Budgets over the last four years.

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Canadians have good memories and will know who to hold accountable. If the Government thinks Canadians will suddenly forget who took the money out of their pockets, just because they are being given a few coins back today, it is underestimating Canadians. Canadians will know that they are being toyed with and being underestimated. They will see through the cynical gestures of the Government and will measure the Government accordingly. They will know that the Government is playing politics with taxes in an attempt to win the next election rather than being committed to justice in economics and taxation for the ordinary family.
Canadians must remember to take the long look if they want just government and just taxes. I believe they will do that. I know that the families who live in my riding are fed up with constantly increasing taxes and having to carry the burden of the tax system while others are getting away scot-free. They know that others are being given gifts by the Government.

Mr. Speaker, I want to take a different approach to the issue. This Government is now trying to make Canadians forget the fact that it increased taxes, but who else would be responsible for such an increase? Is there an alternative for Canadians? The Liberal Member who spoke before me promised tax justice. Is the Liberal Party an alternative? Is it offering the possibility of tax justice?
While on the subject, I hope Canadians will remember the Liberals' actions when they were in power. It was a Liberal Government which introduced that system, reduced taxes for corporations and increased them for individuals.
It was a Liberal Government which increased taxes for ordinary families while reducing them for wealthy Canadians. It is not an alternative, Mr. Speaker, since the Liberal Party actually established a "Conservative" economic policy in tax matters. For that reason, Mr. Speaker, despite the wonderful promises made by Liberals when they were in the Opposition, once in power, they did not offer an alternative nor a true change of direction to ordinary people. They certainly make big promises, just like Brian Mulroney, the current Conservative Prime Minister, did! Both the Conservatives and the Liberals made big promises that they did not keep after being elected.
Mr. Speaker, people should remember that it was Mr. Turner, current Leader of the Liberal Party who, as Minister of Finance in a Liberal Government, introduced the policy of giving out tax exemptions to large corporations. Under that policy, corporations that make hundreds of millions of dollars in profit pay no taxes at all. That situation is the result of a policy put forward by a former Liberal Minister of Finance,
who is now Leader of the Opposition and the Liberal Party, which is now pretending to be in favor of tax justice-

I want to take a look at the issue of justice in the tax system from another perspective, from the perspective of who benefits from and who is hurt by the tax system. Clearly the rich and powerful and the largest corporations in the country do quite well by the tax regime which both Liberal and Conservative Governments have put in place.
We know that many individuals who earn over $100,000 a year pay not one cent of tax. We know that large and powerful corporations which make hundreds of millions of dollars in profit pay not one cent in tax. I am not talking about taxing corporations which are struggling to survive and to provide employment. I am talking about powerful, wealthy, lucrative, profit making corporations which are making hundreds of millions in profits and are paying no taxes.
We ask why, not only from the perspective of justice in the tax system but from the perspective of what we give up by giving up these revenues. What opportunities do we lose by giving up the revenues which could be collected from very wealthy Canadians who earn over $100,000 a year and large profit-making corporations? What could we be doing with those revenues? What could we be doing to introduce a greater measure of justice in Canadian society?
I would like people, including Members of this House and in particular members of the Government, to ask themselves that question. What could be done with the millions of dollars of revenue that is forgone when wealthy individuals and profitable corporations are allowed to get away with paying no taxes?
The Auditor General is an objective, independent officer of the House. He has identified some $40 billion of tax write-offs whose success in achieving their stated economic benefits are questionable. For example, it is questionable whether some of these write-offs achieved their objective of creating employment or enhancing research and development to provide a stronger economy.
While we ought to retain those tax incentives that achieve their objectives and produce the required results, tax incentives such as those the Auditor General pointed to, which do not achieve the public objective for which they were implemented and only benefit the interest of corporations and the wealthy who use them, ought to be closed. The revenues saved from closing those loopholes should be used to introduce a measure of economic and social justice in this country. I want Canadians to think about how they would use those revenues.
July 21, 1988

Many people in my riding complain about the heavy burden of taxation. While they had disposable income to spend as they wished some four or five years ago, all their money is used today on the necessities of life. Those people would like some tax relief.
1 spoke to a man in my riding who some four or five years ago was earning the minimum wage of $5 an hour and supporting a family. Now his wage is about $11 an hour, but he finds that his income has not gone up because of the taxes coming from his pocket. The Government has continued to increase the burden of tax so that he has received no benefit from the increase in wages.
1 have also talked to people in my riding who are known as yuppies. A married couple earning $40,000 a year each are discovering that rather than being able to afford the luxuries of life, their salaries are actually dropping as their taxes continue to rise.
At least some portion gained from the closure of these loopholes should be used for tax relief. The tax relief gained by requiring individuals earning over $100,000 a year and powerful corporations to pay tax would introduce a greater measure of economic justice and social justice in our society.
What about the homeless? While we have been drawing attention to the fact that the average Canadian in a city like Toronto and many other cities can hardly afford a house, we forget that there are many individuals, as well as families who have no house. These people deserve a roof over their head. Those children deserve a roof over their head. I suggest that some of the revenues gained from closing unproductive tax incentives should be used to provide that kind of accommodation.
Why not use those revenues to provide for the hungry in our society, or to give training to the functionally illiterate in our society?
We need an alternative under tax reform that will not be satisfied by the political games that the Conservatives are playing with the tax system. The Conservatives increased the burden of taxation when they were elected. Now they are giving back a few pennies as an election approaches. Canadians will not be satisfied with the promises of the Liberal Party that started us down that road.
Canadians must be made aware of the unjust tax system that increases the burden on ordinary families while it allows the rich and the powerful to go tax-free. We need a citizenry that will demand tax reform, with a Party that will take up the fight with them in order to bring about real justice in a tax system so that everyone will pay their fair share. Such an approach will mean a greater measure of economic and social justice so that no family will have to go without a roof over its head and no child in this society will have to live on the streets. I call for a serious approach to tax justice so that those who have pay and those who do not have receive the help they need.
Royal Assent
The Conservatives have only increased the tax burden on ordinary people. As we approach an election, they provide a little relief in the hope that people will forget who increased their taxes originally. The Liberal Party only gives big promises when in opposition but acts like Conservatives when in government.
Let us debate this legislation thoroughly so that Canadians will be aware of the nature of the tax system today. When they realize that large and powerful corporations earning millions of dollars in profit pay no taxes, they will demand change. When Canadians become aware that people earning over $100,000 a year pay no tax, they will demand justice.
Canadians know that they are paying more taxes today than they were four years ago when the Conservatives were first elected. They know they have less disposable income than they had four years ago. The election is the opportunity for them to hold the Government accountable for the fact that they have less to meet their needs than they had four years ago.
I call upon the people of Canada to wake this Government up and let it know that Canadians are interested in tax relief, not politics played with the tax system. Canadians are interested in tax fairness, not political stratagems. They are interested in fairness, not increased tax burdens. They want the Government to collect its just, fair revenues so that it can use them to bring about greater social justice in Canadian society, so that no one will have to go without a roof over his head or hungry, so that people can be trained to use their full capacity. We need tax justice and social justice in this country. We need a NDP Government.


MESSAGE FROM THE SENATE
Mr. Deputy Speaker:: I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed Bill C-75, an Act to implement an agreement between the Government of Canada and the Government of Nova Scotia on offshore petroleum resource management and revenue sharing and to make related and consequential amendments.
And a message has also been received from the Senate informing the House:
1.	That the Senate does not insist on its amendments to Bill C-55, an Act to amend the Immigration Act, 1976 and to amend other Acts in consequence thereof and agrees to the amendments made by that House to the Bill; and
2.	That the Senate does not insist on its amendments to Bill C-84, an Act to amend the Immigration Act, 1976 and the Criminal Code in consequence thereof, and agrees to the amendements made by that House to the Bill.

July 21, 1988
Income Tax Act and Related Acts THE ROYAL ASSENT


Mr. Deputy Speaker:: 1 have the honour to inform the House that a communication has been received as follows:
Sir,
1 have the honour to inform you that the Honourable A. Lamer, Puisne Judge of the Supreme Court of Canada, in his capacity as Deputy Governor General, will proceed to the Senate Chamber today, the 21st day of July 1988, at 5:00 p.m., for the purpose of giving Royal Assent to certain Bills.
Yours sincerely,
Jean M. Sevigny Deputy Secretary, Operations




[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson (Etobicoke Centre) that Bill C-139, an Act to amend the Income Tax Act, the Canada Pension Plan, the Unemployment Insurance Act, 1971, the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act, 1977 and certain related Acts, be read the second time and referred to the Standing Committee on Finance and Economic Affairs; and the amendment of Mr. Garneau (p. 17724), and the subamendment of Mr. Boudria (p. 17770).
Mr. Deputy Speaker:: On questions and comments, the Hon. Member for Crowfoot.


Arnold John Malone: Mr. Speaker, the Hon. Member for Winnipeg North Centre (Mr. Keeper) played on one of the simplest of emotions that could ever be portrayed before a citizen of any democratic country. He said essentially that citizens do not like paying taxes. That is quite understandable. No citizen likes to pay taxes if he or she thinks there is some legitimate way of not doing so.
The Member also played on the emotion that the hungry, the indigent, those who live in the streets, ought to have some significant assistance and help. I want to say to the Hon. Member that no Member of Parliament, no matter to what political Party they aspire or work for, believe that these grossly wrong social injustices are appropriate in any society.
Having said that, let me also remind the Hon. Member that when our Government came to office in 1984, and it is still a fact today, one out of every three tax dollars did nothing other than service the accumulative debt of this country.
The Hon. Member cannot have it both ways. Let us pretend for the moment that there was no debt. In that case, Canadians could pay one-third less taxes or, alternatively, pay for one-third more services. I would be greatly interested to know
if the Hon. Member for Winnipeg North Centre believes it is appropriate that one out of every three dollars that every citizen pays in taxes to the Government of Canada should be used for nothing other than to pay interest on debt? Is that good value for Canadians? Is that why we should pay our taxes? If the answer to that is no, if the Member says, "no, that is not good value", then how is he going to bring that debt down?
Canadians should be told that it is a burden placed there by a Government past because of its wild spending habits in the years from 1972 to 1984, and that it was supported by the NDP. The NDP endorsed the Government's National Energy Program. It was those kinds of expenditures that drove the debt, year after year, higher and higher. I would like to hear the Hon. Member's response.


Cyril Keeper: Let me respond then.


Arnold John Malone: He knows that the coming into office of the present Prime Minister (Mr. Mulroney) is what brought about the trend, to where almost 1.5 million more Canadians are employed. They are now in a position to pay taxes, to help spread the burden, and to bring down the debt.
I ask the Hon. Member: Is a major significant debt good for Canada? If the answer to that is no, then what other option is there to pay that debt other than what we have already succeeded in doing, that is, increasing employment in this country and making sure that all Canadians together shoulder the burden to get rid of the albatross that takes one out of three of our tax dollars?


Cyril Keeper: I really want to thank the Member for posing that question. I think it is an important one. I want to answer it by pointing to the behaviour of two Governments. The first Government was the Government of Tommy Douglas. When Tommy Douglas was elected during the Great Depression, the Province of Saskatchewan was deeply in debt. Tommy Douglas was a man, a leader who was concerned about social economic justice. He managed over the years to bring down that debt. At the same time, he increased social services and social justice in the Province of Saskatchewan.
To pose the false dichotomy of bringing down debt and increasing social justice is simply a rhetorical trick the Member seeks to play. I want to point to the behaviour of his own Government. How can this Member stand and point the finger at the New Democratic Party, saying that we are responsible for the debt when his Party has just gone through the process of buying a by-election? It was a "buy-election" in Lac-Saint-Jean. It cost hundreds of millions of dollars. That Party is now in the process of attempting to apply that very same strategy, that "buy-election" strategy, to the whole of Canada. That Party is seeking to buy the Canadian voters with their own money.
July 21, 1988

1 would like the Eton. Member to explain how the Government can keep down the deficit when it seeks to buy elections. The Government is going to bankrupt the country without any measurable change in its social make-up. The only thing the Government is spending its money on is seeking to get back into office. If it would invest that money properly in people, we would not have the hungry, the homeless, and the functionally illiterate.


Sheila Maureen Copps: Mr. Speaker, I too would like to ask the Member of the New Democratic Party a question. In the course of the debate, the NDP made certain comments about the tax policies of previous Liberal Governments, as well as those of the current Government.
I would like to ask the Hon. Member what the NDP thinks of the decision by the socialist Government of New Zealand to impose a tax on food. What can we expect if members of his Party are elected to government?


Cyril Keeper: Mr. Speaker, the Hon. Member is seeking to deflect the criticism which justly belongs to the Conservative Party and the Conservative Government onto her political competitors. She knows she has nothing to worry about in terms of political competition from the Conservative Party. What she has to worry about is the increase in support in the country for the New Democratic Party. She is simply trying to pass on the sins of Tories on to the backs of New Democrats. That will not wash. People know that we in this Party fought against the Government's proposal to tax food. We are glad that public pressure caused the Government to retreat from the odious idea of taxing food.
It will not wash to try to corner New Democrats because the Hon. Member feels that she is threatened in her political career and her political neighbourhood by the increasing public support for New Democrats and by the fact that people know that this Party is seeking real economic justice. They know that this Party is seeking real economic reform. They know that this Party wants the rich and powerful, as well as the corporations, which make profits in this country, to pay taxes so that we can have some tax relief for the ordinary Canadian family. In this way we could have the types of programs that would bring about better social justice.


