1988-03-28

Hon. Don Mazankowski (Deputy Prime Minister, President of the Privy Council and President of the Treasury Board):: Mr. Speaker, on behalf of the Minister of National Health and Welfare (Mr. Epp), and pursuant to the provisions of Standing Order 67(2) and Standing Order 99(2), I wish to table, in both official languages, the government response to the first report of the Standing Committee on National Health and Welfare entitled Booze, Pills and Dope, Reducing Substance Abuse in Canada.

[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 46 petitions bearing Nos. 332-3814, 332-3871, 332-3916, 332-3917, 332-3936, 332-3937, 332-3966 to 3323971 inclusive, 332-3975 to 332-3982 inclusive, 332-4007 to 332-4029 inclusive, 332-4131, 332-4137, and 332-4144.



INDIAN ACT


Hon. Gerald S. Merrithew (for the Minister of Indian Affairs and Northern Development) moved: for leave to introduce Bill C-122, an Act to amend the Indian Act (by-laws and membership rules).


Mr. Speaker:: Mr. Merrithew for Mr. McKnight, seconded by Mr. Hees, moved for leave to introduce the Bill. Shall the Hon. Minister have leave to introduce the Bill?


Some Hon. Members:: Agreed.


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


Gerald Stairs Merrithew: for leave to introduce Bill C-123, an Act to amend the Indian Act (minors' funds and surviving spouse's preferential share).


Mr. Speaker:: Mr. Merrithew for Mr. McKnight, seconded by Mr. Hees, moved for leave to introduce the Bill. Shall the Hon. Minister have leave to introduce the Bill?


Some Hon. Members:: Agreed.


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


Donald Frank Mazankowski: for leave to introduce Bill C-124, an Act to amend the Canada Labour Code.

March 28, 1988
Petitions


Mr. Speaker:: Is it the pleasure of the House that the 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.
Mr. Speaker:: When shall the Bill be read the second time? At the next sitting of the House?


Some Hon. Members:: Agreed.

[DOT] (mo)



PETITION


Mr. John Parry (Kenora-Rainy River):: Mr. Speaker, 1 have the honour and privilege, on behalf of the constituents of Kenora-Rainy River, to present this morning three petitions duly certified by the Clerk of Petitions. The first is signed by approximately 92 residents of the community of Fort Frances and the communities of Sioux Narrows and Watten Township. The second is signed by approximately 27 residents of the community of Fort Frances and the third is signed by no less than 216 residents of the communities of Ignace, Dryden, Wabigoon, Dinorwic, Dyment, Vermilion Bay, Eagle River, Waldhof, and Borups Corners.
These petitioners, along with the well over 1,000 who have already signed petitions from various communities in my riding, are calling upon the Government to redress the inequitable situation which has been created by the application of the northern residents' tax allowance and seek the Government's remedy in extending that tax allowance to all those ridings consisting of remote and isolated communities designated and known as Tier III ridings.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Richard Grisé: Mr. Speaker, I ask that all questions be allowed to stand.


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


Some Hon. Members:: Agreed.
[ Translation]


Mr. Fernand Jourdenais (La Prairie):: Mr. Speaker, I wish to move a motion under Standing Order 29.
I respectfully ask the Chair to accept my proposal to adjourn the business of the House for an emergency debate on the conduct of the Commissioner of Official Languages of Canada, Mr. D'Iberville Fortier.
I have received several opinions as to the validity of my request which in every respect meets the Standing Orders of the House as adopted in June 1987. Beauchesne's, the Table Research Branch, your predecessors and you yourself, Mr. Speaker, have laid down the rules for conducting this kind of debate. All the criteria are there for the Chair to accede to my request, and they are quite clear. If you will allow me, Mr. Speaker? I will be very brief.
I will spare you the various precedents I would not insult the Chair by quoting from authors like Erksine May, 20th Edition, Beauchesne's, Lamoureux or Jerome. The Clerk of the House, Mr. Robert Marleau, and his colleagues are eminently qualified to confirm the accuracy of my statement.
Mr. Speaker, yesterday afternoon, all my Conservative colleagues from Quebec sitting in this House vigorously endorsed the present proposal at a convention my Party held in Montreal.
It is the first time in the history of the House that a senior official appointed by Order-in-Council to be the "watchdog" of bilingualism has been condemned by a legislative assembly.
This morning, according to the rules, I sent the Chair notice of my request. I included a passage from the unanimous motion condemning D'Iberville Fortier. I sent copies of my request to the Chair, to all Members of this House and to all Members of the Quebec National Assembly. In this connection, Mr. Speaker, I would like to take a few moments to read to the House the motion of the Leader of the Opposition, as amended by the Premier and adopted unanimously by the National Assembly on March 24, 1988. The Secretary General of the Quebec National Assembly has been asked to send you a certified copy, if so requested.
Mr. Speaker, here is the text of this unanimous motion:
That this National Assembly vigorously condemns ...


Mr. Speaker:: I realize the subject is a very important one, but I don't think it is appropriate to read a motion by the National Assembly of the Province of Quebec. I agree the motion is also very important, but the Hon. Member does not have to put the question for the Speaker. Proceed, please.


Fernand Jourdenais: Mr. Speaker, I accept your ruling.
March 28, 1988

It is unthinkable that we should not accede to the request of the premier of a province for an explanation from D'Iberville Fortier, who is a servant of Parliament and of this House.
My Party has taken a clear stand on this question, as have the Liberals and the NDP. Mr. Speaker, please don't tell me we will have to listen to Mr. Fortier in committee or somewhere else! It is in this House, under the TV lights, that we shall explain to Canadians that under Section 91 of the British North America Act, the federal Government, and especially Parliament, shall not interfere in areas under provincial jurisdiction.
Many Members of this House support my request for this debate. I am sure that out of respect for our institutions, the provinces and ourselves, we would like to debate the subject immediately. However, according to our Standing Orders, there can be no immediate debate.
Mr. Speaker, I therefore ask you to agree to a debate at eight o'clock this evening, and I promise it will finish at seven o'clock tomorrow morning, at the latest.
Mr. Speaker, I therefore move, under Standing order 29, that this House be now adjourned to proceed with the consideration of statements made by the Commissioner of Official Languages of Canada.


Mr. Speaker:: First of all, I am sorry, but originally I said this was a question to be raised according to the usual procedure, like a question of privilege. However, it is not a clear question of privilege but a request under Standing Order 29.
I think we can say that of course this is a very important issue for all Canadians and especially for Canadians in the province of Quebec and Francophones outside Quebec. A servant of this House has made some very interesting statements which during the weekend were the subject of a great deal of debate.
However, according to the Standing Orders it is up to the Chair to decide. I listened very carefully to the Hon. Member. The question he raised is a very timely one which, as I said before, concerns many Canadians. However I must advise him that on procedural grounds I cannot allow this kind of debate because, in my opinion. Standing Order 29 does not provide for this. I would suggest that the Hon. Member might more effectively follow through on his remarks by making representations to the Joint Committee on the Official Languages. After all, it is important and necessary that Hon. Members have a very clear understanding of the purpose of Standing Order 29, especially when another forum is available for debate. We do have an important problem, and it should be raised before the committee. I understand the feelings of the Hon. Member, just as I understand the significance of the subject. I would urge the Hon. Member and all his colleagues in the House to accept my ruling because I think it is in keeping with the Standing Orders.
Customs Tariff



GOVERNMENT ORDERS


Donald Frank Mazankowski: That Bill C-l 18, an Act to amend the Customs Tariff, be now read the second time and referred to the Standing Committee on Finance and Economic Affairs.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


Richard Grisé: Mr. Speaker, Hon. Members may have noticed that the Bill under consideration today is not very long, but still Canadian companies and individuals think it is important. If the Bill is adopted we will be in a position to amend the Customs Tariff tabled by the Minister of Finance (Mr. Wislon) last February 10 when he presented his Budget.
Most of these tariff amendments will result in reducing or eliminating duty on equipment not available from production in Canada: specified machinery used by the oil-sands producing industry, certain compressors and differentials for automotive vehicles, steel rods used in the construction of silos, unrecorded magnetic tapes used to make cassettes for the blind, certain model kits, and burial shrouds. Some of the amendments are of a purely technical nature, for they simply continue to guarantee duty-free entry of equipment which was not subject to duties before the February 10 Budget, including among others facsimile transmission apparatus and diesel engines used in certain construction equipment.
Mr. Speaker, these amendments are among the least voluminous tariff measures introduced in recent Budgets. This Bill is substantially different from Bill C-87 proclaimed on December 24, 1987, which was one of the most important Bills the House had to consider. Naturally, it dealt with tariffs, but its main purpose was to review the whole customs tariff to ensure its consistency with the international harmonized goods designation and codification system.
Mr. Speaker, the development and implementation of the new harmonized system, which required massive resource investments from the business sector, without mentioning public expenditures, explain in large part the relatively small number of tariff amendment requests requiring the introduction of legislation to have been submitted to the Minister of Finance since the tabling of the 1987 Budget. I believe that this situation is also due to the fact that manufacturers, importers and other business people have focussed all their attention on the Free Trade Agreement with the United States. As Hon. Members already know, the agreement provides for the elimination of all tariffs imposed by Canada

March 28, 1988
Customs Tariff
and the United States on the goods they trade. Depending on the products, certain tariffs will be eliminated on January 1, 1989, while others will be phased out over periods of three, five or ten years from that date.
I have already indicated that, while the tariff changes included in this bill are few, they are very important for the companies and individuals who will benefit from them. As an example, the tar sands development industry will be able to import duty free a wide variety of parts not manufactured in Canada, which will allow this industry to reduce its costs at a time when it is attempting by every means possible to produce oil at a cost competitive with world market prices.
Mr. Speaker, the policy of the Government is to meet the needs of the business sector and individuals by amending the tariffs in its annual Budgets. This Bill maintains this tradition. I therefore urge the House to adopt it as quickly as possible.


Miss Aideen Nicholson (Trinity):: Mr. Speaker, as the Hon. Parliamentary Secretary said, this is a fairly straightforward technical Bill which need not take up a lot of time in the House but should, I think, be examined rather carefully in committee.
The Bill introduces amendments to the customs tariff and these were included in the Ways and Means motion tabled as part of the Budget on February 10, 1988. Duties are being removed on a range of equipment used by the oil sands industry, certain compressors for motor vehicles, steel rods for farm silos, and so on. The Government tells us that all these changes have been made at the request of certain segments of industry, and of course we will want to confirm that through hearings with other interested parties to ensure that this is indeed as generally acceptable as we are told.
The Bill also provides for some technical amendments to the customs tariff, some of which are to ensure that goods which are now duty free continue to be so. These include facsimile equipment and diesel engines used in certain construction equipment.
Finally, there are some measures in this Bill to correct errors which were made in the new harmonized systems tariff. As the Parliamentary Secretary mentioned in his speech, the previous Bill, Bill C-87, contained a truly enormous list of goods on which there were changes. The Bill in itself was not very large, but the schedules were enormous comprising several columns. In speaking to that Bill on December 11, I said that brokers, and especially small importers, were clearly going to have problems with new names, new designations, and so on.
The original Bill, C-87, will require very careful monitoring. It does contain one clause, Clause 131, which could be used to
give relief. Clause 62 gives the Government very broad authority of a kind which had been used in the past merely to implement GATT decisions. However, that broad authority could potentially be used to give relief to innocent citizens who find themselves caught up in the maze of this Bill.
One would hope that the Department of Customs and Excise would continue to be helpful to users of the system. Much publicity was undertaken in connection with Bill C-87 and information was provided to the larger brokers to guide them through that more complicated Bill. Bill C-118 contains amendments which the Government has frankly admitted are necessary as a result of its errors.
On the face of it, Mr. Speaker, this is a straightforward Bill, but even Bills which are apparently straightforward and technical often present problems for the users. We do not know how extensive the Government's consultation has been. I would hope that in committee we will be able to hear witnesses and get a better understanding of the effects of these measures on Canadians.


Mr. Simon de Jong (Regina East):: Mr. Speaker, I wish to say a few words on behalf of the New Democratic Party on Bill C-118. As the Parliamentary Secretary indicated and the spokesperson for the Liberal Party concurred in, this is not a major Bill. It is not a thick Bill like the one we received earlier which dealt with the harmonization of the trade practices between Canada and other countries involved in GATT. When we discussed Bill C-87 there were concerns expressed with regard to some of the measures. While the Government ignored some of the points raised at that time it has now, through Bill C-118, attempted to deal with some of the mistakes it made when it drafted the harmonization Bill, C-87.
This Bill removes tariffs on a range of equipment used by the oil sands industry, certain differentials and compressors for motor vehicles, steel rods for farm silos, recording tapes used to make cassettes for the blind, certain model kits, and burial shrouds.
We will have some questions in committee with regard to the importance of these measures, the revenue implications that they will have, and the type of consultation which has occurred between the Government and industry. There is not much more I can say about this Bill at this stage. Most of our questions will be asked in committee. We hope to receive appropriate responses from the Minister at that time.


The Acting Speaker (Mr. Paproski):: Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the second time and referred to the Standing Committee on Finance and Economic Affairs.
March 28, 1988

Hon. George Hees (on behalf of the Minister of Finance) moved:: That Bill C-117, an Act to amend the Excise Tax Act and the Excise Tax Act, be read the second time and referred to the Standing Committee on Finance and Economic Affairs.


Richard Grisé: Mr. Speaker, this Bill C-117 makes it possible to implement a number of proposals related to the Excise Tax Act and the Excise Act. Most of these amendments were announced last June in the White Paper on the tax reform and in the Notices of Ways and Means Motions which were tabled later on, more specifically on December 16, 1987. Moreover, this Bill makes it possible to implement a number of measures announced in the Budget speeches of February 18, 1987, and February 10, 1988.
From a tax point of view, this Bill is very important. Although it provides for some tax increases, it should be seen in its proper context. In this Bill, most of the revenue increasing measures are part of the global tax reform program. Generally speaking, this program is fiscally neutral: the major reductions in personal income tax, which represent some $12 billion over the next five years, will be compensated by an increase in revenues from corporate income tax and by a large number of the sales tax increases provided for in this Bill. It should be emphasized that, among other measures involving personal income tax, the tax reform program provides for an increase of 40 per cent of the refundable sales tax credit paid to low-income Canadians. The purpose of this measure is to considerably reduce the impact of the sales tax increases on less fortunate Canadians.
In addition to measures announced when the tax reform was unveiled, the Bill features others aimed at a major target, namely deficit reduction. The most important factor in our deficit reduction strategy has been a curb on the growth of public expenditures, and we have been highly successful in this endeavour: general expenses have gone down, and there has been a sharp decline in operating expenses and capital expenditures. However, intent on reducing the deficit and maintaining financial management improvement, we had to combine lower expenditures with the higher taxes proposed in the Bill. Although no Government likes to raise taxes, these measures reflect our commitment to show more responsibility in the financial management of the economy.
Mr. Speaker, allow me to deal with some of the measures which will enable us to boost revenues.
I should like to sum up the major steps through which we intend to increase revenues, as set forth in the Bill. Here are the main provisions of the over-all tax reform program: a 10 per cent tax on telecommunications services such as telephone and telex, excluding service charges for local residential
Excise Tax Act
telephone lines. The corresponding tax rate on cable and pay TV services will rise from 8 to 10 per cent. These changes took effect on January 1, 1988 and are expected to yield additional revenues of about $870 million a year.
The sales tax rate on paint and wallpaper products has increased from 8 per cent to 12 per cent effective January 1, 1988, which should bring in an extra $60 million annually.
To compensate the effects of the tax reform temporary measures on revenues, the payment of sales and excise taxes will be accelerated effective April 1, 1988. At present, all businesses are required to remit the sales tax on the last day of the month following the month of the taxable sale. Under the new provisions, the great majority of corporations will have to remit the tax on the 21st day of the month following the month of the sale, while the largest corporations, which represent fewer than 1 per cent of ail taxpayers, will be required to remit the tax twice a month.
This measure does not increase the amount of tax payable on each transaction, but only reduces the time elapsed between the date on which the taxable sale is made and the date on which the sales tax is remitted. This measure will make it possible for the Federal Government to get a one time cash flow increase of $1,6 billion for the fiscal year 1988-89.
Finally, Mr. Speaker, as was announced in the Notices of Ways and Means Motion of December 16, 1987, this Bill will increase the federal sales tax rate on beer, spirits, wine and tobacco products from 15 to 18 per cent, effective January 1, 1988.
The revenues resulting from this amendment, representing some $175 million per year, will be used to finance the increase in tax benefits to families with children.
This Bill will also allow for the implementation of two revenue increasing measures included in the February 1987 Budget.
Since February 19, 1987, the duties and excise taxes on tobacco products have increased by 4 per cent, which is about the rate of inflation. This measure should increase the revenues by some $70 million a year.
Moreover, to recover a greater portion of the air transport program costs, the February 1987 Budget provides for an increase in the air transportation tax levied by $4 per ticket, which should take in an extra $45 million in 1987-88.
Finally, this Bill provides for an increase in the excise tax on gasoline by 1 cent per litre, as announced in the February 10, 1988 Budget. This increase will come into effect on April 1, 1988. At the same time, the existing fuel tax discount for farmers, fishermen and other primary producers has been increased by an equivalent amount to protect them from the tax increase. The net increase produced by this measure should bring some $300 million in revenue in 1988-89.
The bill also provides for the implementation of a number of technical amendments to the Excise Tax Act and the Excise

March 28, 1988
Excise Tax Act
Act. Sales taxes on motor fuels have been transferred to the manufacturer to solve the administration and reporting problems which became apparent when these fuels were taxed at the wholesale stage.
The burden of federal sales and excise taxes on leaded and unleaded gasoline has been balanced to support the efforts of the Minister of the Environment who is trying to eliminate lead emissions from gasoline.
The tax rate on alcoholized coolers has been lowered to correspond to that of wine-based coolers to grant them equal tax treatment.
The provisions on the reimbursement of the sales tax for certified public institutions have been made more specific to ensure that the tax abatement is limited to non-profit organizations. Certain compliance provisions of the Excise Act have been reviewed to reflect reduced on site surveillance by excise officers in relation to the production of alcohol and tobacco products.
In addition, the Bill contains certain measures to reduce the paperwork of small businesses; more specifically, the tax ceiling for periodical and seasonal returns has been doubled, which will allow some 2,000 additional taxpayers to pay their taxes four times a year, twice a year or periodically rather than every month.
In response to the concerns raised by cultural groups, original engravings have been exempted from the federal sales tax.
Mr. Speaker, this Bill also amends certain fair price provisions included in Section 34 of the Excise Tax Act. Under the proposed amendment, the tax will apply on fair market values when non-arm's length sales are made. This amendment follows a recent ruling by the Federal Court which questioned the power of the Minister of National Revenue to determine the value of a product for tax purposes under such circumstances.
That amendment, as well as the provisions concerning the taxing of marketing and distribution costs, which will be implemented under another bill on November 1, 1988, should effectively solve the problem of value for the purposes of the sales tax before the second phase of tax reform is carried out.
Finally, the bill implements the provisions announced in the budget speech of February 1987 according to which the tax levy is shifted to the wholesaler's level for a variety of items such as candies, snack foods, pet food and certain electronic equipment. Thoses changes will come into effect on various dates between May 1 and August 1,1987. When the proposed rules on marketing and distribution costs are enforced on November 1, 1988, the tax levy on most of those items will be shifted back to the manufacturing level.
Other minor technical amendments provided in the Bill are aimed at clarifying the interpretation of some provisions in the
legislation and to give legislative authority to some present administration procedures.
In conclusion, Mr. Speaker, I want to reiterate that it is a very important bill. It is one of the basic aspects of our comprehensive tax reform which will enable us to reduce considerably the income tax collected from 8 out of 10 Canadian taxpayers. Moreover, it completes important steps in our Government's comprehensive strategy which is to reduce the deficit and to improve the financial management of the economy.
To enforce those changes, I call upon all Hon. Members to approve the Bill as soon as possible.
[DOT]	(1140)
[ English]