David Kilgour: Mr. Speaker, I know that the Hon. Member is quite sincere. He has been around to talk to his constituents. They are concerned about rising taxes. He and I have discussed that.
Given the fact that the Schreyer NDP Government in Manitoba drove many Manitobans to Alberta because of its anti-taxation and anti-business policies; given the fact that the Barrett Government in British Columbia did the same thing to many British Columbians, again to the advantage of Alberta;
Income Tax Act and Related Acts
and given the fact that his own Government, the Pawley Government in Manitoba, raised taxes significantly for all people of all incomes in Manitoba, including my mother who pays taxes, why does he think that Canadians would be so foolish to elect a radical democratic socialist Government that would only do for all of Canada what NDP Governments have done in three of the provinces in western Canada?


Cyril Keeper: Mr. Speaker, in answer to the Hon. Member's question I want to start out by admitting that, yes, the Government in Manitoba raised taxes too much. That is a point of view I share with my constituents. In fact, the leadership of the Party going into the last election realized that. They sought to change direction. It is unfortunate but the Party went down to defeat. Yes, the NDP is capable of making mistakes. We are also capable of recognizing them. I wish that this Government would recognize when it has made mistakes.
The Hon. Member said that the Schreyer Government turned people away from Manitoba to Alberta. That is wrong. The Government from which Manitobans fled was the Sterling Lyon Tory Government. That was when the population of Manitoba decreased. It was only when Howard Pawley was reelected that the population of Manitoba started to increase once again.
Let me point out to the Hon. Member, if he is seeking to attack in a false way Mr. Schreyer, who was a former Premier of Manitoba, that many families in Manitoba still have hanging on their walls a photo of the former Premier. I have seen no family homes in which the picture of Sterling Lyon hangs on the wall, or pictures of Brian Mulroney for that matter. If one attacks Schreyer, one attacks the very heart of Manitoba. I ask the Hon. Member to keep that in mind.


Mr. Deputy Speaker:: Resuming debate with the Hon. Member for Hamilton East.


Sheila Maureen Copps: Mr. Speaker, I am sorry that the previous spokesman did not respond to my question about the socialist Government's decision to impose a tax on food. I think a great many questions that Canadians legitimately ask themselves begin with: "What would you do in the place of the Government?" I was most disturbed when the Hon. Member brought this on himself by suggesting that when the Liberals were in power we had somehow imposed this kind of tax burden on middle-income and lower-income Canadians and that in fact we were like the Conservatives. 1 suggest to the Hon. Member that if we look at the legacy of the Liberal Party, beginning with the introduction of national medicare, as well as with the decision to increase tax credits for those who are at the lowest end of the income scale in relation to child benefits, yes, they were supported by the NDP-


Michael Morris Cassidy: Proposed by the NDP.

July 21, 1988
Income Tax Act and Related Acts


Sheila Maureen Copps: -but they were Liberal programs introduced by a Liberal Government in a national-


Michael Morris Cassidy: Medicare came first from the NDP, let us get it straight.


Sheila Maureen Copps: As a matter of fact, the first Bill to deal with equal pay for work of equal value was brought forward by the Hon. Margaret Campbell who was a Member of the Legislature of the Province of Ontario.


Michael Morris Cassidy: Let's talk about medicare.


Sheila Maureen Copps: Talking about medicare, what Party introduced medicare?


Michael Morris Cassidy: Medicare came from the NDP in Saskatchewan.


Sheila Maureen Copps: I can understand why the NDP is a little bit nervous about the positions and programs of the Liberal Party. It is because, hopefully, Canadians are looking at the Liberal Party as an alternative Government. People have the right to examine policies of the Liberal Party.
However, I would like to speak for a moment about the hypocrisy of the NDP. I refer to the issue of flow-through shares. Some Hon. Members may remember the hypocrisy of the NDP when it came to the issue of flow-through shares. It is important that the public pay attention to this because it was the same Member, the Hon. Member for Ottawa Centre (Mr. Cassidy), who day after day stood in the House and said: "We have to eliminate all corporate tax breaks. We have to get rid of the corporate tax rip-off. Put the tax burden on the corporations and take it away from the individual". He in fact did an absolute flip-flop on flow-through shares.
The flow-through shares measure was introduced by a Liberal Government. It was a policy introduced to try to stimulate the creation of development in northern Canada, in particular in northern Ontario and northern Quebec. It permitted small Canadian mining companies to be able to get an up-front tax adjustment or, in fact, tax abeyance if they were investing the money in looking for Canadian mineral production. It was very successful. It was a program that created jobs for northern Canadians. It was so successful that one of the first things the Conservative Government wanted to do with this so-called tax reform was to cut it out. On the one hand members of the NDP, day after day, week after week, and month after month, have stood in the House and said: "No corporate tax deductions. No loopholes". Yet on the other hand it took one meeting with the Canadian Mining Association for the NDP to change its position completely. One day members of that Party were against flow-through shares and the next they were in favour of them. They were in favour of them because they saw that in certain circumstances the judicious use of tax incentives can encourage Canadian companies to remain competitive and can encourage small Canadian businesses to grow.
I say to the NDP: "I do not mind, take a position, but for Heaven's sake do not be so hypocritical to the people of Canada. On the one hand do not say that you do not believe in any tax exemption, any tax breaks, and on the other hand when the flow-through shares are introduced"-


Some Hon. Members:: Oh, oh!


Sheila Maureen Copps: I saw the House Leader for the NDP wearing a button which stated: "Go with the Flow".


Michael Morris Cassidy: I wore one too.


Sheila Maureen Copps: The Hon. Member wore the button in the same week that he was standing in the House saying that we should eliminate all corporate tax advantages. I want to say to the NDP that it was a Liberal Government that permitted the tremendous success story of the Canadian steel industry, including the Steel Company of Canada-


Mr. Deputy Speaker:: I regret to interrupt the Hon. Member for Hamilton East. It is 5 p.m. She will have five more minutes in her speech after Private Members' Business.
I recognize the Hon. Minister of State for the Treasury Board on a point of order.


BUSINESS OF THE HOUSE
Douglas Grinslade Lewis: Mr. Speaker, there have been discussions among the Parties, and I think Your Honour would find that there would be agreement to the following. When we drafted this it was before 5 p.m. so that is intended to mean after Private Members' Hour.
This afternoon and this evening we shall continue debate on Bill C-139, the income tax reform Bill.
Should the House finish debate on this matter this evening the vote would be deferred until 6 p.m. on Monday, July 25, 1988. In the event that the House does finish debate on Bill C-139 this evening, the House will not sit tomorrow, Friday, July 22, 1988. However, the Journals will be open on Friday, July 22, to receive any motions and other documents which are normally received.
On Monday, July 25, 1988, at 11 a.m., the House will consider Bill C-136, the Broadcasting Act, and complete debate before 1 p.m. After Question Period on Monday, July 25, the House will consider third reading of Bill C-82, the Lobbyists Registration Act, and complete the debate on that Bill before 5 p.m. All votes will be deferred until 6 p.m. The House will then recess until 11 a.m. on Tuesday, July 26. Between the hours of 11 a.m. and 1 p.m., July 26, the House shall consider other business to be arranged among the Parties.
July 21, 1988

Directly after Question Period on Tuesday, July 26, 1988, the House will commence debate on the abortion motion, and such debate shall continue within the normal hours of debate until the final question is called. I would point out, Mr. Speaker, that this would be pursuant to the hours of sitting adopted June 20, 1988. The House will then consider a motion to adjourn until August 10, 1988.


Herbert Eser (Herb) Gray: Mr. Speaker, this statement by the Deputy Government House Leader reflects the discussions that have been held. There is one part of the statement that I believe requires some clarification, in order to make the record complete. As stated, on Monday, July 25, 1988, at 11 a.m., the House will consider Bill C-136, the Broadcasting Act, and complete debate before 1 p.m. The Government House Leader should state exactly what stage of debate he proposes completing before 1 p.m.


Douglas Grinslade Lewis: I believe it was intended that that would be second reading, Mr. Speaker.


Michael Morris Cassidy: I, too, rise on a point of clarification, Mr. Speaker. There were several votes anticipated on the subamendments to the motion on Bill C-139. From what the House Leader has stated, I would assume that there has been some agreement that those will be voice votes, because any vote if called would then defer further debate until 6 p.m. on Monday. Has that problem been ironed out?


Douglas Grinslade Lewis: 1 must confess that I discussed that with the House Leader of the Official Opposition. I read the text of what 1 have just stated to the House Leader of the NDP. We did not discuss that. I would suggest that it is something that perhaps we could discuss later and come to some accommodation on. The Hon. Member makes a valid point. If recorded divisions are called, there would have to be some accommodation to reach an end to this at some time. That is what was intended, that is the sense of the discussion we had, and we will make sure that it is clarified.


Michael Morris Cassidy: My desire to have votes is tempered by my realization that it would do the House good not to be here tomorrow, so perhaps it can be worked out privately.


Mr. Deputy Speaker:: Order. It being five o'clock, the House will now proceed to the consideration of Private Members' Business, as listed on today's Order Paper.

The House has heard the terms of the motion proposed by the Hon. Minister of State. Is it the pleasure of the House to agree to the motion by unanimous consent?


Some Hon. Members:: Agreed.


Mr. Deputy Speaker:: It is agreed and so ordered.
Electoral Boundaries Readjustment Act [Translation]


Mr. Deputy Speaker:: In case we sit tomorrow, it is my duty to read the written notice I received from the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart) informing me he will be unable to move his motion under private Members' Business, on Friday, July 22, 1988.
As it has not been possible to arrange an exchange of positions in the order of precedence pursuant to Standing Order 39,1 instruct the Table to put that item at the bottom of the order of precedence.
Since the notice will be withdrawn, private Members' hour will be cancelled and, pursuant to Standing Order 39(3)(b), the House will continue with the business before it prior to private Members' hour.



PRIVATE MEMBERS' BUSINESS


[Stage Direction]
Mrs. Claudy Mailly (Gatineau), by unanimous consent, moved that Bill C-308, an Act to change the name of the electoral district of Chapleau, be read the second time and, by unanimous consent, referred to Committee of the Whole.
John Napier Turner: I rise on a point of order, Mr. Speaker, on the request of the Hon. Member for Gatineau (Mrs. Mailly). I recognize that we may be setting some type of precedent in the House by bringing this Bill forward so quickly through all stages. There are many other Private Members' Bills waiting to come through the House in a similar fashion. Within the context of parliamentary reform, we should recognize that we are setting a precedent. I support the Bill of the Hon. Member. I have no objections to it, but I am concerned about the process. In spite of that, I will give my consent to allow it to proceed, recognizing that we are setting a precedent that may tend to cause other private Members to wish to bring their own Bills forward in a similar fashion.


Jean-Robert Gauthier: I rise on the same point of order, Mr. Speaker. I would like to disagree with my hon. colleague, the Hon. Member for Ottawa-Carleton (Mr. Turner). There is no precedent being set here. This has been going on for at least 16 years. I changed the name of my riding some 14 years ago with the same procedure, and over the years it has been done by other Members. There are no precedents being set. However, I appreciate the fact that the Hon. Member gives his concurrence.


Mr. Deputy Speaker:: I would like to confirm that unanimous consent does not in fact constitute a precedent.
Is it the pleasure of the House to adopt the motion?

July 21, 1988
Canada Post Corporation


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the second time and, by unanimous consent, the House went into committee thereon, Mr. Danis in the chair.
Clause 1 and 2 agreed to.
Title agreed to.
Bill reported, read the third time and passed.
Mrs. Mailly:: Mr. Speaker, I don't want to abuse the generosity of my colleague from Burnaby (Mr. Robinson) who has been kind enough to give me a few minutes to have my Bill passed. 1 would also like to thank the Hon. Member for Ottawa-Vanier (Mr. Gauthier) who has kindly accepted to help me, and also the Hon. Member for Kamloops-Shuswap (Mr. Riis), the NPD House leader, for his support, the members of my party caucus who, yesterday, gave me their support, and you, Mr. Speaker, for your good work. I will always cherish this moment.
Today is my son's twenty-first birthday, and I wish to dedicate this to him as a gift.


CANADA POST CORPORATION
Mr. Svend J. Robinson (Burnaby) moved:: That, in the opinion of this House, the government should order Canada Post Corporation to cease immediately its plans to remove a number of street mailboxes in Burnaby, B.C., and further, that the government order the Corporation to consult fully with the municipal council, local Members of Parliament, and the residents and businesses affected before any future steps are taken to close street mailboxes in Burnaby.
He said: Mr. Speaker, I am pleased to rise to participate in the debate on this important motion with respect to postal service in my constituency of Burnaby. 1 tabled this motion sometime ago, in February of last year, in response to a series of steps that were taken by Canada Post that adversely affected the quality of postal service in my constituency. Just briefly, what happened is that notice was given that many street mailboxes throughout my constituency would in fact be removed. This was done in a manner which involved no consultation whatsoever with the residents that were affected. It was done in a way which really demonstrated contempt for the residents of that community. One day the street mailboxes were there, the next they were gone.
Quite understandably there was an outcry in the community. The businesses that were affected, the residents that were
affected, and the local council, all urged Canada Post to reconsider this decision.
I took up the battle on behalf of the residents of Burnaby on this important question. Following that fortunately some sense prevailed, some sanity prevailed, and Canada Post was persuaded to restore approximately 50 of the street mailboxes that had been removed.
Some might ask why this motion is still on the Order Paper if in fact some steps were taken to resolve the dispute which the motion addresses.