Aideen Nicholson: Mr. Speaker, this is a Bill to implement a number of increases in excise taxes. This is from a Government that came to power on a promise to reduce the deficit without increasing taxes.
The Prime Minister (Mr. Mulroney) was quoted early on as saying that taxes would not be increased generally because Canadians already pay a lot for the services they receive from the Government. He was also quoted as saying he would tax the rich, that the rich would pay handsomely. However, what is happening is that we are seeing enormous increases in sales taxes. The Minister of Finance (Mr. Wilson) regularly inveighs about the manufacturers' sales tax, which he says is a silent killer of jobs, yet he uses it and abuses it and piles taxes upon taxes on Canadians. Between the increases in personal income tax, many of them hidden because they were arrived at by deindexing, and the increases in sales taxes, this Government has taken an additional $22 billion from Canadians since it came to power.
[DOT]	(1150)
In his speech the Parliamentary Secretary also made a reference to reduction in personal income tax of approximately $2 billion this year. The Minister of Finance takes $22 billion away over a five-year period, proposes to hand back $2 billion in the pre-election year, and we are all supposed to be grateful. As the Parliamentary Secretary pointed out, many of these measures in the Bill before us were contained in the White Paper last June, the so-called tax reform paper, which also had a lot of the features of a budget, and in the subsequent Ways and Means motion tabled December 16. In addition, this Bill implements some of the measures announced in the Budgets of February 18, 1987 and February 10, 1988.
In talking about the White Paper, the Parliamentary Secretary repeated the myth that his Party has continued to express, that the package is fiscally neutral. The effect of fiscal neutrality is achieved by smoke and mirrors. The package the White Paper produced was to involve reductions of personal income tax by $12 billion over a five-year period,and an increase in corporate taxes by $5 billion over a similar period,
March 28, 1988

increases in manufacturers' sales tax, to which I will return, and then at least $2.6 billion worth of smoke and mirrors, that is, advanced remittances. Employers were initially required to remit at a faster rate, fortnightly instead of monthly, and later it became weekly instead of fortnightly, payroll deductions from their employees. That, I think, accounted for $1.2 billion.
Today the Parliamentary Secretary reminds us that by requiring business people to remit the sales tax earlier, on the twenty-first day of the month following the sale instead of the end of the month, and requiring some firms to remit fortnightly, we arrive at a situation where the Government has a one time cash flow increase of $1.6 billion for the fiscal year 198889. There were other pieces of smoke and mirrors in that exercise, but I think we should be clear that phase one of the so-called tax reform was not, and never has been, fiscally neutral.
In his speech, the Parliamentary Secretary also said that the most important element of the Government's strategy of deficit reduction has been to limit the growth of government spending. Unfortunately, that does not jibe with the facts. The facts are that this Government has tried to tax its way out of dealing with the deficit. While government spending has been reduced in some areas which are important to Canadians, such as post-secondary education, research, the environment, the Prime Minister's presidential lifestyle has required very large increases in government spending.
This Bill before us puts a 10 per cent tax on long-distance telephone calls and on cable and pay television services, which will net the Government $870 million a year. This tax is quite a hardship on people with small businesses who do a lot of business overseas as well as within Canada. I have heard from many people whose telephone calls are a necessary part of their business, and this will now represent a serious increase in their costs. The sales tax rate on paint and wallpaper products has increased from 8 per cent to 12 per cent, and this is expected to raise $60 million annually for the Government.
The taxes on beer, spirits, wine and tobacco products, which were previously announced, are all in this Bill and altogether will amount to something like $240 million a year. However, the tax that will concern many Canadians is the continued increase in the excise tax on gasoline, another one cent a litre increase effective April 1, 1988. Since this Government has been in power it has raised the price of gas by 23 cents a gallon. That is causing severe problems to our transportation industry, already competing with very large American firms, and is also causing problems to our tourism industry. Of course, the cost of gasoline goes right through our economy. It affects manufacturing, packaging, storage, heating of retail facilities, and so on. At every point in the distribution chain, increased gasoline costs affect the final cost to the consumer.
When I spoke on the borrowing authority and on the Budget, I pointed out again and again that this Government, since it came to power, has taxed Canadians in a way that is unprecedented since Confederation. I will not repeat all those
Excise Tax Act
criticisms again today, however, they certainly still hold. The Parliamentary Secretary, in concluding his speech, said that the over-all tax reform package provides major personal income tax cuts for more than eight out of ten Canadians. What he omitted to say is that it provides income tax cuts to poorer Canadians with incomes of less than $15,000 a year, and that these income tax measures, which have been misleadingly called "reform", are particularly hard on young families with children. A family with two children and one earner earning around $30,000 per year will pay a great deal more after this package.
Furthermore, what has been left out of this argument is the cumulative effect of all the tax changes that have been built in since the Government came to power. I refer to the deindexation of family allowances, the deindexation of personal allowances. Factor all those measures in and one comes up with a very different picture in which eight out of ten Canadians will not be benefiting.


Simon Leendert de Jong: Mr. Speaker, I listened attentively to the spokesperson for the Liberal Party. I wish to address myself to this Bill as well. Many of the criticisms we propose to Bill C-117 are ones that she has stated. Indeed, when we come to look at Bill C-l 17 we really begin to see the smoke and mirrors of the Government, the double-talk and the double-think.
When introducing this measure the Parliamentary Secretary talked about tax reform and the great job the Government has done in lowering taxes paid by ordinary Canadians. Yet we know that since the election of the Conservative Government in 1984 some $22 billion in increased taxes have been levied on the Canadian taxpayers. What tax reform does is to return some $2.2 billion to them. The Parliamentary Secretary was certainly very forward when he suggested that the $2.2 billion was a great effort by the Government to relieve the tax burdens that ordinary Canadians pay. Yet he did not mention the $22 billion in extra taxes that the Government is collecting.
Of course, the Government likes to collect its money in what I would call the sneaky way. It has done a partial deindexing on marginal tax rates. It has deindexed family allowances so that the benefits from family allowance do not keep pace with the increase in inflation. However, these are things that are not immediately apparent to the Canadian taxpayers. I say that because they would first have to figure out what the rate of increase should be if it were fully indexed to inflation as opposed to the increases that they are getting under the partial deindexing that the Government has introduced.
The Government tried to take on the seniors by deindexing the old age pension. However, the seniors were a little smarter than the Government, and certainly a little faster on their feet. They forced the Government to backtrack on that measure.
The biggest revenue grab by the Government was the partial deindexing of the income tax which will mean that as inflation