THE ROYAL ASSENT

[Stage Direction]
[ Translation]
A message was delivered by the Gentleman Usher of the Black Rod as follows:
Mr. Speaker, the Honourable Deputy to the Governor General desires the immediate attendance of this honourable House in the chamber of the honourable Senate.
Accordingly, Mr. Deputy Speaker with the House went up to the Senate Chamber. And being returned:
Mr. Deputy Speaker:: I have the honour to inform the House that when the House went up to the Senate Chamber the Deputy Governor General was pleased to give, in Her Majesty's name, the Royal Assent to the following Bills:
Bill C-75, an Act to implement an agreement between the Government of Canada and the Government of Nova Scotia on offshore petroleum resource management and revenue sharing and to make related and consequential amendments-Chapter 28, 1988.
Bill C-77, an Act to authorize the taking of special temporary measures to ensure safety and security during national emergencies and to amend other Acts in consequence thereof-Chapter 29, 1988.
Bill C-89, an Act to amend the Criminal Code (victims of crime)-Chapter 30, 1988.
Bill C-93, an Act for the preservation of and enhancement of multicultural-ism in Canada-Chapter 31, 1988.
Bill C- 111, an Act to amend the National Housing Act and the Canada Mortgage and Housing Corporation Act and to repeal certain enactments in consequence thereof-Chapter 32, 1988.
Bill C-124, an Act to amend the Canada Labour Code-Chapter 33, 1988.
Bill C-137, an Act to provide for incentives to assist in financing exploration for ministerial resources and hydrocarbons in Canada and to amend the Canadian Exploration and Development Incentive Program Act-Chapter 34, 1988.
Bill C-55 an Act to amend the Immigration Act, 1976 and to amend other Acts in consequence thereof-Chapter 35, 1988.
Bill C-84, an act to amend the Immigration Act, 1976 and the Criminal Code in consequence thereof, Chapter 36, 1988.
Bill S-17, an Act to authorize the Montreal Trust Company of Canada to be continued as a corporation under the laws of the Province of Quebec.
July 21, 1988



PRIVATE MEMBERS' BUSINESS


[Stage Direction]
OPPOSITION TO REMOVAL OF MAILBOXES IN BURNABY, B.C. The House resumed consideration of the motion of Mr. Robinson:
That, in the opinion of this House, the Government should order Canada Post Corporation to cease immediately its plans to remove a number of street mailboxes in Burnaby, B.C., and further, that the government order the Corporation to consult fully with the municipal council, local Members of Parliament, and the residents and businesses affected before any future steps are taken to close street mailboxes in Burnaby.
Mr. Deputy Speaker:: Resuming debate with the Hon. Member for Burnaby. He will be given full time for his speech.


Svend Johannes Robinson: Mr. Speaker, when one is interrupted by Her Majesty, one always yields graciously.
Before the knock on the door I was indicating that in the early part of 1987 Canada Post had removed a number of street mailboxes from my constituency of Burnaby. I intervened on behalf of my constituents and was successful in having a number of them restored. This affected both residents in the area as well as a number of businesses, including Transport Equipment Control Systems whose President, Mr. Bob Nakashima, sent a note along saying that he appreciated very much the work that 1 had done on his behalf as his Member of Parliament to restore postal service in his area.
Some might ask why is it necessary to pursue this question of postal service at this time some 15 or 16 months later. Under the Conservative Government the quality of postal services has declined and the cost has gone up substantially. This is still a very timely and an important question.
New Democrats have taken a clear stand on the Post Office, particularly the Hon. Member for Winnipeg North Centre (Mr. Keeper) and the Hon. Member for Hamilton Mountain (Ms. Dewar). The New Democratic Party strongly believes that door-to-door delivery should be extended to all suburban residents and that all urban residents should be treated equally. We have opposed the corporate plan of Canada Post since it was approved by the Conservative Cabinet and tabled in the House last fall.
Let us look at some of the elements of this corporate plan which will have a disastrous effect on the quality of postal service in Canada. It calls for the elimination of 8,700 jobs and the closure of some 5,200 rural post offices across Canada. There will be an increased centralization of mail sorting, which will lead to even more delays in mail delivery. There will be the privatization of counter services to inadequate retail outlets and the replacement of door-to-door mail delivery with so-called supermailboxes.
In other words, effectively what Canada Post is doing is dismantling the service over a period of some 10 years. As New Democrats we believe in this public service. We believe that the Post Office is an important and a vital service. We believe that we should allow the Post Office to expand and get into areas in which it can make money, gain revenue, and
Canada Post Corporation
cross-subsidize some of its less profitable operations. That has been done by the Post Office in Great Britain and the Post Office in Australia very successfully. I suggest that we look at the same kind of thing here in Canada.
Today some 54 per cent of Canadians receive door-to-door service. That percentage will drop dramatically over the next 10 years under Tory cuts in postal service. This is an issue of basic fairness, for those who live in communities across this land are entitled to that door-to-door delivery and should not be treated as second-class citizens because they happen to move into a suburban area which does not have the service.
I received a letter from a constituent, a Mr. Geoffrey Thomas who said:
We are generally very satisfied with the postal service however we just moved into our first home (townhouse) to find that our mail is not delivered to our door. We must walk every day to a commercial post box to pick up our mail. This is unreasonable since homeowners in Burnaby have door-to-door delivery. I would appreciate an explanation for this situation.
This constituent is certainly entitled to that explanation. We know that the failure to provide door-to-door postal service hits particularly hard the disabled and our senior citizens. We know as well that letter carriers play an important role in the course of their daily delivery. They are not just delivering mail but in many cases they perform an important social function, particularly with elderly people. They check on them and make sure they are okay. For some elderly people this is virtually their only contact with the outside community. Now they are being told to walk several hundred yards to pick up their mail at some sort of a big supermailbox. That is unfair.
What is the rationale for this cut in service? It is set out in a letter to me as follows:
Due to the rapid rise in housing starts, Canada Post has been faced with the fact that the cost of providing door-to-door delivery to all new homes is prohibitive, without massive increases in postal rates or greater dependency on taxpayers' dollars.
What absolute nonsense that is. This same Government which refuses to extend door-to-door delivery across this land is prepared to spend in excess of $8 billion on nuclear submarines. What kind of a twisted priority is that? To refuse to provide door-to-door service and to cut back on over 5,000 rural post offices at the same time as it is squandering taxpayers' money on nuclear submarines is absolute madness.
This applies not only to residential communities but also to industrial parks, for example. A Mr. Keith Beedie, one of my constituents, is a business person in Burnaby. He noted that he and a number of his business colleagues have put together an industrial park in Port Coquitlam called the Meridian Industrial Park. They wanted to get postal service at each of those businesses. What were they told by Canada Post? They were told to forget it, that Canada Post was not prepared to give them the service that the businesses across the street have had for decades. We as New Democrats do not accept that kind of abdication of responsibility.

July 21, 1988
Canada Post Corporation
Further, I note that in the lower mainland of British Columbia, a new franchise has been opened in a 7-Eleven store in Lynn Valley, North Vancouver. This has been criticized severely by the postal workers involved because the work that was formerly done by its members will be done by non-union employees at low wages and under conditions that are quite unsatisfactory. This attempt to franchise operations in 7-Eleven stores not only results in far lower wages and poorer working conditions but results in poor postal service, and 1 will come to that in a moment.
I mentioned rural post offices, and I want to take this opportunity to place on the record the concern of Canadians in rural communities across the land about the shutting down of rural post offices. I recently spoke out in Chilliwack, British Columbia, where many residents expressed their concern about the fact that the sub post office at Cultus Lake, British Columbia, which had been there for many years, had burned down recently. Canada Post is saying that it will not replace that sub post office, that it will open up a post office in some 7-Eleven store or another store that is open 24 hours a day. Hundreds and hundreds of the residents of that community have signed a petition asking for the service to which they are entitled.
I would note as well that in the case of rural post offices, it is women who are disproportionately hit because I believe over 80 per cent of rural postmasters are women. This is the only source of income for many of these women, and they are being told that their jobs are gone. They will be replaced by people making the minimum wage at local stores. That is Tory economics, and we reject harsh and unfair Tory economics.
Some time ago, I held a public forum in my constituency on postal service, and I also sent out a questionnaire about postal service to my constituents. I think the results are very interesting and 1 would like to share them with Members of the House. Some 71 per cent of those who responded to my questionnaire were dissatisfied with postal service. They said that the quality of postal service had gone down. In excess of 80 per cent had had mail either lost of damaged. Over 85 per cent strongly believed that there should be universal door-to-door delivery.
The main complaints cited by my constituents of Burnaby would, I am sure, be echoed by constituents across Canada, whether in rural communities or in urban communities. The largest complaint by far was the complaint about delayed mail.
I heard about this issue time and time again. We know that the advent of these private sub post offices will mean even more delays.
Damaged and lost mail was another concern as was the increasing amount of junk mail. People are getting fed up with the amount of junk mail they are receiving. As well, they were concerned about long waits and high postal rates while service is going down. Finally, they are seriously concerned about the so-called supermailboxes. They point out, for example, that among discarded junk mail has been found valuable mail like
personal cheques. They have been interspersed in the junk mail and have been lost. These are the kinds of concerns that have been raised.
We as New Democrats have concrete proposals to improve the quality of postal service. We are opposed to the recent cuts in service. We support universal door-to-door delivery. We oppose the closing of postal services.
I want to pay tribute to my colleague, the Hon. Member for Winnipeg North Centre, who has led the battle for New Democrats on this question and has done an outstanding job in bringing to the attention of Canadians the concerns particularly of rural Canadians but also of urban Canadians about the decline in postal service.
Finally, we believe in the expansion of postal services in Canada. We believe in selling more packaging materials, introducing electronic mail, and allowing banking services in post offices the way they do in other jurisdictions and the way we did in the past. Postal workers themselves have a number of concrete suggestions for improving the quality of service, including the addition of revenue-generating services, consumers' post, financial services, and bill payments. They suggest that Canada Post should get into package distribution and electronic bulk mail services. They note that the British Post Office has expanded its services in this area and has become profitable and even more efficient. The British Post Office has service six days a week, twice a day, yet it makes a profit. Why can we not learn some lessons from that postal system, pioneered by the Labour Government of Britain, 1 might add?
The postal workers also suggest that a major initiative should be taken to reduce workplace injuries and work-related illnesses by improving working conditions. In too many cases, the working conditions of postal workers are primitive. One of the worst safety records in Canada is with Canada Post. Canada Post spends in excess of $20 million annually as a result of workplace injuries. Finally, the workers note that adequate staffing is absolutely essential in order to be able to perform services efficiently.
In drawing to the attention of Hon. Members these concerns with respect to postal service, not just in my own constituency but across Canada, I would like to mention some specific concerns that were raised by the postal workers in a recent submission to the Burnaby Municipal Council, a submission made just last month. The concerns that were raised by postal workers in Burnaby are concerns that have been raised by postal workers across Canada, in Hamilton, in Winnipeg, in Quebec-all over Canada.
The postal workers noted that the new plan involving sub post offices and franchises involves a carded parcel system which will mean delays in picking up registered mail at post offices. Before May of 1987, if a person was not at home when a registered letter or parcel was delivered, he or she would get a card telling him or her to go to the nearest post office to pick
July 21, 1988

up the mail or the parcel. Now people get cards telling them to go to the nearest pharmacy, drugstore, or retail postal outlet. For the residents of Burnaby and other places, that means a delay in mail service. It means at least two days' further delay because that registered mail or parcel has to be taken back to the post office, then to the franchise operation. That means delay, and Canadians are fed up with delays in the postal system. This means even further delay in receiving important registered mail.
As well, in too many cases the cards that are left in the mailboxes do not even have telephone numbers on them that would allow people to contact the sub post offices in question to find out if the parcels are big or small. That makes a difference for senior citizens. They have to know if they will be able to carry the parcels, and they cannot find out if there is no telephone number on the card.
As well, the operators of these little sub post offices which are not run by Canada Post, sub post offices in drugstores, grocery stores and so on, are offering postal services as a sideline. They are more concerned with selling groceries, diapers, and the like than they are with first-class postal services.
There are concerns about the security of mail in these places. Other concerns deal with the lack of training and lack of familiarity with postal products and regulations. There is a high staff turnover because in many cases these are minimum wage jobs, language difficulties, and real problems with difficulties in handling the volume of parcels and mail at Christmas. Sometimes staff are simply spread too thin to give decent service.
The bottom line is that staff in these little grocery stores and so on are not trained to handle postal services. They are trained, if at all, to do the kind of routine work involved in a grocery store, not the important work of postal workers. I would note that the permanent and relief clerks at the South Burnaby postal station have a total of something like 17 years and 4 months of experience in serving Burnaby residents. The same is true of the clerks in the North Burnaby postal station.
Instead of opening up even more of these sub post offices, we should be expanding postal service by, for example, opening a New Directions outlet under the operation of Canada Post in the Brentwood Mall in Burnaby. This would be an important and viable expansion of service. If we continue the way we are going, both the South Burnaby and the North Burnaby postal stations will be shut down in the future, and that is something that the residents of Burnaby are not prepared to accept.
There are other dangers as well. 1 mentioned already the question of supermailboxes and the importance of providing revenue-generating services within the system. We believe that Canada Post should be putting service before profit, but we
Canada Post Corporation
also believe that it can achieve both those goals by expanding the range of services it offers.
In short, we say no to the closure of rural post offices. We say no to cut-backs in the quality of service. We say yes to universal, door-to-door service across this land. We say yes to a quality post office in Canada. We reject the attack by the Conservative Government on postal service in Canada.


Arnold John Malone: Mr. Speaker, the Hon. Member for Burnaby (Mr. Robinson) not only protests too much, he protests far too inconsistently. Therefore, it is my pleasure to talk about one of the great consistencies of the NDP, for in this they are absolutely consistent, and that is their inconsistencies.
The Hon. Member spoke about the reduction in post office outlets. I could see from here, and I suspect it was noticeable to other Hon. Members and those watching on television, that his tongue was in his cheek when he said that.


Svend Johannes Robinson: Oh, no.


Arnold John Malone: The Hon. Member knows the new postal plan allows for thousands more postal outlets.
From there he went on to talk about rural Canada where he said they were closing down even more post offices. He knows the Canada Post corporate plan allows for some 5,000 new postal outlets.


Svend Johannes Robinson: Outlets? Oh.


Arnold John Malone: The NDP does not believe in more service as the Hon. Member claimed it does in his speech. It specifically believes in the most expensive service. Yes, I know it would be nice to have door-to-door delivery in every community of Canada. It is a fact, of course, that that is impossible for rural Canada, but it is also impossible for the rest of the country if we are talking about affordability. For Members to pretend that somehow we can have service and close our eyes to cost-


Svend Johannes Robinson: What about nuclear submarines?


Arnold John Malone: Let us come to the nuclear submarines because that demonstrates something about the NDP as well. They talked about the $8 billion cost of nuclear submarines. They conveniently forgot to say that it was spread over 20 years. That is a very small price to pay to be a partner in NATO, a group of countries that have come together to ensure the freedom of Canadians, among others. We have bound ourselves to that organization in our policy, because we recognize that as members of the free world we have a joint responsibility for the preservation of freedom. Given that, we will play our part to ensure that this group of nations will always remain free. I just wanted to set aside categorically the nonsense that we can leave off part of the facts, make a comparison, and presume that somehow we can have door-to-door delivery in every community irrespective of where it may spring up.

July 21, 1988
Canada Post Corporation
The Hon. Member talked about cuts in postal services. He then went on to refer to "the Tory cuts in postal services". He calls it government cuts. We on this side cut the postal service. Yet the NDP, along with the Liberals and ourselves, supported the idea that Canada Post be set up as a crown corporation.
What does that inconsistent political Party really believe? They voted for the Crown corporation. Are they really saying now that they want a Crown corporation but they want the Government to manage it? Surely, members of the NDP have to sit at one end of the teeter-totter or the other. They cannot scream that the teeter-totter is too high when it is up, or complain they are having no fun when it is down. The fact is they voted for the Crown corporation, they got the Crown corporation, and they cannot stand in this House and tell the Government to run it.
The Hon. Member then talked about the elderly. He had them jogging halfway across Burnaby to get their mail. He said that they had to walk several hundred yards. If he looks at the postal plan, he will note that in hospitals, senior citizens' residences, and other places the plan is to attach mail boxes to those facilities.


Svend Johannes Robinson: Seniors live on their own, too.


Arnold John Malone: That is a good point. That is why his point of a walk of several hundred yards is wildly wrong. That is not what the plan says. It is to be within walking distance for seniors, yet he misses the point.
The Hon. Member opposes 24-hour post offices. He does not want Mac's Milk, 7-Eleven, and all the rest of these outlets running extended hours post offices, yet he turns around and champions women. He says that the NDP love the women out there and that the majority of workers at the post office are women. If there are less people working in the post office, he says that somehow puts women down. That is an interesting and strange piece of logic, but let me give him some bits of information that he might find useful. Whether we like it or not, only one woman out of six is like the traditional family where the man works and the female is at home with the children.


Marion Dewar: Working.


Arnold John Malone: I shouldn't say working. I apologize for that instantly. I do not mean to imply that. I mean "employed". Anyone who has ever been in the home or ever been a mother knows what absolute full-time work is. I meant to use the word "employed".
The fact of the matter is that today most families have both partners working out in the community. Under the system advocated by the Hon. Member for Burnaby, by the time they come home the post office has been closed for an hour. Under the old system of the old dinosaur Party the post office is usually located downtown in the big building with the tower and the clock, with no parking for blocks around. It is never
open except when you are at your employment, and often it is closed over the noon hour.
That is what the Hon. Member for Burnaby proposes for the modern society rather than the shopping centres with parking areas and extended hours, that is, the kind of situation which is appropriate today.
The Hon. Member for Burnaby talked about junk mail. I have only received one piece of junk mail in my life. It was a request for money from the New Democratic Party. I took one look at it and said that I was going to write to someone because they were sending me junk mail. If there were in fact a category of mail called "junk mail", no one would send it. I agree that there are receivers of mail who sometimes do not like what they are getting, who wish they did not get this flyer or that brochure. When I return from my home in western Canada I am always amazed at how many new pizza companies have opened up in my area. Their flyers are always under my door, and I already eat too much pizza as it is.
However, the people who send the mail and the flyers do not think they are junk. If it were truly junk to the senders they would soon quit sending it. They do not send this mail only to watch their bank account go down. It is only junk to some of the recipients. People send that mail with a purpose in mind. For the Hon. Member to make that submission is, in fact, to deny the entrepreneurship of many people in the business community.
This inconsistent Member, who is only consistent in his inconsistencies, then said that the 7-Eleven and Mac's Milk stores are awful places, that they are terrible places to work and are insecure, et cetera. Later on he said that Canada Post has one of the worst safety records in the Canadian enterprise. This fellow would have everyone walk to the sender to pick up their mail. He cannot have it all these different ways. The argument must be better developed than that.
In all fairness to the Hon. Member, post office concerns have always touched the hearts of everyone in urban and rural Canada. It is important for him to remember that the Canada Post Corporation will show a profit next year. It has already been demonstrated that there is a speed up in the turnaround of mail. The operation of the Post Office is becoming more efficient. There will be more and more postal outlets as a result of the new Canada Post Corporation plan. I thank the Hon. Member for bringing this issue to the floor of the House of Commons, because I think people will now recognize that we are in fact on the right track.


Mr. Deputy Speaker:: I would like to advise the House at this time that the time provided for Private Member's Hour will end at 6.05. The time taken by the Private Member's Bill of the Hon. Member for Gatineau is not taken away from the time of the Hon. Member for Burnaby, but unfortunately the time taken for Royal Assent is. Therefore, Private Member's Hour will end at 6.05.
July 21, 1988

[ Translation]


Mr. Edouard Desrosiers (Hochelaga-Maisonneuve):: Mr. Speaker, I represent a riding in the heart of Montreal, the beautiful riding of Hochelaga-Maisonneuve. For the benefit of those who aren't familiar with the neighbourhood, this is next door to the Olympic Stadium. A few years ago, a decision was made to build housing units on what used to be the Angus yards. So far, there are about 5,000 new residents. There are six or seven units for the elderly, and this week, I met one of the directors of the well-known Lucie-Bruneau Institute which is involved in integrating the disabled in housing co-ops, in housing units.
Today, I think we have to give some serious thought to the fact that beyond political Parties and ideologies, there are certain situations that must be dealt with. The director of the institute told me that in my riding, on the Angus property alone, there are 300 disabled persons in wheel chairs. How can you expect these people to pick up their mail, even if they have the best possible superboxes in the world? It was decided the boxes would be located on the street corner, but we are talking about disabled persons who cannot deal with this. We have elderly individuals who are 82, 87 and 89 years old. They have trouble walking. They are ill, they are tired, they are exhausted. They couldn't pick up their mail even if those boxes were made out of solid gold!
I wrote to the President of the Canada Post Corporation. I received an acknowledgement, informing me that he would look at the situation, but he never sent a reply. The injustice of the situation is appalling. These are Canadian taxpayers just like everybody else. They have the same rights and privileges and are entitled to the same services as the guy on the other side of the street who is in perfect health and gets his mail delivered. That is the honest truth.
I understand the Hon. Member for Burnaby (Mr. Robinson). He has problems in his riding, and in our Party, we have people who have problems with those damned boxes. They are no good. I am against the whole principle, and I want to ask my Government and my Minister and to the President of the Canada Post Corporation as well, a corporation that is a Crown corporation, and I know it means we can't always get these people to do what we want them to do, but I ask him to give this his special attention. In the heart of Montreal, right in downtown Montreal, the mail is being delivered on one side of the street and not on the other. It doesn't make sense. This is unacceptable, and 1 think the Hon. Member for Burnaby is to be commended for presenting this motion, and I support it one-hundred per cent.


Mr. Deputy Speaker:: Is the House ready for the question?


Some Hon. Members:: Question.
Income Tax Act and Related Acts


Mr. Deputy Speaker:: Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: On division.
Motion (Mr. Robinson) agreed to.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson (Etobicoke Centre) that Bill C-139, an Act to amend the Income Tax Act, the Canada Pension Plan, the Unemployment Insurance Act, 1971, the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act, 1977 and certain related Acts, be read the second time and referred to the Standing Committee on Finance and Economic Affairs; and the amendment of Mr. Garneau (p. 17724); and the subamendment of Mr. Boudria (p. 17770).
Mr. Deputy Speaker:: Is the House ready for the question?


Some Hon. Members:: Question.


Mr. Deputy Speaker:: The question is on the amendment of Mr. Boudria. Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: No.


Some Hon. Members:: On division.
Amendment (Mr. Boudria) negatived.


Mr. Deputy Speaker:: Resuming debate.


Sheila Maureen Copps: Mr. Speaker, when I was speaking on the main motion before we proceeded to Private Members' hour, I was making a point about the hypocrisy of the members of the New Democratic Party who express their opposition toward tax breaks except when it deals with an issue like flow-through shares. We all recall the flip-flop of the finance critic and House Leader for the NDP. One minute his Party was against flow-through shares and the next minute, when they realized that the Liberal Government's introduction of flow-through shares had resulted in the creation of thousands of jobs, they changed their mind.
Canada has the most competitive steel industry in the world. The heart and soul of that industry happens to be in my riding, where I represent Local 1005 of the United Steelworkers of America, as well as Dofasco which recently was involved in a bid to acquire Algoma, which would make it potentially the No. 1 steel producer in Canada.

July 21, 1988
Income Tax Act and Related Acts
Stelco, Dofasco and Algoma are very competitive because Liberal governments, through tax policies that allowed accelerated write-offs, encouraged companies to upgrade their steel-making capacity so that they could compete on a worldwide scale. While we may hear the NDP say that this type of tax incentive is a corporate rip-off, and would deny such a tax incentive, when it comes to actually eliminating an accelerated write-off to a company like Stelco or Dofasco, or eliminating the flow-through shares, reality hits the NDP hard. Reality dictates that there are certain tax incentives that can be introduced by governments to help business, particularly small business in this country, remain competitive with other countries.
Unfortunately, the NDP would like to play both ends through the middle. They criticized our past record for tax incentives. They also criticized the Liberal Party for believing that when there is an opportunity to assist Canadians, one should try to assist those at the lower end of the income scale.
I am not sure what the NDP would do, but there is a distinct difference in the approach taken by the Liberal Party and the Conservative Party in relation to tax policy.
One example is the area of child care, which has had much discussion in the last number of months. The Government's position with respect to child care is that there is only a certain amount of money that can be allotted to assist families facing this desperate need. If one follows the Conservative philosophy, why would the Government introduce a policy on child care strictly from the taxation point of view, which permits child deductions as opposed to child credits? The Government has potentially doubled the tax deduction available for parents. For a high income earning Canadian like myself, with the salary I receive as a Member of Parliament, the tax deduction will mean two or three times more money in my pocket than that for a steelworker or cleaning lady claiming the same deduction.
A cleaning lady in my riding works for a minimum wage of $4.50 an hour. She will not benefit from the child deduction in the same way as I will benefit.
If the Liberal Party had been in power for the introduction of a child care package, we would have told Canadians that we recognize that each family has a responsibility to be involved in the raising of their children, including financial involvement when it comes to child rearing and organizing for child care. At the same time, there are many Canadians in the middle class, particularly in the $25,000 to $30,000 a year range, who are being attacked from all sides. According to the Government's policy, rather than introducing a credit that will give the cleaning lady a better financial return than a Member of Parliament, it is giving more tax deductions to assist the higher-income individual to a much greater degree than a lower-income individual.
Even if we accept the amount of money that the Government is considering, we believe that the portion being set aside for family deductions should have been directed toward tax credits so that a mother working outside the home and earning perhaps $15,000 to $20,000 a year will be able to get a larger
return on her income tax than the mother who was earning $50,000 or $60,000 a year.
That would be sane tax policy. It is a fair tax policy which recognizes that the role of Government is to redistribute from those who have to those who have not. It would give those women in the middle class the opportunity to go out and participate in the paid workforce if they so choose. We should have the opportunity to be able to remain at home and look after our children if we have the tax base that gives us that support. Unfortunately, the Government's policy has resulted in an erosion of support for the family. The family allowance was deindexed. This suggests to me that the Government is not prepared to give the same kind of support to people with children.
The principle is simple. Someone who earns $40,000 a year and supports a spouse and children should be able to pay less tax than a single person earning $40,000 a year who can spend their disposable income on one person. Such a policy indicates support for families, rather than cutting back on family allowances. This so-called tax reform has the largest tax increases in the history of this country. According to the Government's own figures, the only people who will be able to take advantage of tax reform are those earning over $117,000 a year. That is not tax reform, that is tax robbery. It is tax robbery of the middle class in particular by a Government that realizes its mandate was not to serve the ordinary man and woman.
This mandate was to serve the big moneyed operators who are able to take advantage of the half million dollar capital gains write-off. That was one of the first actions of this Government. Ordinary Canadian men and women are taking it at the gas pumps. There has been a total increase of 27 cents a gallon since this Government came into power. They are taking it in indirect taxes. The average family is now paying over $1,000 extra in taxes. The people who are being helped out are the high-income earners like the person who can take advantage of the capital gains exemption and the person who is earning over $117,000 a year.
We do not believe that is tax reform. We think this document is a fraud. We think the Prime Minister (Mr. Mulroney) and the Government are about as honest in this particular venture as they were when they told senior citizens that their pensions would never be touched. We hope the Prime Minister and the Government will have the courage to call an election so that the people can decide for themselves whether or not they want to face these exorbitant tax increases.
[ Translation]


Mr. Deputy Speaker:: I have received written notice from the Hon. Member for Nickel Belt (Mr. Rodriguez), informing me that he is unable to be present to move his motion during Private Members' Hour on Monday July 25, 1988. Since it was not possible, in accordance with Standing Order 39, to arrange an exchange of positions in the order of precedence, I instruct the Table to put this item at the bottom of the order of precedence.
July 21, 1988

Since the notice will be withdrawn, Private Members' Hour will be cancelled, and pursuant to Standing Order 39, the House shall continue with the business before it prior to Private Member's hour.