March 28, 1988
Excise Tax Act
increases the Government's take will increase also. The Government benefits from inflation because it has now partially deindexed the income tax.
One wonders, if it is in the Government's vested interest to have a certain amount of inflation, then how committed is it to reducing inflation to zero? In the last little while members of the New Democratic Party have been asking for a lower interest rate. The Minister of Finance (Mr. Wilson) defends a high interest rate because he figures this is the way to fight inflation, that inflation at around 4 per cent is still too high and therefore we have to maintain this high interest rate.
Yet when we look at Bill C-117 we begin to recognize why we have the high inflation that we do have. It is not because of market forces. It is because of the forces of the Government. It has increased the taxes on manufactured goods which has resulted in increased prices right across the board. So it does not matter how high the interest rate is, it is the taxation policies of the Government that are maintaining an inflation rate of 4 per cent.
When we hear the Minister of Finance tell us that we need a high interest rate in order to combat inflation I suggest to the Canadian people that if we are to combat inflation we should turf this troupe out. If we did not have a Conservative Government, inflation would be down around 2 per cent. I would venture to estimate that 50 per cent of the reason that we have the inflation rate that we do have is the tax measures of the Government.
Let us take a look at some of these tax measures. The Bill which we are debating today will justify a 10 per cent increase on telecommunication services such as telephone and telex services, not including the charges for local residential lines. How much will this take out of the economy? It will take some $870 million per year, by the Government's own figures. Now our telephone costs are higher, which increases the costs of doing business. This increased cost will be shifted on to the consumer. It is no wonder that we have this inflation rate when the Government is taxing anything that sits, moves and jumps.
The sales tax rate on paint and wallpaper products is increased from 8 per cent to 12 per cent effective January 1, 1988. That will take an extra $60 million annually. In other words it will cost a little more to renovate one's home, put on some new wallpaper or to paint, whether it is a renovation or new construction. Again, we see the cost of homes and home fixtures being increased because of the measures of the Government.
Bill C-117 increases the federal sales tax rate on beer and spirits, wine and tobacco products from 15 per cent to 18 per cent. There is an increase in specific excise tax on the excise duty rates for tobacco products by 4 per cent.
There is an increase in the air transportation tax levied by $4 per ticket to recover a greater proportion of the air transport program costs. There is an increase in the excise tax on gasoline and aviation gasoline by one cent per litre. As my
colleague and the spokesperson from the Liberal Party pointed out, since the election of the Government the federal take on gasoline has increased by some 23 cents per litre. My gosh, if Canadians wanted to have cheaper gasoline prices they should turf this group out. That inflationary cost is something that gets passed on to the consumer as well.
The Bill also introduces several technical amendments to the Excise Tax Act and the Excise Act. These include a shift of the taxes on motor fuels to the manufacturing level to address administration and compliance problems. Again, this is something that the finance committee has been concerned with. We did issue a report on it. I am happy to see that there is some sensitivity by the Government on this matter. Whether or not it deals with the problems of the small wholesalers of gasoline or not I am not quite certain. I think that the measures of the February 1987 Budget created unfairness in the system. That unfairness still prevails.
Part of the problem with our present excise tax and our sales tax is that they create distortions in the economy. As well as being unfair to low-income Canadians and to consumers they also create distortions in our economy. I will be addressing these distortions a little later in my remarks.
The Bill also shifts the sales tax to the wholesale level for snack foods, pet food and pet litter, candy and confectionery goods, and certain electronic equipment. This comes out of the February 1987 Budget. The tax on most of those products will be shifted back to the manufacturing level when the marketing and distribution cost measures announced in the February 1988 Budget come into effect on November 1 of this year.
The Bill clarifies the refund provisions applicable to certified public institutions. It amends the fair price provisions to apply tax on fair market values when non-arm's length sales are made, or where it is difficult to determine the sale price. There is a revision to certain compliance provisions in the Excise Act to reflect reduced on-site surveillance by excise officers in relation to the production of alcohol and tobacco products. Those are mainly housekeeping type measures.
One of the relieving measures in this Bill, and there are a few, is an increase in the existing fuel tax rebate available to primary producers for the excise tax on gasoline by one cent a litre to compensate for the increase announced in the February 1988 Budget. Thank heavens for that. The farmers in my district who are already having difficulty enough in surviving with the low grain prices and high input costs, will not be asked to pay an extra cent a litre for the gasoline that they must use to put the crop in the ground.
Another relieving measure is an increase in the tax threshold for periodic and seasonal filers in order to reduce the paper burden for small businesses. I am happy to see this provision. A small business person or restauranteur had to fill out those forms for, at times, very insignificant amounts, but it did take time. Operating a restaurant is not an easy matter, particularly
March 28, 1988

if one has loads of paper work to deal with a few dollars of remittance to the Government on some sales tax item. It was a necessary part of the job, it did not make sense, and I am glad to see that there is some sensitivity on this issue from the Government.
We also see a little sensitivity from the Government regarding the fine arts. As a relieving measure in this Bill there is an exemption for original prints from the application of federal sales tax.
Let us look at the Government's philosophy in terms of tax. Bill C-117 is a Bill to amend the Excise Tax Act and the Excise Act. It is legislation coming out of the February 10, 1988 Budget. In light of tax reform, the Minister of Finance has missed the opportunity to introduce real tax reform. I think that my colleague, the chairman of the finance committee, will say a hearty "hear, hear" when I make this statement. We all recognize that, in essence, the Minister has flubbed when it comes to tax reform.
In other jurisdictions that have implemented tax reform it has been done as one complete package coming into effect on one day. When there was an increase in the sales tax and people saw the price of goods and services increasing, on the same day they also saw a reduction in their income tax, and low income people saw an increase in family benefits. All of this was done in one day in one complete package with most of the middle and lower income people benefiting from such measures. Certainly, we do not see this today in Bill C-117 and the Government's attempt at tax reform. It has reduced marginal rates. But what it has given with one hand it has taken back tenfold with the other hand. There is an increase in taxes of $22 billion and a rebate to the average taxpayer of $2.2 billion. That is a clumsy way of playing a shell game, something that I do not think average Canadians will be fooled by.
Since most of the tax reform proposals dealing with sales and excise taxes are proposed in stage two of tax reform, what is not in the Bill is more interesting than what is in it. It is obvious, by delaying stage two of tax reform, which is not expected until after an election, the Minister and the Conservative Government are content in sustaining a deeply flawed, unfair, and inequitable system of federal sales tax and excise tax.
Since the 1984 election the Conservative sales and excise tax revenues have escalated dramatically. It is clear that the Government is increasingly relying on the regressive sales and excise taxes to finance federal expenditures. The more the Government does this, the more difficult it will be to revise it.
The theory and implementation of federal sales tax is quite straightforward. The underlying principle of the tax is that it should apply only once in the distribution of the goods from producer to the consumer. Manufacturers are given licences which allow them to buy goods tax free. When the manufactured products are sold to non-licenced firms such as wholesalers they then become subject to tax. This method of
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licensing manufacturers is designed to avoid the problem of multiple taxation.
Canada is the only remaining major industrial country with a sales tax at the manufacturers' level. Canada now collects more revenue from those goods and service taxes, 35 per cent of our total revenues, than most OECD countries where the average is 29 per cent.
In the six decades since its inception, a wide array of variable rates and exemptions have been developed to reduce the inherent regressivity of such a tax. The system is so skewed that in 1981, six commodities accounted for 61 per cent of total federal sales tax revenue, three of which, motive fuels, alcohol, and tobacco were also subject to excise taxes.
Excise taxes which are levied under the Excise Tax Act are usually ad valorem taxes levied as a percentage of the manufacturers' selling prices, similar to the federal sales tax. They were originally designed to apply to luxury or nonessential goods. Excise taxes now are levied on goods such as alcohol, tobacco, jewellery, matches, lighters, coin-operated games or amusement devices, motive fuels, air travel, playing cards, radio and television programming services, automobiles, et cetera. Excise taxes apply to both domestically produced goods and imports. The excise duties are usually applied at a fixed rate for a given quantity of goods. Excise duties are only levied on alcohol and tobacco products. These sumptuary taxes are designed specifically to reduce consumption of what are considered to be harmful products, like the working man's beer.
The degree to which the Conservatives have decided to emphasize these regressive, hidden commodity taxes in their deficit reduction plans has become one of the hallmarks of this administration. Amid the controversies surrounding the capital gains tax exemption, the partial deindexing of marginal tax brackets, pensions, and family allowances, those commodity tax increases have gone forward virtually unnoticed.
There are some major problems with the current system. First, there is the difference in sales tax burden. The federal sales tax is levied on the manufacturer's selling price. However, the selling price may vary for the same product depending upon whether the manufacturer sells it to a wholesaler or to a retailer. Selling to a retailer brings with it a higher relative tax burden. When the manufacturer sells his or her products to a retail outlet, a higher cost will be incurred than if the product is sold to the retailer directly.
In 1977 it was estimated that fully 44 per cent of taxable manufacturers' sales went directly to retailers. To reduce this discrimination there is now an extensive list of what are called notional values, which are used to discount the price at which a manufacturer sells a product to a retailer to the price that would have been paid by a wholesaler. We can see the arbitrariness of the sales tax system.
Another problem is the taxation of production goods. When purchasing intermediate goods to be used in the production

March 28, 1988
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process, the manufacturer inevitably ends up paying hidden sales taxes on some goods. It was recently estimated that 42 per cent of federal tax revenues were collected on intermediate and capital goods. This leads to the third concern that we have with the present sales tax system, and that is the discrimination against exports. Hidden sales tax costs are forward shifted to the export price, making exports more costly than they would otherwise be. We are about the only industrialized country in the world that puts a tax on our exports.
The fourth concern that we have with the sales tax is the advantage to imports. Canada does not include the cost of transporting goods to Canada as part of the cost base for the calculation of federal sales tax. Consequently, those imports competing with domestically produced goods are often subject to less tax than goods produced in Canada. We tax exporters through our sales tax system and we give an advantage to importers. Aren't we smart? Instead of the Government attempting to deal with it in phase two of tax reform, which should have been brought in at the same time as phase one, the Government, through Bill C-117, is complicating and making worse an already bad situation.
Our fifth concern is the complexity. The licensing requirements of manufacturers and the documentation which entail, the special exemptions for certain goods, and the system of notional values, all tend to make the federal sales tax administratively very burdensome and unnecessarily complex.
The new 1 cent per litre increase in gasoline, which is not applicable to farmers, fishermen, and other primary producers, will cost the average Canadian family of four, assuming a $35,000 annual income, some $50 extra per year. This amount is roughly the same as the decrease in tariff rates, which the first two years of the free trade agreement will see as a reduction of federal government revenue. In other words, the Government will lose this money because of the free trade agreement and the reduction of tariffs. It will be reducing its revenues, but the Minister of Finance has made certain that he will grab it out of the hands of consumers by increasing the price of gasoline by 1 cent per litre.
The new telecommunications tax on long distance rates is a blow to Canadians for two reasons. First, the finance committee of which I am a member, in its report last fall, recommended that people living in the remote North be subject to the 10 per cent tax on long distance calls only to a maximum of $3, since many people living in northern Canada depend heavily on long distance telephone service. The Minister rejected the recommendation. In fact, the Minister of Finance rejected most of our recommendations, but this is one about which I feel somewhat outraged. It is a tax on people living in remote and rural areas who depend upon telephone services much more than people living in the cities. People in remote areas have to place many more long distance telephone calls than city people, and this 10 per cent tax is an unfair levy on them.
Second, the CRTC ruled that Bell Canada should reduce its rates because Canadians were paying too much on their telephone bill. The Government's new 10 per cent tax on long distance rates ensures that Canadians are still paying too much on their telephone bill.
These are some of our concerns with Bill C-117. It increases inflation, despite what the Government has been saying about the reasons for having a high interest rate to combat inflation. As I mentioned earlier, if we are to combat inflation, the best thing to do would be to defeat a Government which has been so inflationary because of the increases in sales tax which it has imposed.
We are also concerned about the unfairness and complexity of the present sales tax regime. I admit that it is a problem which the present Government inherited from the previous Government. However, the Government has been in power for almost four years now, and it still has not done anything about it. In fact, it has made a bad situation even worse by piling more sales taxes on average consumers, by taxing pet food, candy, chocolate bars, and so on. It has created distortions in the market-place with unsalted peanuts not being taxed and salted peanuts being taxed. If we look at the list we see that certain yoghurt products are not taxed whereas certain frozen bars are taxed. There are distortions in the market-place because of the unfairness of the sales tax system.
We have seen the Government do its smoke and mirror act regarding tax reform. In a sneaky way it has taken more money out of the pockets of Canadians while up-front it has given them some tax relief.
This is certainly not honest and fair government. A fair Government would have been honest with Canadians and, if it was to increase taxes, it would do it in an up front way rather than through hidden sales tax.
We are not happy with the Bill. As I mentioned before, it makes a bad situation even worse. We are certainly looking forward to reviewing it in committee.


Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, I take part in the debate on Bill C-117 very reluctantly because we are not too happy about having to face a government that uses regressive taxation, that resorts to hidden taxes to collect from Canadian consumers enormous amounts of money, admittedly to strike where it shows the least and use measures at its disposal such as the sales tax, the most unfair of all because it affects everybody without any consideration of income. Rich and poor alike pay the same sales tax. That is what a regressive tax is, Mr. Speaker, and a sales tax such as this one must be changed, even though it brings in significant revenue, and I think there is a disposition in this country to replace this approach with a fairer and more progressive one. But we are starting to lose patience with this Government. After three and a half years of endless studies and broken promises, Canadians have every reason to grow impatient.
March 28, 1988

The objective of Bill C-117 is to implement numerous sales and excise tax increases the Government announced in the Budget of February 18, 1987, also in the tax reform of June 18, 1987 and, finally December 16, 1987 in the most recent Budget of February 10, 1988. It is therefore because of those four Government measures that we now have before us a Bill that seeks to raise present taxes and give effect to the budgets or so-called economic statements the Government presented in the last year.
Mr. Speaker, I could detail those tax measures and tell you the 12 per cent tax the February 1987 Budget imposed on candy, snacks and ice cream as of July 1, 1987 has brought in $60 million in revenue and will bring in an estimated $80 million more in 1988-89. The same February 1987 Budget slapped a 4 per cent tax on cigarettes and tobacco that yielded $70 million in 1987-88 and will yield an estimated $77 million in 1988-89.
The air transportation tax was increased by $4 per ticket: $45 million in 1987-88 and $50 million in 1988-89; the sales tax on leaded and unleaded gasoline was equalized as of April 1, 1987, resulting in revenues of $30 million in 1987-88 and $30 million in 1988-89.
Mr. Speaker, as I said earlier, we had the tax reform in June and December 1987, when a 10 per cent tax was added to long-distance calls and the tax on cable TV was increased from 8 per cent to 10 per cent. As of January 1, 1988, this tax will raise $877 million in fiscal 1988-89.
As was stated by a number of my colleagues in this House, the tax on long-distance calls is unfair because it mainly affects people who live in rural areas. The tax on cable TV is unfair to people on medium and low-incomes for whom this may be the only kind of entertainment they can afford. And now the tax on cable TV is being increased from 8 to 10 per cent. There is also an increase from 8 to 12 per cent on paint and wallpaper, which will raise $60 million in 1988-89. The accelerated remittance of sales and excise tax, which will become effective in April 1988, will raise $1.6 billion. Another increase in the excise tax on alcohol and tobacco from 15 per cent to 18 per cent will raise $175 million.
The 1988 Budget brought down on February 10 brought us a one cent per litre increase in the excise tax on gasoline. This will raise an additional $225 million in 1988-89.
Mr. Speaker, what I don't like about sales tax, and I think many Members will agree, is that it is applied indiscriminately. The rich pay and the poor pay. They all pay the same amount because this tax is collected on a transaction, and no matter what your income is, the tax remains the same. That is why it is regressive, unlike the tax tables which are progressive, in other words, the more you earn the higher your income tax.
As I said earlier, this Bill implements certain statements made in the House and certain Budget proposals, but for some reason the Government has put off presenting this Bill until today. Mr. Speaker, it is not unusual for the Government to delay such a Bill. It has made a habit of bringing in Bills that
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affect all Canadians and increase taxes just before the House adjourns for Christmas, Easter or for the summer.
Mr. Speaker, we must remember that the same Government, the same Prime Minister (Mr. Mulroney) and the same Minister of Finance (Mr. Wilson) promised not to raise taxes. And we do remember. This is not new.
I want to quote from Hansard of March 6, 1984, two statements made by the Minister of Finance:
We would cut spending. We would not raise taxes. Tax levels in Canada are already too high.
But that is what he did, he made the load heavier still, not by taxing the rich and the 60,000 Canadian companies which do not carry what I consider their fair share of the tax burden, but by taxing low- and middle-income Canadians.
Here is a statement made by the leader of that Party, the Prime Minister of Canada, and reproduced in Le Devoir of November 29, 1984. I am quoting: "Canadians pay a fair amount of money for government services, and they have the impression they are paying enough". Quite true. The Prime Minister was right. As individuals we pay enough taxes. Perhaps he might practice what he preaches and tax his friends, those rich people who do not pay their fair share.
Since the Conservatives took over, Mr. Speaker, revenues from indirect taxes, sales taxes, excise taxes, went up much more sharply than those produced by direct taxes. Revenues from sales and excise taxes jumped by 77 per cent between 1984-85 and 1988-89, while personal income taxes rose by 55 per cent since this Government was elected, as compared with only 28 per cent for corporations and rich people. Through personal income taxes, sales taxes and excise taxes, individual Canadians rather than corporations had to shoulder most of the added burden.
Again, Mr. Speaker, for your enlightenment I could sum up the table I have here which shows the load Canadians have had to carry since September 1984: indirect taxes, higher sales tax from 9 to 10 per cent on October 1, 1984, from 10 to 11 per cent in January 1986, and from 11 to 12 per cent in April 1986. And each time it meant an additional $1 billion in the public purse, $1 billion more from hidden, regressive and unfair taxes.
I have here a list, which could be of interest to Conservative Members, concerning increases in the excise tax on gas: for example, 2 cents a litre on September 23, 1985 generating $900 million in revenue; 1 cent a litre on January 1, 1987- $450 million; 1 cent a litre on February 19, 1987-another $450 million. And, on April Fools' Day, we will get another increase of 1 cent a litre-$300 million in revenue, for a total increase of 23 cents on a gallon of gas in Canada since they came to power.
Mr. Speaker, their avowed objective is to tax the poorer people in order to get the large sums of money they cannot or do not want to get honestly in a progressive, open and fair manner. There is also the 10 per cent tax on long distance calls and cable television services. The Hon. Minister should rise on that subject and explain how those young people ...

March 28, 1988
Excise Tax Act
I see that he is singing, he finds it funny. The young people find it funny, Mr. Speaker ... He is playing the violin ... But I say to him that the young people, like their parents, will remember this Government for taxing cable television and long distance calls.
I could perhaps read from another interesting list on this Government's costs.
We spoke about indirect taxes earlier, and we shall now deal with direct taxes, which are collected up front.
First, the de-indexation of family allowances, personal credit and income tax tables. Since January 1, 1986, the Government has relieved Canadian taxpayers of $635 million by deindexing family allowances. The Members opposite are happy about it!


Mrs. Bourgault:: We are paying for your mistakes!


Jean-Robert Gauthier: Since January 1, 1986, the elimination of the tax rebate has brought in $650 million. By eliminating the deduction for the Registered Home Ownership Plan as of May 22, 1985, the Government has taken away $125 million from Canadians. The temporary surtax of 5 to 10 per cent on high incomes from July 1 to December 31, 1986, has brought in $500 million. The general and permanent surtax of 3 per cent for all taxpayers implemented on July 1, 1986, has brought in $1.2 billion. The change in the tax system for dividends implemented on January 1, 1986, has brought the Government $300 million. The change in the spousal exemption implemented on January 1, 1986, has cost taxpayers $20 million.
Mr. Speaker, I heard one Member say: "That is nothing!" It was a Conservative Member, one of the silly ones who usually make such comments. "That is nothing!"
For him, Mr. Speaker, $1.2 billion, a general surtax of 3 per cent, on to all taxpayers is nothing.
The Hon. Member is probably wealthier than average Canadians. "That is nothing", say the Conservatives, Mr. Speaker!
This is why the public is becoming cynical as far as the Conservatives are concerned. It is because of such comments that the Government has lost all credibility.