There are no questions since we are into 10 minute speeches. On debate, the Elon. Member for Churchill (Mr. Murphy)


Rodney Edward Murphy: Mr. Speaker, I would like to support the amendment moved by the Liberals on the tax legislation, but I think you realize, Mr. Speaker, that I probably would not accept all the words of the previous speaker from the Liberal Party, especially those words which were critical of the New Democratic Party.
It is obvious to many in this House and across this land that there is a need for real tax reform. The sense of unfairness Canadians have with respect to our tax system is not just a feeling held by a small group of Canadians, it is a feeling held by many, many Canadians. During the last federal election campaign, there was a debate on a minimum personal tax. It was our Leader, the Hon. Member for Oshawa (Mr. Broad-bent), who raised that during the Leaders' debate. He pointed out that many of the richest Canadians were not paying one cent of income tax because we had created so many categories they could use for exemptions and so many investment loopholes they could use. They were not paying one cent in taxes. As a result of the debate that took place during the last election campaign, we finally had a minimum tax put in place for individuals. We have some problem with the tax that was put in place because we believe there are still some loopholes and ways that some Canadians can avoid paying their fair share of taxes.
One of the things that did not happen is we did not make the same provision for corporations. So we are now in a situation where corporations in this country which are making money- and we are talking about a significant amount of money-are not paying any taxes whatsoever. We do not believe that is fair. We know that other nations have looked at that situation and have said it is not fair. If we believe that individuals should pay their fair share, that those in the higher income brackets should pay their fair share, that there should be a minimum tax to guarantee they pay at least something, then the same thing should apply to corporations. That is something that many European countries and others have accepted as only natural. We believe that that is something with which this tax reform legislation should be dealing. The subamendment I will be putting forward in a few moments will deal with that aspect.
We believe that it is important that people pay their fair share. We also believe that corporations should pay their fair share. There are a number of problems with our tax system. One of the problems pointed out in my riding is the whole northern tax benefit. You are aware, Mr. Speaker, that until the end of April 1988 some communities in the North were
Income Tax Act and Related Acts
allowed to deduct a northern tax benefit which saved many families about $2,000 to $3,000 a year in taxes. However, other communities, such as the community of Thompson and Wabowden in my riding, communities in northern Ontario and communities right across this land, north of the 56th parallel, were not deemed to be northern communities. Because of an outburst of protest from these people that they are indeed northerners, the Government acted on an interim basis and the people of Thompson, which is a community of 15,000, and the community of Wabowden in my riding, which is a community of 1,000 people, are to be temporary northerners. For the next two years they will be treated as northerners in the tax system until the Government straightens out its act. There was a study of costs in northern communities, and there might be some new legislation brought forward at that time.
I bring this to your attention, Mr. Speaker, as an example because I think it points out the problems we have with our tax system. Over a period of time the Government has made decisions but has had to back down. It has ordered studies and has changed its tax system rather than come to grips with all the problems we have with our tax system.
In many ways, I think people who are filling in their tax forms every February, March or April must feel they are playing a shell game. They do not know what the rules are, what they should have done a year before when they received their pay cheques. They really do not know what they should do to look after themselves and their families in terms of paying their fair share of taxes, but not paying more taxes than their neighbours. In an ironic situation, a bank teller earning a very small salary finds out he is paying more in taxes as a bank teller than the bank itself is paying. How does he feel? He cannot belong to a union because every time a teller or someone else tries to form a union, the Canadian Imperial Bank of Commerce breaks that union by transferring people out. These people receive low salaries and then the tax system makes them pay a certain amount of taxes, but their employer has not paid a cent in income taxes for the last number of years. How do they feel about the fairness of the situation then?
In some ways the system the Government has presented is a step in the right direction. We are calling for a much fairer program. I know our finance critic, the Hon. Member for Ottawa Centre (Mr. Cassidy) has spoken before, and I am sure he will speak again this evening, to explain why the system is not fair and what we could be doing to improve the tax system to ensure fairness for the average Canadian family. Wealthy families will receive an average of $4,365 a year in tax cuts, 60,000 profitable corporations will continue to get away without paying any tax at all and the average Canadian family is left paying $1,000 a year more in income and other taxes than they did in 1984.

July 21, 1988
Income Tax Act and Related Acts
What has happened? We have tax reform. Many of the corporations, not all of them, are not paying any tax. Wealthy families are going to receive a very substantial tax cut. Elowever, when we take a look at the entire situation, we find that most Canadians will be paying more in taxes after this tax reform measure than they did in 1984 when the Conservative Government was elected.
I only have 10 minutes to try to cover the whole taxation field, and that certainly is impossible. However, in the few minutes I have left there are two things I want to point out. First, I want to put forward an amendment, as I indicated earlier, and second, I want to say that we have not dealt with the whole question of what the federal Government is going to do with the federal sales tax.
We know that a federal sales tax can be fair or completely unfair. We also know one additional thing, that is, that people with lower and average incomes will have to spend a larger percentage of their take-home pay on basic goods and commodities. If they are taxed on each and every good which they purchase and each and every service that they use, they will be paying higher taxes to the federal Government than they are at the present time. It will not do them very much good to have a low income tax if, when the second shoe falls, as the expression goes, they end up paying more when the new sales tax measures are introduced. I find it meaningful and scary that we will not know what the Government's plans are with regard to a federal sales tax until after the next election. Here we are on July 21 and the Government is moving quickly with what it calls tax reform because it knows that it is good news for it for the next election. But it will not tell the Canadian people what the total tax bill will be until after that election is finished. I find that basically dishonest. It is certainly advantageous to the Government, but it is basically dishonest in terms of what and how it is telling the people of Canada in terms of what it would do as a government.
I realize that my time is up. I would like to move, seconded by the Hon. Member for Ottawa Centre (Mr. Cassidy):
That the amendment be amended by deleting the word "Corporation" at the end thereof and substituting the following therefor:
"Corporations, and because the Bill fails to ensure that corporations make a fair and regular contribution to federal tax revenues by imposing a minimum corporate tax."


Mr. Deputy Speaker:: I will reserve on the admissibility of the amendment for a few moments. On debate, the Hon. Member for Edmonton-Strathcona.


David Kilgour: Mr. Speaker,
I would like to speak against the motion.


Some Hon. Members:: Shame!


David Kilgour: The trouble with my friends opposite is that they are-


Rodney Edward Murphy: Reasonable.


David Kilgour: No. I know them too well. I know what they have done in British Columbia and in Saskatchewan, notwithstanding the Hon. Member for Regina West (Mr. Benjamin), and what they have done in Manitoba. They have managed in their periods in office in those three provinces to-and part of it had to do with the question of raising taxes on average-income individuals, low-income individuals and against the business sector-to drive thousands and thousands of jobs out of those three provinces while they were in office.


Mr. Benjamin:: Get off it!


David Kilgour: I remind the Hon. Member for Regina West that when Mr. Douglas was the Premier of Saskatchewan for many years from 1944-


Michael Morris Cassidy: We balanced the budget.


David Kilgour: -until the sixties, Saskatchewan was the only state outside, I think it was, East Germany which had a drop in population. I ask the Hon. Member for Regina West to explain that when he gets up to speak.
The fact of the matter is, as he knows as a Regina Member, many people from Regina, Saskatoon, and young people from the North and vigorous people from the West of the province left to go next door to Alberta where the business climate was open and where taxation was not oppressive-


Leslie Gordon Benjamin: More of them left Alberta.


David Kilgour: Some of them even went to Manitoba. Then we elected the Government of Mr. Schreyer in Manitoba. I know it sounds incredible but I am told that more than $2 billion in assets left the Province of Manitoba because of his taxation policies.


Leslie Gordon Benjamin: Who told you that?


David Kilgour: I think that the Hon. Member can find out quite quickly how that happened. Companies, individuals and families simply moved their liquid assets, their mobile assets, out of the province, again to the advantage of the Province of Alberta.
Then we had Mr. Barrett, who was the Premier of British Columbia for three years, which was too long. At one point there was one mine-and we all know how important mining is to British Columbia-in the entire province that was profitable, I am told in part because of the taxation policies of Mr. Barrett.
What I am saying, of course, is that socialist Governments whether in western Canada, Europe or wherever have managed to remove so many incentives for people that they end up causing umemployment, causing people to leave and generally cause great problems for the economy.
July 21, 1988

Anyone who has a family believes in incentives. I do not know whether Members opposite have families, but I think you know, Mr. Speaker, since you have a family, that one has to have incentives. One has to have fairness. I fully agree with what has been said about the need for fairness in tax reform. I have written about the subject.
One thing is very clear. It is that if the people of Canada ever elect Members opposite to form the Government, the business climate will go straight down. Unemployment would go straight up and the dollar would go down. Taxation would go up for everybody. Very quickly the result would be that the good which the Government has done in the last three and a half years would be undone.
1 know how Members opposite talk before the election. They are all for everything that is good and against everything that is bad. All the people of Canada have to do is elect these people to office, and I am encouraged that that will not happen, and enough will be done to the business climate in Canada that we will all suffer. I refer to the young, the old, as well as to all regions of the country.
Members of the Party say: "We must get the corporations. Strangle them". That is what they did in Manitoba. They say that they should be got rid of.


Michael Morris Cassidy: That is the law in the United States. What is wrong with that?


David Kilgour: The Hon. Member for Ottawa Centre used to be a financial writer. He should know that individuals ultimately pay taxes. Corporations, as he knows, just pass them on in increased prices.


Michael Morris Cassidy: The Hon. Member for Edmonton-Strathcona wants no corporate taxes. That is what he is saying.


David Kilgour: I have never said that at all. In fact many companies should pay higher taxes. But if the Hon. Member thinks that the answer is to strangle the golden goose, whatever company it is, to the point that the goose expires on the floor and with it its jobs-


Michael Morris Cassidy: The Hon. Member is speaking out of both sides of his mouth. He is for higher corporate taxes and lower corporate taxes.


David Kilgour: His training at the London School of Economics was grossly deficient. Even perestroika, glasnost and the East Bloc recognize that incentives are needed. If cement is poured on an economy, which can be done with higher taxes, then nothing is created but fewer jobs, less productive employment and less of a future for everybody in society.


Michael Morris Cassidy: So 60,000 profitable companies should go tax-free?


David Kilgour: I have written against that. Those companies should pay taxes. I am in favour of corporations paying taxes.
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Michael Morris Cassidy: So you are in favour of a minimum tax? Are you with us or against us?


David Kilgour: I am against what the Party of the Hon. Member will do to the business climate of the country. I am saying that they will do exactly to the business climate of Canada what was done to the business climate in British Columbia, Manitoba, Saskatchewan. Thank goodness there is no electorate in Canada today which wants to put up with the type of things that the Party will do to the business climate in Canada.


Michael Morris Cassidy: The Yukon has an NDP Government, and it is doing a damn fine job.


David Kilgour: The only point my hon. friend forgets is that right now in the Yukon there are 23,000 people, men, women and children and they have all kinds of special problems. I accept that and agree with them fully. What works in the Yukon will not work in Ontario. I can think of nothing that would create unemployment faster, especially for the riding of the Hon. Member, than the tax policies that some of his more radical colleagues-and I will not name them for him-would impose. I can think of nothing that would do it faster. I can think of nothing that would create more havoc in this country.


Cyril Keeper: Why is unemployment so low in Manitoba with an NDP Government?


David Kilgour: The Member asks why unemployment is lower in Manitoba. I am sure he is perfectly aware that it is because it has a more diversified economy than any other province in western Canada.


Michael Morris Cassidy: Who created that diversified economy? It was the good management of the NDP Government.


David Kilgour: The Member is arguing that the New Democratic Party Government has created a diversified economy in Manitoba. He knows that is totally false. There are many factors involved going back to the turn of the century and the entrepreneurial spirit of Manitobans, the multicultural nature of the population, and many other things. Surely the Member would not be so foolish as to tell the House that it has anything to do with the past NDP Governments of that province. The economy of that province did well in spite of the governments in office, not because of them. Obviously approximately 80 per cent of Manitobans agreed with that view a fewer months ago.


Cyril Keeper: Do you acknowledge that the unemployment was low in Manitoba, not high, as you predicted?


David Kilgour: Of course it was low. I explained to the Member that it was lower because there were less Manitobans working in the-


Michael Morris Cassidy: That is after 15 or 18 years of NDP government, almost two decades of good government with the NDP.

July 21, 1988
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David Kilgour: I believe I am being heckled, Mr. Speaker.
In Manitoba there were less people working in the resource sector, and more people working in the garment industry, in services, insurance, and all of the other sectors which were more stable during times when resource prices were very bad. Please let us put an end to the canard that the NDP policies in Manitoba had anything to do with the diversity in that province.
Perhaps the Hon. Member for Regina West can explain why, when the Blakeney or Douglas government was in office, a community like Lloydminster, which is on the Saskatchewan side and on the Alberta side, looked like a balloon. As the Member knows, most development was on the Alberta side of Lloydminster. Anyone who could would live on the Alberta side, and anybody who could not do otherwise would have to live on the Saskatchewan side. The Member is smiling, but I hope he will rise and explain why Lloydminster, Alberta, did well, grew, had good infrastructure, and a growing population, and Lloydminster, Saskatchewan, was like a dwarf beside a giant.
Obviously, a great deal had to do with taxation policies and business climate. Since my time is up, I simply wish to make the point that I agree that each and every tech corporation should pay a proper and fair tax based on the ability to pay. But to let this bunch ever get their hands on the levers of the economy of Canada would do to Canada what they have done to the three western provinces.


Mr. Deputy Speaker:: The motion moved by Mr. Murphy and seconded by Mr. Benjamin, the Chair finds to be in order.
On debate the Hon. Member for Windsor West (Mr. Gray).