An Hon. Member:: All credibility!


Jean-Robert Gauthier: That's right, the Government has lost all credibility, you have lost, wasted and destroyed everything in the past three and a half years. The little you had in 1984 you have now lost!


Lise Bourgault: The polls say-


Jean-Robert Gauthier: Mr. Speaker, I like to hear such comments because they keep me interested. There is nothing more useful than to have people make comments. It is interesting.
I would like to point out to those Hon. Members that Canadians will remember that this Government said: "These taxes are nothing! That is nothing!"
Maybe I should go back to my second language and say that indeed the Government's actions speak for themselves. It chose to bring in a Bill to amend the Excise Tax Act and the Excise Act for second reading just before a recess in the hope that the opposition Parties will debate and pass it quickly.
As we know, these revenue-raising items are some of the tools used by the Government to create its smoke and mirrors illusion that the deficit has indeed decreased. If it has, it has been at the expense of the average Canadian wallet. My colleagues and I would like to spend some time in drawing attention to this Bill and in telling the people of Canada how the accelerated federal tax and excise tax remittances and the manufacturers' sales tax will impact upon them.
I spoke about the illusory $29.3 billion deficit. It bears repeating that one of the ways this illusion was created was through the use of accounting tricks such as the acceleration of federal sales tax and excise tax remittances. Canadian employers who must deduct income tax, Canada Pension Plan and unemployment insurance contributions from their employees and remit those amounts to the Government have been required to do this with greater frequency since 1987. In January, 1987, employers had been remitting once a month. They then had to start remitting twice a month, increasing the paperwork and workload of their operations. This gave the Government a one time increase in revenue of $1.6 billion. Then the Government told the employers to remit deductions weekly, resulting in another increase in revenue for the Government.
Due to the fact that pay-roll deductions based on new tax rates will not begin until July, 1988, the Government has given itself a six-month interest-free loan for this year of about $1 billion, because employers will still be remitting at the old rates between January 1 and July, 1988.
I want to now address the changes related to the manufacturers' sales tax, dubbed the silent killer of jobs by the Minister of Finance (Mr. Wilson) himself. Between October 1, 1984, and April 1, 1986, this tax increased from 9 per cent to 12 per cent. This resulted, as I said previously, in a $3 billion gain for the Government. Manufacturers, too, are required to remit this tax earlier, sometimes even before they have collected it through sales. The Government continues to tinker with this tax, apply it to more goods, broaden the base, and increase the rate, and evidently this will continue because the national sales tax that the Government was going to replace it
March 28, 1988

with will not be presented before the next election, or the next two elections if the Conservatives, I hope, do not return to power.
The Government said in 1984 that it would not increase taxes, but it has done so.


The Acting Speaker (Mr. Paproski):: I regret to interrupt the Hon. Member but his time has expired. There are questions and comments to follow.
Questions or comments? Debate.


John Edmund Parry: Mr. Speaker, I am glad to have the opportunity to address some comments to the Government's Bill to amend the Excise Tax Act and the Excise Act. What we have before us is a pot-pourri of partial measures, quick fixes, limited claw backs, but above all revenue-raising measures which the Government has now put together in one vast portmanteau of legislation.
We are today examining changes arising out of the Budgets of February 18, 1987; February 10, 1988; the June 18th, 1987 White Paper on tax reform; and the December 16 tax reform paper. It is important to state the context in which the Government, rather than introducing measures and policy changes in an orderly fashion and getting them passed in legislation, is saving them up for this sort of Bill where so many changes come at one time that it is almost impossible for opposition speakers to isolate effectively the individual measures to measure their effect on the over-all tax system and tax yield, and of course to critique them effectively. However, that is perhaps what the tax happy Torquemadas, the excise extortioners of the Tory Ministry of Finance, want to see.
I am somewhat reminded of the petition given to James VI after he became James I of England in which it was stated that monopolies sit in our seats, sleep in our beds, sup in our cups. Thus it is with these excise taxes with their pervasive and deleterious effect throughout the Canadian economy and their distorting effect on the consumption and purchase patterns of Canadians. What we have here is not a sensible realignment of the tax system as this Bill should be. What we have is not a reform, not an overhaul, not even really a reasonable, minor maintenance program for the excise tax system. Rather, what we have is a wholesale and thorough continuation of some of the principles that even the Minister of Finance (Mr. Wilson) has seen fit to speak out against in the past.
Why is that? It is, of course, to raise revenue. It is of course for the Government's stated goal of deficit reduction, and the revenue raising capacity of some of these commodities with their, to the Tories, unlimited ability to bear additional taxes.
I am reminded of another example or paradigm from the early days of taxation. This concerns the Minister of Finance of Henry VII of England, one Morton. He was known for the instrument called Morton's Fork whereby he would visit a wealthy noble, perhaps, or merchant, and if he was seen to be living modestly and frugally, then he must have accumulated
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some reserves which Morton could dip into or appropriate for the purposes of state that his master bade him do. If this merchant or noble was seen to be living lavishly-on a Tory sort of scale, I suppose-Morton said that his consumption was excessive, that he was obviously a person of manifest and evident wealth and was therefore able to contribute handsomely to the coffers of the king.
The point that I want to make, of course, is not that taxation is carried on in that way nowadays, although the long-suffering taxpayer may often feel that this is the case, but rather that the key to understanding this is to identify whom Morton went to visit. We see some unhappy similarities between whom Morton went to visit and whom the Tories went to visit because, naturally, there were those whose position or status kept them above even Morton's attention. Similarly, there are those whose status or wealth keeps them above the attention of the Tory Minister of Finance.
It is worth-while reiterating who they are, Mr. Speaker. Above all, of course, are the corporations, the chief sponsors and, in spite of any resolutions that might be passed, the chief financiers of the Tory Party, namely, profitable corporations. Last year, 60,000 profitable corporations in Canada did not pay tax. It is partly because of the failure of the Minister of Finance to bring in tax for them that we are forced to spend the time of the House reviewing this smorgasbord of legislative measures to raise that same amount of tax by slicing and dicing the consumer and the taxpayer.
Another class which Morton did not visit and the present Government does not visit is the wealthy. Tory tax policy, as implemented in Budgets and legislation, has led to some very handsome tax breaks for the wealthiest Canadians, those who have the highest personal incomes, notwithstanding the rather feeble attempt that the Minister of Finance made to adapt the policy and the platform of the New Democratic Party by bringing in an alternative minimum tax rate.
Whom does this latter day Morton visit, Mr. Speaker? He visits the middle classes and, increasingly, he visits the poor. That is where the Government is looking to raise the revenues which it sees as essential for reduction of the deficit.
The Tories have said that the reduction in expenditures is the over-all priority, but this sort of tax mining of the middle class and, increasingly, the poor, characterizes the approach. It is like the frog in the well. They get that expenditure down one notch, but in the meantime they are bumping up the tax side of the ledger by a couple of notches.
There are some revenue-raising items in this Bill which impact very seriously on Canadians, and inequitably upon some. With regard to the 10 per cent tax on telecommunication services, my hon. colleague, the Member for Regina East (Mr. de Jong), pointed out that if you live in an isolated community a far higher percentage of your telephone calls are likely to be long distance. It seems that in some parts of the

March 28, 1988
country you do not have to phone a very great distance before you start paying long distance charges.
I would like to point out a situation which pertains to some people in my riding. Entrepreneurs, in some cases, and people who choose to live in rural areas, in other cases, are now hit with a 10 per cent federal tax on the already very high rental rates that they pay for radio telephones. If you are a tourism entrepreneur on a lake 30 miles from Red Lake with no easy road access and, of course, no telephone line, in order to do your business you need to have a radio telephone. The rates for such a telephone range between $50 and $90 a month depending on the power of the transmitter and the service provided. Some of these people are suddenly being hit with a $9 per month federal tax imposition on top of all their other expenses for what is essentially to them a local telephone service. That is an injustice which the Government should consider.
The telecommunication programming services tax, a tax on the people's entertainment in the form of cablevision, is another revenue raiser for the Government. The committee recommended a $3 limit on the telecommunications tax in order to provide a measure of equity. That is something in which the Government is really not too interested and it ignored that.
Increasing the sales tax rate on paint and wallpaper from 8 per cent to 12 per cent is quite a substantial imposition on a particular portion of the population. It will, of course, affect the sales of do-it-yourself and home decorator stores. One wonders why.
The acceleration of remittances is another concealed revenue-raising measure. Before it came to power the Government made all sorts of vaunting promises to small businessmen about reduction of paperwork, reduction of bureaucratic compliance, and reduction of red tape. It is now prepared to put those people through the hoops of filling in returns on a weekly instead of bi-weekly basis and on a bi-weekly rather than monthly basis. I am sure that that is one sector of the economy which will not forget the way in which it has been inflicted upon by the Government.
I see, in the increase in the federal sales tax on beer, spirits, wine, and tobacco products from 15 to 18 per cent, that some of my more favourite vices, and some which I truly detest, are being hit in an equal fashion. I suppose that rather than making a specific confession I should point out that the Government has quite a range of legislative measures available to it if it really wishes to control and reduce the incidence of tobacco smoking.
Another tax put in for the purpose of revenue generation is the increase in the levy on air tickets. It must be pointed out that there are some benefits in the application of that levy, particularly for small, remote and isolated communities, and that it does not impact upon aircraft with a take-off weight of over 12,500 pounds. I am glad to see that exemption continued, and for this relief we give much thanks. However, I believe that we have increasingly a picture of taxation without
representation whereby the Government continues to ignore many of the desires of the users of airports and airlines for whom, after all, it is a prime operating resource. That should be looked at very carefully.
The further increase on the excise tax on gasoline and aviation gasoline is already having distorting effects in this economy. Since the Government came to power it has increased the excise tax on gasoline no fewer than four times to the point that now one-tenth of the pump price of gasoline is made up, not of total taxes, not of total federal taxes or total provincial taxes even, but of Tory increases. Every time the average Canadian fills his or her average domestically or North American produced automobile they are paying $2 in Tory increases alone for that fill-up.
Remote areas, of course, suffer from a lack of alternatives. We must recognize that by not taxing propane and by imposing lower taxes on diesel fuel the Government does provide alternatives. However, the people who use motor vehicles the most are the people who have the least opportunity to avoid the incredible imposition of those very same taxes.
I see that it is one o'clock, Mr. Speaker. I look forward to returning at three o'clock.


The Acting Speaker (Mr. Paproski):: Before I call it one o'clock, the Hon. Member will have seven minutes left for debate plus the ten-minute question and comment period when we resume debate.
It being 1 p.m., I do now leave the Chair until 2 p.m. this day.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Mr. Keith Penner (Cochrane-Superior):: Mr. Speaker, I rise to offer a word in defence of Canada's Official Languages Commissioner, Mr. D'Iberville Fortier. He has been a strong and effective defender of the rights of Francophones outside Quebec. When one of the communities which I represent, Kapuskasing, Ontario, was locked in a struggle over official bilingualism, he was there to provide encouragement, support, and guidance. Thank you, sir, for that.
Now, because he expresses some concern for anglophone rights in Quebec, he is condemned and under attack. To all my
March 28, 1988

colleagues in the House who have participated in this unjust criticism, I say think again.
To the Premier of Quebec, and all members of his Legislature, I say shake off your hypersensitivity. You are part of a nation that stretches from sea to sea, from Vancouver Island to Newfoundland.
Our country is too vast, too magnificent, too beautiful to accommodate such pettiness in one of its parts. The criticism of one of Parliament's dedicated and devoted servants has been excessive, harsh, and entirely unnecessary.



ETHNIC AFFAIRS


[Stage Direction]
Mir. Alan Redway (York East): Mr. Speaker, this past weekend the Greek community of Metropolitan Toronto,
120,000	strong, again celebrated the anniversary of Greek independence with an exciting parade and a huge banquet.
Last year on the same occasion, Professor Steve Triantis of the University of Toronto spoke for all ethnic communities, 40 per cent of Canadians, when he said:
The leaders of all political Parties should be advised that no ethnic group in Canada holds a monopoly of excellence in brains and education. We demand full and equal participation in the political, social, cultural and economic life of this country. We shall be looking for action in particular with regards to appointments to boards and agencies.
This past weekend, a frustrating year later, he added:
The leaders of all political Parties shall be judged by their acts not by their promises. We speak out today with our voices, tomorrow with our votes.


Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, over the past 30 years Chinook salmon escapement in the lower Georgia Strait has declined from 30,000 to 4,300. For this reason I reluctantly support the 20 per cent reduction in the annual catch for all sectors of the fishing industry.
In order to reduce the over-all sports catch by 20 per cent, individual bag limits will be reduced from 20 Chinook to eight. Since 95 per cent of British Columbia's sport fishers already catch eight Chinook or less, this new policy will not hurt them. But it will hurt the charter boat industry and the tackle suppliers.
Gulf trollers will also be badly hurt by the 20 per cent reduction since it comes on top of other severe reductions since 1984. They fear that they are being squeezed right out of the industry.
Seiners worry that the Chinook reduction will cost them valuable days of fishing during heavy Pink or Sockeye runs. Indian people also face cut-backs in their traditional fishery.
Let us hope that these costly reductions, combined with enhancement, will do the job and our Chinook stocks will be restored to health.



UNEMPLOYMENT INSURANCE


Mr. Reginald Stackhouse (Scarborough West):: Mr. Speaker, a Scarborough West constituent left his company because of corporate restructuring and opened his own business, which he had to close after 18 months of effort.
Although he had paid into the Unemployment Insurance Fund for 27 years, he was informed that he was not eligible for benefits because he had not paid into the fund during 10 weeks of the previous year. However, he also learned that he would have been eligible had he been in prison for those 18 months.
I speak to the House because here is a man who tried to start a business, and was denied what he could have gained had he committed a crime. I speak of this because sometimes, as Charles Dickens reminded us, "the law is a ass" and deserves a kick.



EXTERNAL AFFAIRS


Hon. Andre Ouellet (Papineau):: Mr. Speaker, since Secretary General Mikhael Gorbatchev came to power, a new atmosphere seems to be spreading over the USSR under Glasnost. We have witnessed several dissidents being released from prison, a new freedom of the press and other reforms.
Today, I should like to call the attention of the House to a most disquieting situation which exists in that country. I am referring to the situation in the Nagorny Karabakh region. Since 1923, this region has been part of the Azerbaijan Soviet Socialist Republic. Because a great many of its inhabitants are Christian Armenians, the Nagorny Karabakh population has informed Moscow of its desire to become part of the Armenian Soviet Socialist Republic and to have its borders changed accordingly.
I need not remind Hon. Members just how the men and women of this group have suffered over the past few centuries. Too many have died already. The unification of that area should proceed under the best spirit.

March 28, 1988
Last week, we learned that the Soviet Union had taken measures to improve the situation of ethnic Armenians in Azerbaijan. We hope that under Glasnost, Mr. Gorbatchev will continue this reconciliation approach and respond positively to the will of the Armenian people.

Let there be a revolution, but let it be a revolution of the heart, of the Afrikaaner heart, so that the violence accumulating in the hearts of the victims of apartheid might be transformed into energy for a new multiracial and democratic South Africa. Otherwise, it may indeed come to be the case that the South African Government will have sown the wind and reaped the whirlwind, and it will have no one but itself to blame.



FINANCE


[Stage Direction]
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Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, financial services, a few years ago only available in New York, London or Hong Kong, are now an integral part of the Canadian money market. A case in point is the domestic market for interest rate swaps which has grown to about $20 billion a year.
This year, for the first time, the Government of Canada has entered the domestic market. Although to date only a few hundred million dollars of swaps have been involved, this is an interesting development which will add depth and maturity to the market. At the same time, it marginally reduces interest rates on certain government borrowings, a savings for the Canadian taxpayer.



APARTHEID


Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, on Friday we witnessed the pathetic spectacle of the South African Ambassador to Canada trying to deflect criticism of an indefensible regime by claiming that Canada appears to back those who seek the violent overthrow of the South African Government. The fact is that all Canadians hope for a peaceful transition of power in South Africa. It is the Government of South Africa that does not.
Instead of encouraging meaningful dialogue between whites and blacks in South Africa in order to achieve majority rule in that country, the South African Government has banned black opposition groups, imposed media censorship, and has crushed any efforts to demonstrate against the evils of apartheid. Church people are arrested while neo-Nazis march in the streets with complete freedom.
It is not Canada that is encouraging violent revolution in South Africa but rather the repressive and uncompromising policies of the South African Government.



MEETING OF QUEBEC WING

Mr. Gilles Bernier (Beauce):: Mr. Speaker, the Quebec wing of the Progressive Conservative Party of Canada held its annual meeting in Montreal during the week-end. It was a real success. Our leader, Mr. Mulroney, sounded out his Quebec team. Over 200 fundamental resolutions and positions were drafted by the members and by the people, reflecting Quebec voters' daily concerns.
Mr. Speaker, those resolutions were first drawn up in 10 regional symposiums held throughout Quebec during the past six months. When members of the Conservative Party state their views, they are taken into consideration. They guide decisions taken by the Government. It was a genuine democratic exercise. The Quebec Conservatives have taken an important step toward cleaning up political practices when they adopted the principle of party financing by the people, something about which the Liberals are not happy.
Resolutions on the environment, reform or abolition of the Senate, regional development, agriculture and its renewal, the ageing population, etc, were analyzed. In short, serious discussions, Mr. Speaker. This is how the Conservative party listens. To the organizers, I say well done!



EXPROPRIATIONS


Lise Bourgault: Mr. Speaker, March 27 is a memorable date in Mirabel. On March 27, 1969, the Liberal Government expropriated 97,000 acres of land to establish the Mirabel airport. From that moment was initiated the greatest litigation in the history of Quebec. The expropriated land owners regrouped in the CIAC in order to win back their lands that were unjustly acquired and not needed for the airport. On March 27, 1985, a sixteen-year struggle came to an end; the Conservative Government did justice to the
March 28, 1988

expropriated and signed an historic agreement that terminated that social disorder.
Yesterday, on March 27, 1988, in Sainte-Scholastique, that matter was closed and Mr. Jean-Paul Raymond released La Memoire de Mirabel, a book he hopes will prevent the repitition of such disasters.
Mr. Speaker, we must pay tribute to the people of Mirabel and their patriarch, Mr. Jean-Paul Raymond, for having shown that tenacious convictions can make one victorious in just causes. I invite all Hon. Members to buy that emotive testimony of solidarity whose language, as the bishop of Trois-Rivieres said, is as straight as a furrow, as savoury as maple syrup and as direct as the cut of an axe.