Herbert Eser (Herb) Gray: Mr. Speaker, the more Canadians understand the tax reform legislation of the Government, the more they will realize they have been the victims of a gigantic Conservative scam. The Conservatives are attempting to convince Canadians that they will benefit from this legislation through lower taxes. The facts are quite to the contrary. Starting July 1 of this year Canadians, on the surface, are having less federal taxes withheld from their paycheques. However, what they are getting by way of tax reductions amounts to a small fraction of the billions of dollars that have been taken from middle and lower-income Canadians since the Conservatives took office in September, 1984.
The Minister of Finance (Mr. Wilson) claims that his tax reform will exempt approximately 850,000 lower income persons from paying tax. The Minister omits the fact that his own measures were responsible for taxing an additional one million Canadians. This situation is mainly the result of the partial deindexation of the tax system, and the elimination of the federal tax reduction. Most people who are exempted under this legislation were put on the tax rolls in the first place by the Conservative Government. If we compare the total amount of tax that will be paid by taxpayers in 1988, after tax reform, with that paid in 1984 when the Conservatives took power, we realize that only families with incomes more than
$117,000 a year will pay less tax in 1988 than in 1984. Those families account for the top 1 per cent of all Canadian families. Some tax reform! The Conservative tax reform is aimed at helping the top 1 per cent of Canadian families, not the millions of middle and lower-income families who were promised relief by the Conservatives but who will get just the opposite.
In The Windsor Star on Monday, June 27, 1988, Brian Bannon, the Star's Business Reporter noted:
Three dollars.
That's what "the most significant tax reform in Canadian history" will add to the average Windsor resident's next paycheque.
After July 1, the long-awaited tax cuts promised by Finance Minister Michael Wilson start showing up on payrolls across Canada. But before you celebrate, check your take-home pay.
If you are married with two children under age 19, earn $35,000 a year in wages and your spouse earns nothing, your weekly paycheque will rise from $512 to about $515.
That's better than nothing-an extra $156 a year-but accountants like Windsor's Christopher Renaud question whether it really lives up to all the rhetoric from Ottawa.
"With all the hoopla", he said, "you would expect more".
Here is the truth about the so-called Tory tax reform for the type of people whom I represent in Windsor, Ontario. One can see why I describe the Tory tax reform legislation we are debating today as nothing more than a gigantic Conservative scam, an attempt to fool millions of middle and lower-income Canadians and to try and convince them that they are actually paying lower taxes because of Conservative initiatives. The facts are quite the opposite.
When one takes into account all the increases in personal income tax, federal sales tax, and excise tax, the reduction of $156 a year, $3 a week, for that family with two children under age 19 earning $35,000, would appear to be wiped out, and that family would still be far behind where it was in 1984 before the Conservatives took office because of all the other increases in taxes.
Let us look at some examples: sales tax was increased from 9 to 10 per cent on October 1, 1984, and another $1 billion was taken out of the pockets of middle and lower-income Canadians by the Conservative Government; there was an increase from 10 to 11 per cent on January 1, 1986, and another $1 billion was ripped from the pockets of middle and lower-income Canadians by the Conservative Government.
There was an increase from 11 to 12 per cent in sales taxes on April 1, 1986, another 1 billion ripped from the pockets of middle and lower-income Canadians by the Conservative Government. On July 1, 1985, and on July 1, 1987, there was an extension of the sales tax to candy, soft drinks, health goods, dental instruments, even snack foods, another $460 million taken from the pockets, not just of middle and lower-income Canadians, but even children who want a little snack on their way home from school.
July 21, 1988

What about the increased excise tax on gasoline, totalling some five cents a litre, between the September 3, 1985, to the April 1, 1988? Elere we have an increase of over $2 billion. In a country like Canada, obviously for most Canadians it is essential to drive a car. They cannot write it off as some kind of business expense, like many of the top 1 per cent, who, the statistics show, will be the only ones really benefiting from this Tory tax reform.
What a contrast the way individual Canadians, middle and lower-income Canadians, are treated by this Conservative Government through this tax reform legislation with the way the larger corporations are going to be treated. Even after tax reform, some 60,000 profitable corporations will still pay no tax. Yes, the number will be reduced from 100,000 to 60,000, but 60,000 will still pay no tax.
Even after the implementation of a minimum tax, 5,220 taxpayers who earned over $50,000 did not pay one cent of tax in 1986. There is nothing in this Conservative tax reform legislation that cures that serious defect in the Conservative approach to so-called fairer taxation in this country. There is no doubt about the Conservative approach to tax reform. What a contradiction in terms to call this legislation tax reform. There is no doubt that it is to the detriment of middle-income taxpayers and small businesses.
I think it is clear from what I have just said and from the facts that 1 have put on the record why, when the next election comes-and I believe it should be very soon-the bulk of people in this country, middle and lower-income Canadians, will say no when asked whether they approve of the Conservative Government, especially in its approach to fair taxation. What the Conservative Government is trying to do through this legislation for middle and lower-income Canadians is definitely not fair for them.
Look at what the Institute for Research on Public Policy said in a recent study, as reported by Brian Bannon in The Windsor Star for Monday, June 27:
In fact, middle-income individuals who see their take-home pay increase
after July 1 are really no better off when compared with 1984.
The Institute for Research on Public Policy, an Ottawa-based think tank,
says that tax increases imposed since the Conservative federal government
took over in 1984, took away more than tax reform gives back.
This is a confirmation of the point I made at the beginning of my remarks. On behalf of middle and lower-income Canadians, I say that this is not tax reform. This legislation is a gigantic tax scam at the expense of millions of middle and lower-income Canadians who deserve better from this Government, and they are not getting it.


Leslie Gordon Benjamin: Mr. Speaker, I hope I get a chance to speak on this Bill three or four times. I have a couple of hours' worth of material which will have to be put into 10-minute speeches, which will not be easy.
I want to say that all this Parliament has to do-starting tonight-is blow the dust off the Carter Royal Commission on taxation of 1966. For the ensuing two or three years, when the
Income Tax Act and Related Acts
Government of that day refused to act, Mr. Carter, like Mr. Justice Emmett Hall, finally got angry and went public. The tragedy is that he died of cancer before his intervention in the public domain. He was unable to have the time to force the Government of that day to implement real tax reform, that a buck is a buck and no matter how you earn it, it is taxable.
He called for-and many others have called for, including members in all the political Parties-some fundamental changes to the tax system in this country.
I listened to the Hon. Member from Edmonton a few minutes ago who dredged up mythology, falsehoods and inaccuracies from 30, 40 and 50 years ago which I thought had been so thoroughly discredited that nobody, not even a Conservative, would have the gall to even raise them again. He talked about depopulation in Saskatchewan, under the CCF. Under Conservative and Liberal Governments in that province from 1923 to 1944, we lost 400,000 people. In the equivalent period, under Tommy Douglas and the CCF, we regained more than half of that number. Then, under 11 years of A1 Blakeney, our population got back up to the million mark.
No matter what the numbers are, the point is that we have always had a different social regime in our province. Even Liberals and Tories did not dare abolish programs that we have started. They have nickelled away at them, they have undermined them, they have reduced their effectiveness, they have increased the cost to consumers, but they have not dared to do away with them. It would be political suicide for them to do so, and they know it.
The costs of services that the people of Canada need and want have to be shared equitably by every taxpayer, no matter who they are or what their station in life is. Those below the poverty line must be totally exempt from the tax system. The only way that you get them to the position of paying some of their share of taxation-which they would like to do if you could get them to an income level where they would be willing and able to-is to put them to work and provide them with the services that every Canadian needs, rich or poor.
Every one of those services paid for through our tax system is shared by everyone. It is what we like to call a co-operative commonwealth. Taxes paid for services like drugs and senior citizens, housing and chronic care beds and air ambulances and telephones and power and automobile insurance and a host of other things, are essential public services. They are not businesses; they are services. I include the Post Office in that. It is not a business; it is a public service.
There are no taxpayers in this country, no citizens that I have ever heard of other than someone from the Chamber of Commerce, or from the Tories, who complain about the deficit in the Post Office. The deficit is shared by all taxpayers in the country. Their first priority is service. It should not only be priority post, it should be priority service.

July 21, 1988
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I want to mention something since the Hon. Member for Hamilton East (Ms. Copps) was being so vitriolic about us. Under a Liberal regime toward the middle or the end of the Korean War, we had something called corporate tax deferrals. As of this day there are between S35 billion and $40 billion of unpaid corporation taxes on the books of this country. That is a debt. If you look at the annual reports of corporations whether Canadian Pacific Investments, Canadian Pacific Limited, Inco, Bell Telephone, Air Canada, CNR, you name it, it does not matter whether it is a private or a public corporation, they have hundreds of millions of dollars of deferred corporate taxes on their books carried as liabilities. But the little corner grocery store owner, the farmer and the fisherman cannot defer their taxes. Neither can we. We have to pay them. If we are late, we are charged interest.
Canadian Pacific Limited, one of my favourite friends, owes something in the order of between $1.5 billion and $2 billion in deferred corporation taxes which will never be paid. International Nickel and Bell Telephone owe that much or more. The Government of Canada has something near $40 billion in taxes receivable which will never be paid.
If the Government were to charge those corporations just the straight bank rate of interest, the Government would pick up between $3 billion and $4 billion in extra tax revenues. That is a cheap loan, at the moment it is is an interest free loan. The theory was if you let corporations defer their taxes they would invest the money in new equipment, new plants and would create more jobs. That was the theory. They did. International Nickel, Canadian Pacific and Bell got investments like you would not believe in Mexico, Chile, Indonesia and anywhere else in the world you want to go. When 3,000 men were laid off in the Sudbury area, International Nickel opened a new mine in Chile. That is where deferred taxes went. Nobody should be allowed to defer tax until they can prove that the money was invested in this country and nowhere else.


Mr. Forrestall:: I agree.


Leslie Gordon Benjamin: I could not get a single Tory or a Liberal Government in the 20 years I have been here-and it is my anniversary in a couple of days. They all agree as my hon. friend from Dartmouth-Halifax East (Mr. Forrestall) agrees-to do it. We have tens of thousands of Canadians on high incomes. We have thousands of Canadian corporate leaders, making $2,000, $3,000 and $4,000 a day.


J. Michael Forrestall: That is not true.


Leslie Gordon Benjamin: And we have farmers losing farms and fishermen losing their boats and little storekeepers going broke. These high earning guys have tax benefits, preferred stock options that are non-taxable. They have tax dividend credits. The president of the one corporation I know makes
$4,000 a day. That is more money than 90 per cent of Canadians make in one, two or three months. Do not talk to me about private enterprise, free enterprise and market forces when you allow that kind of an unfair system to prevail. It is so patently unfair.
This Government said it would do something. The Prime Minister (Mr. Mulroney) in the television debate, after the Hon. Member for Oshawa (Mr. Broadbent), our Leader, raised the subject about tax fairness and tax reform, said: "You are right, Ed". That was four years ago. The Hon. Member for Oshawa is still right and the Prime Minister is still wrong. We still do not have tax reform. We have nothing but the juggling of the books. I will keep talking until you cut me off, Mr. Speaker. Do you want to do it now?


Mr. Deputy Speaker:: Yes.


Leslie Gordon Benjamin: Go ahead.


Mr. Deputy Speaker:: I thank the Hon. Member. Debate. The Hon. Member for Ottawa Centre.


Michael Morris Cassidy: Mr. Speaker, the amendment put forward by the Hon. Member for Churchill (Mr. Murphy) calls for the inclusion in the total amendment on this particular Bill the requirement that there be a corporate minimum tax. I will read it. We are saying that Bill C-139 as it stands right now should not be brought forward at this time among other reasons because the Bill fails to ensure that corporations make a fair and regular contribution to federal tax revenues by imposing a minimum corporate tax.


J. Michael Forrestall: Who is the author of that?


Michael Morris Cassidy: I am the author of that, Mr. Speaker. As the spokesperson on taxation and finance for the New Democratic Party, I am proud of the last two and a half years in a very responsible way to put forward policies which will be fair to average Canadians, not the kind of Tory tax reform we have been having which seems to be much fairer to people who are rich and to corporations than it is to the average citizen.
After Conservative tax reform there will still be some 60,000 Canadian corporations which are profitable and which each year will not pay any tax at all. Is that easy to defend? I do not think it is. When we begin to tax families below the poverty line and when we begin to tax individuals far below the poverty line, why is it that we turn around and have this unusual consideration for all these profitable corporations, not loss making, but profitable corporations, leaving them in a position where they do not pay any tax at all?
You may recall that I indicated the concerns of my colleagues in the New Democratic Party over the question of the unfairness of the tax system which in 1983, and I believe in 1984 and 1985 as well, took more in income tax from a teller working for the Royal Bank of Canada than it took from the Royal Bank of Canada in its multibillion dollar entirety. There is something wrong and fundamentally unfair about that.
July 21, 1988

1 heard with interest the comments of the Eton. Member for Edmonton-Strathcona (Mr. Kilgour). I was glad he entered the debate but I was confused by what he had to say. I think perhaps the Conservatives are somewhat confused about this as well. They have tried to wrap themselves in the rhetoric of progressive tax reform, but as in so many other things that is a deception, a snare. It is false and it is wrong. They are legitimizing and perpetuating tax privileges for wealthy Canadians.
Wealthy Canadians get an average tax cut of $4,165 whereas the average Canadian at $25,000 a year, a very modest income, gets a cut of only $140. Average Canadians will pay more tax under the Tories after four years despite tax reform. Wealthy Canadians will pay less tax under the Tories after four years because of tax reform.
I have a couple more things I want to put on the record which I think are extremely significant. I have the summary for taxpayers which was released last December by the Minister of Finance (Mr. Wilson). On the front page it says "Lower rates, fairer system". What is fair about this, Mr. Speaker? Income earners from $20,000 to $25,000 pay a marginal rate of federal and provincial tax at 26 per cent. If their income goes from just over the poverty line of $25,000 to $30,000, their marginal rate rises to 38 per cent. If their income goes from $30,000 to $40,000, just getting into the middle-income range, then they pay a marginal income rate of 46 per cent.
It is interesting that if these couples then go from $40,000 to $50,000, the marginal rate is 40 per cent, actually lower. If they go from $50,000 to $60,000, the Government's own figures indicate that the marginal rate is lower again, 43 per cent. If they go from $60,000 to $75,000, the marginal rate bounces back up to 46 per cent.
Beyond that, if Mr. Jean de Grandpre, the Chairman of Bell Canada Enterprises, gets an increase in his income from $1 million to $1,100,000 per year, he too pays a marginal rate of 46 per cent, give or take 1 per cent. There is something fundamentally wrong with that when a family not far above the poverty line will be paying the same marginal rate of tax as one of the high-priced corporate executives with an income of $500,000 or $1 million a year. In fact, the Conservatives have actually used the language of tax reform but have put in place a flat tax for most Canadians.
It is interesting that while the Conservatives copied that flat tax from the United States, when it came to a progressive measure found in the United States, the minimum tax on corporations which is a part of the package Congress put into force just two years ago, the Conservatives were not prepared to adopt that measure. The Conservatives in Canada are even softer on corporate taxation than the Republicans in Ronald Reagan's America. I find something reprehensible about that.
The Americans are taking increases in corporate taxes at about three or four times the rate of the increase taken here in
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Canada. The average of the contribution to federal tax revenues from corporations after tax reform will be a lower percentage of total tax revenues in Canada than it was in 1984 when the Progressive Conservatives took power.
I know that my time is limited, but I was just looking at some very significant calculations which I would like to note on the record. These are some figures prepared by Trestet Resources, a firm which did an excellent analysis for the Finance Committee, which it submitted to us a few months ago.
Taking the example of one earner with two children earning $30,000 a year, this report indicates that that family was paying $3,300 in income tax in 1984. That figure has gone up to $4,436 in 1988 before reform, it will drop to $4,200 after reform and rise again to about $5,000 in 1991 if we take it all in real dollars. This means, as we have been saying all along, that Tory tax reform is not tax reform at all.
People come to us and say that they are puzzled about their taxation rates, they feel that they are paying more but they cannot put their fingers on it. That is because it is hard to remember what we were paying four or five years ago. However, average Canadians are paying more and more under the Conservatives. They are being soaked one way or the other.
That same family making $30,000 a year paid in consumption taxes $1,575 in 1984, up to $1,800 before tax reform, a bit higher after tax reform and up to $1,925 in 1991, post-tax reform. Over-all, the taxation on that family under the Progressive Conservatives will have risen from about $4,900 in 1984 to about $6,900 in real dollars in 1991. That is a measure of how duplicitous the Conservatives have been with their tax reform.
These figures show as well that the increase in the tax burden over that period of time has been the highest for families earning average incomes. What about wealthy Canadians? They are actually paying less or getting very small increases in their tax burdens.
We will be fighting an election very shortly. I will be talking about how the Progressive Conservatives have ignored my constituents of Ottawa Centre. I know that my colleagues from Hamilton Mountain, Winnipeg North Centre and Regina will be talking about how Tory tax reform has ignored their constituents as well.
My constituents expected fairness when tax reform came down the pipe. They did not expect to see the rich pay less while average Canadians paid more. My constituents expected fairness. They did not expect to see corporations continuing to go tax-free while families living below the poverty line had to pay more. My constituents expected fairness. They did not expect a tax system in which the Conservatives held back the sales tax reforms because they were going to soak average Canadians with increases in sales taxes if they managed to get themselves re-elected.

July 21, 1988
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Mr. Speaker, Canadians are intitled to fiscal fairness. They did not get it from the Progressive Conservative Government. I ask all Members here in the fJouse to support our subamendment which calls for a measure of fairness by imposing a minimum tax on corporations. It exists in the United States, even under President Ronald Reagan. I don't see why it could not exist here, to ensure that we have a fair system and to make sure that all corporations that are making a profit pay taxes every year.
That is our amendment, Mr. Speaker. It is part of our campaign for fiscal fairness and for a government that is honest and fair to its citizens.


Cyril Keeper: Mr. Speaker, I would have liked to have had an opportunity to pose questions, but I understand that that is not possible right now. I want to focus on the NDP amendment, which is an amendment to the Liberals' amendment. Today we have taken some time in the House to point out the inadequacies of the Government's policy on taxation and the unfairness of the Government's approach to taxation. It is not surprising that the Liberals would be able to come up with an amendment that appears to make sense.
The Liberals are basically saying that this House opposes in principle the taxation measures of the Government because the Bill seeks to impose a tax system that first is lacking in progressivity. What is that? Progressivity simply means that those who earn little pay little in taxes and those who earn a lot would be expected to pay a lot in taxes. It means that those who can afford to pay ought to be able to pay. It is a great principle.
Second, the Liberals say that the tax system places unfair burdens on families. That is true and it ought to be stated. Third, the Liberals state that the tax system unjustly taxes middle-income earners. That as well is true, and I spoke earlier today about the very heavy tax burden that has been placed on the middle-income earners of Canada.
Fourth, the Liberals say that the new tax system is more complex than the one presently in place. Anyone who had to fill out a tax form or who had to hire someone to fill out a tax form knows that the taxation system is very complex. There is a need for simplicity as long as that simplicity leads to greater justice in the tax system.
The fifth and sixth points made by the Liberal Party are the ones that I find interesting. The Liberals say that the new tax system discourages capital formation and reduces the competitiveness of Canadian corporations. Obviously we need capital in order to have economic growth, and our firms must be competitive, so those are good points. However, that is where the Liberals stopped. Therefore, we moved an amendment adding that we oppose the Bill because the Bill fails to ensure
that corporations make a fair and regular contribution to federal tax revenues by imposing a minimum corporate tax.
We seek to complete the circle. The Liberals have indicated they are in favour of those things that will help people, such as a progressive tax system, because the burden is unjustly laid upon middle income earners. They make that point but fail to explain how the revenue loss will be made up. When they deal with the corporate side of the ledger, they deal only with the need of corporations to be competitive and a necessity for the tax system to recognize that fact. They fail to deal with the other side of the ledger, which is that if we are to relieve the tax burden on ordinary families, as they suggest in their motion, then we have to find the revenue some place.
We in this Party believe in putting the whole picture before Canadians. The place to find that revenue is from those corporations which are making profits but not now paying taxes. I understand there are some 60,000 of them. Our amendment points out that if we are to have a just tax system, if we are to give some relief to ordinary Canadian families, it will have to come from those who now get away without paying any taxes.
The Liberals fail to recognize the problem and fail to provide the solution. They criticize the Government, which is a necessary part of being in opposition, but if you want to change the situation, you must have a solution to the problems. The Liberal motion does not do that.
That is why, when I spoke earlier today, I indicated that when Canadians look for an alternative to the tax policies they have experienced over the last four years and they look to the Liberal Party, they are looking in the wrong place and they will inevitably be disillusioned.
That is why we moved this motion. The amendment introduced by the Liberal Party was only a half measure. It was like trying to take a step by lifting up your foot and forgetting to put it down again. They have identified the problem but failed to outline the solution.
We think that problems should not only be identified, they should be solved. We think what is needed is not just a change in government but a change in direction. What is needed is not only a capacity to analyse the injustices in society, but a capacity to take the action necessary to solve those injustices and bring about a better community for all Canadians.


Mr. Deputy Speaker:: Is the House ready for the question?


Some Hon. Members:: Question.


Mr. Deputy Speaker:: The question is on the subamendment (Mr. Murphy).
Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: No.
July 21, 1988


Some Hon. Members:: On division.
Motion (Mr. Murphy) negatived.


Mr. Deputy Speaker:: The next question is on the amendment. Debate.


Leslie Gordon Benjamin: Mr. Speaker, I rise to complete the second stage of my debate.


J. Michael Forrestall: Yes, you said you would keep us here until Christmas.


Leslie Gordon Benjamin: I will do the 10 minutes on the amendment if you do not mind.


J. Michael Forrestall: It is becoming boring.


Leslie Gordon Benjamin: I want to raise another matter concerning tax reform and deregulation in the free trade deal which has been festering for months now. Much has been made in the discussions and debate in this House and in the country about privatization, deregulation, free trade, and having a level playing field. It is nice to have a level playing field but what is happening now, before this Bill is passed, before deregulation is fully in place, before the trade deal is in effect, is that we have a level playing field and the other guy has the ball on our 10-yard line. In this case I want to refer to what is happening in transportation, particularly the trucking industry and the railroads.
With the passage of the National Transportation Act, the Motor Vehicle Transportation Act and with the passage of this tax legislation, we will have a situation where Canadian trucking companies will establish profit centres, or whatever they call them in the U.S. This is happening already.
CP Transport has already bought three American companies and closed its biggest Canadian general freight companies. Several Canadian trucking companies are leasing their tractors and trailers in the United States. This is partly because of the Motor Vehicle Transportation Act. We were assured that the purpose of that Act was to get a uniform code of regulations in the 10 provinces and the two Territories at the national level. There is now more chaos than ever before. All you need do is ask the Canadian Trucking Association or any individual trucking company, large or small, anywhere in Canada.
Why is that happening, Mr. Speaker? Let us refer back to the level playing field. Under the so-called tax reform of the Government, a Canadian trucker would be crazy to keep his operation headquartered in Canada. The Conference Board reports that the difference between fuel taxes in the States of New York and Illinois as compared to Ontario, where most of the big trucking operations are located, is the main culprit. The Government proposes to move to a sales tax regime. The Conference Board points out that the difference between the sales taxes and the difference between the corporation taxes means that the Canadian trucking industry is at a severe
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disadvantage under both this tax Bill and the Motor Vehicle Transportation Act-deregulation.
In the United States a trucking company's tractor is considered three-year property and they can write it off in three years. The trailer is five-year property and they write it off in five years. A Canadian trucker, under Canadian tax law and under this tax reform Bill, has to take seven, eight, or 10 years to write off his equipment.
When you add the differences in the fuel taxes to the depreciation provisions of the tax laws, both state and national in the United States and provincial and federal in Canada, you would be crazy to keep your business headquartered in Canada. People in the trucking industry tell me that many of them have already moved, are in the process of moving, or are negotiating to merge with, buy up, or establish what they call a profit centre, and it will be south of the 49th parallel.
Not only is the playing field not level, the ball is on our 10-yard line and the other guy has it. That is not tax reform, that is not fair taxation. Unless the Government is prepared to amend our tax laws-and I don't give a darn how it does that, whether through rebates on fuel taxes for cross-border traffic or provisions for faster depreciation write-offs-the playing field remains unlevel and our smaller truckers go out of business and the bigger ones go across the border.
The case is similar in the railroads. United States railroads have fast tax write-offs on rolling stock. They have lower fuel taxes, as do the trucking companies there, and they do not allow competitive line rates. However, under our deregulation and tax law, that is allowed in Canada. American railroads can come into Canada and even use Canadian railroad tracks on competitive line rates. However, a Canadian railroad cannot go to the United States because neither the national American Government nor any of their 50 states allow competitive line rates. What are the Tories giving us? They are giving us a crock and it's full of you-know-what.
Not only is this totally unfair to major sectors of our transportation industry, it is driving them out of business in Canada or driving them out of Canada. That has to be the height of economic and social stupidity. Only the organizational genius of a Tory Government could arrange to do that. The Government handed $23 million over to the provinces which are still running in 10 different directions. We are nowhere near a uniform code of safety, performance, and maintenance anywhere in Canada. That is what was promised by the Government.
My hon. friend sitting down the way to my right from the mountains of B.C. sat in the committee too and heard that. I invite him to call up the Canadian Truckers Association and ask about that. I dare him to do so.


Mr. Belsher:: I have.

July 21, 1988
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Leslie Gordon Benjamin: Then he got an earful. I expect him to make a speech in support of this amendment and we will all be happier with at least one Tory Member in this place.


Marion Dewar: Mr. Speaker, I am pleased to participate in this debate tonight. It was one year ago yesterday that I was elected to this House. I spent a lot of time before that on the doorsteps of the people in Hamilton Mountain. That was just at the time that the White Paper had come out and people were talking about it. The first day that the White Paper hit the news media and people heard about it they rejoiced because they read all the jingo about the progressive tax system and how good things were going to be. It did not take more than 48 hours before they started to read between the lines and the people of Hamilton Mountain were not very happy with the so-called tax reform.
Hamilton Mountain is not a community with a lot of great riches, although we do not have a lot of deep poverty. We work hard and many people have been able to purchase their homes. The people there are not greedy. If they can live with a decent standard of living after having worked hard, they think that is fair and just.
The people have recognized that tax exemptions are not a progressive approach. They started to examine what was happening with tax exemptions. A tax exemption which is very useful to ordinary working people and to retired working people is the $1,000 interest exemption. That was wiped out. The immediate response to that was that they may have been getting an unfair advantage, so perhaps it is fair.
They began reading between the lines to see that there were huge tax shelters and tax expenditures that would not be phased out until after 1992. People with a lot of disposable income were still able to shelter that income while people in my community cannot do so. It has really hurt them.
When we compare what is happening to people with different levels of income, we see that those earning $15,000 or less will have a savings of $90 in 1988, according to the Government's figures and its White Paper. While that is not a lot, someone earning $15,000 a year would be grateful for it.
However, when they learn that someone earning over $100,000 a year gets a saving of $1,615, families and retired people in Hamilton Mountain say that is unfair. They do not mind giving up the shelter if it helps other people, but not when this so-called tax reform only helps the rich.
In percentage terms, it is .8 per cent of savings for the poor and 1 per cent of savings for people earning over $100,000 a year. That is certainly not fair. Those figures do not take into account the various taxes that are involved, so even those numbers are false as far as the Government's information to the people is concerned. The Government does not have the courage to discuss the real situation.
Canadians have talked about tax reform since 1968. Yet we are digging ourselves deeper into a chaotic and messy tax
system. The way an efficient and accountable government would approach tax reform is to make it a system that people understand. The Government has done the opposite. It has increased taxes consistently since it was elected, only to introduce the rebate this year. It held on to that rebate until July so that it would look larger than it actually is. It is manipulating people who are working hard to make ends meet within their personal budgets.
The Government is not being honest about its own expenditures. It is hiding taxes within the sales tax at the federal level. One cannot see that tax when paying for an item at the cash register. People of Hamilton Mountain are most annoyed that the Government continues to think it can manipulate them. They are insulted and outraged. They resent this so-called tax reform.
My constituents began looking at the implications of this tax reform on their own lives. They are even more insulted by the fact that tax shelters have been extended so that those who can well afford to pay more taxes not only have a reduced tax rate, their tax shelters are allowed to continue. There has been a constant history of lobbies to continue the tax shelters that are extremely beneficial to the rich. They do not do anything for the economy, and studies have shown that tax shelters do not work as a social tool, especially when there is no accountability to the House of Commons.
The Auditor General has been asking for action for years. The Government has refused to take action. The former Government refused to take action. There is no way of measuring the implication of tax shelters.
It is outrageous that the Government even dares to call this tax reform. It is time the Conservative Government told Canadians that it is really trying to skewer the tax system more than ever to make sure the rich get even bigger breaks than they have had while ordinary working Canadian families have to carry the burden for people to buy their nuclear submarines. It is a disgrace. The sooner we get rid of the Conservative Government the better.


Mr. Simon de Jong (Regina East):: Mr. Speaker, the Government's proposal is not tax reform, it is a sham.
This Bill has been dressed up in the rhetoric of genuine reform. When he introduced this package, the Minister of Finance (Mr. Wilson) stated: "We all know the tax system allows many profitable corporations to avoid paying their fair share of tax year after year. We all know that it allows some people with very high incomes to pay less tax than the average Canadian wage earner year after year".
After hearing this rhetoric, one would assume that the Minister would follow through with measures to prevent the wealthy individuals from paying less tax than low income people year after year. One would have thought that he would introduce measures to prevent large and profitable corporations from not paying any tax year after year.
July 21, 1988

When everything is said and done, he has not done that. Right now, an individual will begin paying tax when earning $6,220 a year. Someone living in Ottawa, for example, earning $518 a month will pay at least $250 a month for shelter. That leaves $268 for food, clothing, transportation, telephone and medical bills. The Government is expecting that individual to pay tax as well.
Senior citizens with an income of $6,220 per year are expected to pay tax while there are still many wealthy individuals with incomes well over $75,000 or $100,000 a year who will not pay one cent of tax. There are about 60,000 profitable corporations that do not pay a cent of tax.
In 1986, PWA, with income totalling $39 million, did not pay one cent of tax. In 1986, Union Carbide of Canada with income totalling $28 million did not pay a cent of tax. Somehow those large corporations can make hundreds of millions of dollars and yet pay not one cent of tax while the senior citizen with a bare income of $6,220 per year, $518 per month, is expected to pay tax. Is there no shame? Is there no sense of justice? What we hear is rhetoric from the Minister. We all know that it allows some people with very high incomes to pay less tax than the average Canadian wage-earner year after year. We all know it allows those who are able to use special tax breaks to shift the burden to those less able to carry it.
He is right on. Why in heaven's name did he not introduce a tax package that would correct those inequities, that would ensure that profitable corporations paid their fair share, that would ensure that those who have high incomes, who benefit the most from the wealth of this country, pay their fair share? That would be far better than making those low-income individuals with incomes of some $500 per month carry the burden.
When I see members of the Government standing up in the House trying to perpetuate the myth that this income tax measure is indeed going to reduce the tax burden on the poor and middle-income earners, I am surprised. Speaker after speaker, they stand up in this House and repeat these mis-truths. It is as though we are living in George Orwell's 1984, where the philosophy was if you repeat an untruth often enough, people will begin to believe it.
It is true, as government Members claim, that compared to 1987 there will be a reduction in the income tax that people will have to pay, but compared to 1984, when the Tories were first elected, the vast majority of Canadians will be paying at least $1,000 per year more in taxes, even considering tax reform. The only group which will be paying less taxes are the very rich, those earning $100,000 or more per year. They will pay less taxes in 1988 than they paid in 1984. They are the true winners in the smoke and mirrors that is called tax reform which was introduced by this Government.
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It should not be surprising that this is the type of legislation the Government has introduced. This Government basically believes in the old trickle down theory which is that if the guys at the top are doing all right, eventually the benefits will trickle down. It is something like the notion that if you feed the horse a lot of oats, eventually the sparrow will get some. With this legislation, the horse will get a lot of oats. Some of the very wealthy in this country will see a tax savings of over $4,000 a year. But the benefits will not trickle down. It will not increase employment. It will not ensure that there will be an increase in productivity and that the wealth will be shared.


J. Michael Forrestall: Why not?


Simon Leendert de Jong: If the Hon. Member would care to read even basic text, he would find that a lot of the excess wealth is used for corporate takeovers. With this legislation, companies gobbling up other companies will still be able to deduct those expenses as a business cost, can you imagine, Mr. Speaker. Another reason why the trickle down theory does not work is that the $4,000, or whatever extra dollars these rich individuals save on their income tax, will most probably be spent in Mexico, Italy or Morocco.
The third reason the trickle down theory does not work is that people can only spend so much, and their excess wealth is invested in places outside this country. We have seen this. We have seen the outflow of investment from Canada increase in the years the Tories have been in power, creating no jobs, causing no increase in productivity in Canada.
The theory of Ronald Reagan, Margaret Thatcher and our home grown Tories that assumes that if the guys at the top are doing quite all right eventually the people below will begin to benefit is a theory that has not worked. It is a theory that has resulted in armies of homeless people across the United States and in Great Britain. It has resulted in soup kitchens and food banks in this country. The wealthiest countries in the history of the human race have poverty in every major city. That is the result of these bad economic theories and I am afraid we cannot support the main motion. We will be supporting the amendment.
[ Translation]


Mr. Jacques Guilbault (Saint-Jacques):: Mr. Speaker, as the debate on Bill C-139 is nearing completion I too would like to make my contribution. The amendment we are debating at the present time, moved by my colleague the Member for Laval-des-Rapides (Mr. Garneau) is quite harsh because we on this side of the House feel that tax reform will be extremely harmful to Canadian taxpayers. The amendment moved by my colleague goes straight to the point and enumerates the main flaws of the Income Tax Act reform that was introduced here in Parliament by the Conservative Government. Under this reform, the new tax system will not be sufficiently progressive. After tax reform, once it is passed, there will only be three statutory tax rates.

July 21, 1988
Income Tax Act and Related Acts
What is unfortunate is that the spread between the second and the third bracket is too narrow-there is only a three point spread- while it is too wide between the first and the second brackets, which means that middle-income taxpayers, who make up the majority of those who pay taxes in Canada, will tend to pay more tax and to move closer to the tax rates of high income earners than they should. This unprogressive tax rate scale means that tax reform lays an unfair burden on Canadian families. This so-called reform will mean that we will have to grapple with an income tax system that will be even more complex than what we had before, and that was complex enough.
Certain promises were made by the Minister of Finance, Mr. Speaker, and I would like to remind you of certain things, one of them being that in October 1986 the Minister of Finance stated in his document Guidelines for Tax Reform in Canada that one of the basic principles was the following, and 1 quote:
... making the tax system simpler so that it is more readily understood by
more Canadians.
Well, what has happened is quite the opposite. Canadians who found filling out their tax returns difficult before will now find themselves in an even more complex labyrinth. Let me quote the conclusions of the House Standing Committee on Finance and Economic Affairs, which had this to say on the complexity of the new tax system. And I quote: It is disappointing for the Committee to draw the inevitable conclusion that the proposed tax reform has not successfully adressed the problem of simplifying the tax system. On the contrary, it has become a tax system that only tax specialists and tax lawyers will be able to understand completely. Furthermore, even after the introduction of a minimum tax, some 5,200 taxpayers with income of more than $50,000 did not pay one cent of income tax in 1986, and probably none in 1987 either-those statistics are not available yet-and what is even more unfortunate is that they will probably not pay any in 1988 nor in subsequent years since tax reform does not touch those people; only the minimum tax introduced earlier applies, and it still lets some people slip through the tax collector's net.
The Minister of Finance (Mr. Wilson) claims that his tax reform will strike some 850,000 names from the taxpayers' list;
850.000	people will no longer pay tax. That is true! What the Minister forgets to say is that he himself had added approximately one million low-income Canadians to the tax roster and forced these people who did not pay income tax previously to join taxpayers' ranks with his successive income tax hikes in 1984, 1985, 1986, and 1987. So the fact that he is allowing
850.000	people to get off the hook shortly before the election is not a bad thing, but I hope these people realize that they are being handed a wooden nickel. The fact is that they were taxed before, and taxed abusively.
What is too easily forgotten, and it will be my pleasure to refresh everyone's memory, Mr. Speaker, is that this Minister of Finance and this Government levied more tax over a period of three and a half to four years than any government since Confederation. Allow me to remind you, Mr. Speaker, that
when you yourself were elected to this House, in September 1984, we had a 9 per cent federal sales tax. It increased by 1 per cent in October 1984, bringing $1 billion a year into the Finance Minister's coffers. For my friends across the aisle, a billion dollars is a thousand million. That's big bucks!
In January 1986, the sales tax jumped again, from 10 to 11 per cent, bringing another $1 billion a year into the Government's coffers. Did it end there? Of course not! In April 1986, a mere three months after the increase I just described, the sales tax went up from 11 to 12 per cent, bringing in another billion. I think that the Hon. Member for Duvernay (Mr. Della Noce), who is showing me a graph representing the exponential rise of the sales tax in Canada, thus supports what I have said.
Never has a Government increased taxes as the Conservative Government has. In July 1985, taxes increased on candy, soft drinks, drugs, dental instruments, toothpaste, and so on, raising government revenues by $400 million a year.
I will skip the small increases of $60 million or $40 million. I am coming to the most important, the increases in gasoline excise tax. In September 1985, it went up two cents a litre, bringing the Government $900 million. In January 1987, another cent a litre increase, for my friend from Duvernay who knows gasoline well; this brought the Government $450 million. On February 19, 1987, as if people were not paying enough for their gasoline, there was another cent a litre tax, bringing $450 million more into the Finance Minister's pockets. And in April 1988, not so long ago .. . even as we speak, another . ..


Jean-Claude Malépart: Another one!


Jacques Guilbault: Yes, my colleague from Montreal-Sainte-Marie (Mr. Malepart) can't believe his ears. I am refreshing his memory. Another cent a litre on gasoline brought in another $450 million for the Minister of Finance. I don't understand where he finds pockets that are big enough to hold all that money!
And that's not all. Excise taxes on alcohol and tobacco went up to punish people with bad habits. In May 1985, an increase of these taxes raised government revenues by $340 million. In February 1986, they went after another $150 million. In that same month, February 1986, there were two increases, Mr. Speaker, that brought in a total of $70 million. In January 1988, more recently, another increase of $175 million hit smokers and drinkers.
But that's not all. There are people who need to make long distance calls to talk to their family at the other end of the country. They were hit with a 10 per cent tax on long distance calls. That does not seem like much, but it amounts to a lot of money. This tax was just imposed in January 1988 and, believe it or not, it brings the Minister of Finance a tidy $945 million a year. 1 am starting to understand where the Government found so much money to be able to spend $164 million to buy the election in Lac-Saint-Jean.
July 21, 1988

Only by looking at the public accounts did I realize where it was able to get all that money. So when somebody tells me that this tax reform is fair, equitable and equal for all Canadians, I say: No, it is unjust, inequitable and, because of the indirect taxes that I have just listed, it is regressive since it places a heavier burden on low-income wage earners. That is why my colleague from Laval-des-Rapides (Mr. Garneau) has moved an amendment I will support, and that is why we cannot support the government's Bill.


Richard Grisé: On a point of order, Mr. Speaker.


Mr. Deputy Speaker:: The Hon. Parliamentary Secretary for the Deputy Prime Ministre (Mr. Grise) on a point of order.


Richard Grisé: Mr. Speaker, the Hon. Member from Saint-Jacques (Mr. Guilbault) just mentioned at the outset of his remarks that we had reached a point where closure would be invoked in this debate on Bill C-139. Therefore, I think you will find there is unanimous consent of the House to put this amendment and defer the vote until 6 p.m. on Monday, July 25 1988, and to vote on the main motion immediately after that deferred division on the amendment without debate.


Mr. Deputy Speaker:: The House has heard the proposal made by the Hon. Parliamentary Secretary for the Deputy Prime Minister. Is there unanimous consent?
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Some Hon. Members:: Agreed.


Mr. Deputy Speaker:: Therefore the question is on the amendment standing in the name of the Hon. Member for Laval-des-Rapides. Is it the pleasure of the House to adopt the amendment?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


Mr. Deputy Speaker:: All those in favour of the amendment will please say yea.


Some Hon. Members:: Yea.


Mr. Deputy Speaker:: All those opposed will please say nay.


Some Hon. Members:: Nay.


Mr. Deputy Speaker:: In my opinion the nays have it.
And more than five Members having risen:


Mr. Deputy Speaker:: According to the agreement made earlier this day, the division stands deferred until Monday, July 25, at 6 p.m.
According to the other agreement made earlier this day, this House stands adjourned until Monday, July 25, at 11 a.m.


[Stage Direction]
The House adjourned at 8.00 p.m.
[Stage Direction]

Monday, July 25, 1988
[Stage Direction]
Prayers