FISHERIES


Hon. William Rompkey (Grand Falls-White Bay- Labrador):: Mr. Speaker, today the Minister of Fisheries and Oceans (Mr. Siddon) is in Corner Brook, Newfoundland. If he is watching this telecast I want to ask him to take this opportunity to reverse the decision that he made to deny the Labrador Shrimp Company access to northern cod. As a result of that decision the fish plant in Cartwright has been closed, laying off 50 people. In a community of 500 where the plant is the economic backbone of the community there is no alternative.
I ask the Minister now to adopt the policy that those who are closest to the resource have primary access to it, and to grant the Labrador Shrimp Company access to northern cod so that small fish plants can remain open.



SHIPBUILDING


Mr. Joe Reid (St. Catharines):: Mr. Speaker, Canadian Shipbuilding and Engineering Limited, a consortium of shipyards based in St. Catharines, has made a proposal to the Government which the Government cannot ignore. It was a design and build proposal for 12 minesweeper patrol vessels so badly needed to protect our two ice-free coasts.
CS&E has a full-time design team already at work on the project. It has technological experience in place. Five yards
from coast to coast are involved. By sharing the work shipbuilders across the country will benefit. Construction could begin in six months.
To tender and delay the awarding of this contract could mean that other yards will suffer the same fate as Port Weller Dry Docks which, with the lay-offs of last week, leaves only 12 maintenance men in place.
I call upon the Government to grant this contract now to CS&E Limited. It has already done the groundwork, and it is its turn. To delay will simply cost the taxpayers more in the long run.



ENVIRONMENTAL AFFAIRS


Ms. Lynn McDonald (Broadview-Greenwood):: Mr. Speaker, a number of Alberta environmentalists met last Saturday with members of the New Democratic caucus in Edmonton to consider how to make sustainable development a reality, especially in agriculture.
A major concern raised at that conference was the Oldman River and the Alberta Government's plan to dam it at enormous cost for little benefit, all the while refusing public involvement and environmental assessment.
The federal Government has two reasons to be involved. For native people the Oldman dam would mean "the single most devastating project in the history of Alberta in terms of destroying prehistoric sites and historic buildings".
Environmentalists have asked the federal Government to consider the impact on sport fishing, which is excellent in that area. The federal Government has the jurisdiction to conduct an environmental assessment. So far it has refused to do so.
I call on the Minister of Indian Affairs (Mr. McKnight) and the Minister of the Environment (Mr. McMillan) to take the actions they can to stop this devastating assault on the environment.



NATIONAL PAROLE BOARD


Mr. John Oostrom (Willowdale):: Mr. Speaker, law enforcement agencies are irate over the possible granting of early parole to mobsters presently serving time for committing various capital offences. These extremely dangerous individuals are gaining early parole for good behaviour even before serving two-thirds of their sentences. This is an absurd situation.

March 28, 1988
Oral Questions
For example, one individual who is serving 15 years for arson and bombings also plotted a murder while still in prison. He received an additional 12 years and is now eligible for early parole for good behaviour.
It is clear that the parole board must receive new guidelines to deal with these underworld crime lords. Our law enforcement agencies must be given effective tools to protect society from this filth.
Justice must be done, not seen to be done, and all those who commit capital offences must serve all their time.



SPECIAL CANADIAN GRAINS PROGRAM


Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, the Special Canadian Grains Program of the Department of Agriculture was set up to compensate Canadian farmers for their losses suffered as a result of the U.S. Farm Bill. The farmers who had seen their income drastically reduced were anxiously awaiting their cheques.
There was good news for some farmers, particularly those prairie farmers who were paid in February. I am really happy that they did manage to get their money. However, Ontario and Quebec corn producers will not be paid before the end of April. This situation is totally intolerable.
What it means for the Ontario grower in my riding is further losses. Those farmers will miss out on traditional discounts on purchases of products which are usually offered during the month of March. In some areas this will mean extra money to be reimbursed on loans that are now late for repayment because of this delay.
I urge the Minister of Agriculture (Mr. Wise) to use his powers to accelerate the payments to Ontario grain producers. Those farmers have suffered enough under this Tory administration.
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SPACE AGENCY

[Stage Direction]
A SPATIAL CAPITAL!
Jean-Robert Gauthier: On March 23, the media reported that 160 highly specialized engineers would soon come to Ottawa to work for the Canadian Space Agency. The president of the National Research Council confirmed that 70 experts were already working on the orbital
station project within that organization and that that number would soon rise to 120.
It would be a disgrace to let these people settle in the National Capital Region and then force them to move with their families to Montreal or some place else in order to comply with some Tory electoral agenda.
The Government must have the courage to confirm once and for all that the space agency will be in the National Capital. I say it loud and clear: the Government is already setting up that agency little by little. The National Capital Region is spatial, but it is also very special.
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*



IMPORTS OF BROILER HATCHING EGGS AND CHICKS

Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, nobody likes the thought of gassing day-old baby chicks. What is not cute either is the flood of surplus American hatching eggs and chicks which are displacing domestic production.
Six years ago those imports amounted to 12 per cent of our needs. They will be double this year. This is hurting Canada's $2.5 billion chicken industry of which $100 million is our broiler hatching egg industry.
A national agency was proclaimed in November, 1986, but producers have not been able to get the Government to agree to border controls, very necessary underpinnings to supply management.
I call upon the Minister for International Trade (Miss Carney) to place broiler hatching eggs and chicks on the import control list to avoid further damage to this fledgling Canadian industry.



ORAL QUESTION PERIOD


[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, my question is directed to the Acting Prime Minister. Under the Official Languages Act, the Commissioner of Official Languages has the power and duty to comment on the status of the official languages in Canada. In fact, he has been doing that in his reports for many years.
While we might not have used the same language as the Commissioner in his recent report, on the other hand we must recognize that his report was balanced and he criticized
March 28, 1988
[Stage Direction]
language violations in all parts of the country. We might not always like what the Commissioner states, but we have never questioned his right to report freely. In this respect, he is like the Auditor General.
I wish to ask the Acting Prime Minister if, in these circumstances, the resolution passed by Quebec Conservatives on the weekend is in accord with government policy? Further, does the Government agree with some of its members that the Commissioner should resign?
Donald Frank Mazankowski: Mr. Speaker, first I think the Hon. Member would agree that the Language Commissioner is not an officer of the Government. He is an officer of Parliament. He is independent and should be treated with independence.
Insofar as the alleged offensive words that have been used are concerned, the Commissioner himself has recognized that perhaps he could have chosen words that were less provocative. I think he has recognized that, and for that he has apologized. Perhaps it should be considered within the context of the various mechanisms that we have in this Chamber. There is a special language committee of Parliament, which is a joint committee. Currently hearings are being conducted with respect to Bill C-72. I understand that the Commissioner will be appearing before that committee. There are also Estimates which have been referred to the respective committees.
There are various ways in which an elaboration of the points the Commissioner has made in his report can be elicited by all Hon. Members. I would suggest that that would be the best vehicle and mechanism to seek that clarification.
[ Translation]


COMMISSIONER'S FREEDOM OF EXPRESSION-GOVERNMENT POSITION
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, while the Commissioner reported on the situation of English-speaking Quebecers, he also expressed dismay about the case of Mr. Piquette, MLA, and the rights of French-speaking Albertans. If it is considered as a whole, his report can be seen as well balanced.
My question is this: Is the Government ready to support and defend the freedom of expresssion the Official Languages Commissioner needs to go on with his job?
Donald Frank Mazankowski: Mr. Speaker, I think we have to take the Commissioner at his word. He has acknowledged the fact that perhaps he could have used less provocative language. In his press release he has said that while he may have pointed out his view in a
Oral Questions
rather blunt manner, he did not, despite certain interpretations, condemn the Government of Quebec in his report. On the contrary, he credited the Government with a number of positive initiatives and expressed his confidence in its ability to reduce present language tensions in Quebec.
Having made that clarification, and with all Members having the opportunity to cross-examine the Commissioner before the respective committees of Parliament, it seems to me that if any further elaboration is required that is the place to seek it.


BILL C-72-POSITION OF MEMBERS
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, if the Conservative Party wants to censure those who really oppose bilingualism and minority language rights, why does it not condemn and demand the resignation of those Conservative MPs who oppose Bill C-72?
Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


Mr. Speaker:: The Hon. Deputy Prime Minister may choose to answer that question, but I point out that the question is an allegation which goes to the motivation of Hon. Members and is completely improper.


Donald Frank Mazankowski: Mr. Speaker, if the Hon. Member wants to degrade this very sensitive issue into a partisan issue, then he is certainly going the right way.
Quite frankly, if he wants to condemn the Conservative Party, there are certain members of the Liberal Party in the Province of Quebec who voted to censure the Commissioner of Official Languages.
If he wants to talk about Bill C-72, maybe he might want to explain why the Liberal Opposition wanted to filibuster it at second reading when we were prepared to put it through.


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


Jean-Robert Gauthier: We could set the record straight on that last assertion.


USE OF FRENCH IN COURTS
Jean-Robert Gauthier: Mr. Speaker, the language used by the Commissioner in his comments on the linguistic situation in Quebec was certainly not judicious.
The report of the Official Languages Commissioner is a well balanced one, in which 95 per cent of the comments are about the francophone diaspora, that is those who live outside Quebec like myself but still use French in everyday life. Only

March 28, 1988
Oral Questions
three provinces out of ten have education programs in the minority official language under Section 23 of the Constitution. There are still three provinces where it is impossible to have a criminal trial in French, according to the most elementary principles of justice. What does the Government intend to do to remedy this situation, where you have to beg permission to speak your mother tongue in a legislative assembly, which is quite humiliating. What is the Government going to do to convince the six remaining provinces to abide by Section 23? What does he have in mind to protect our right to be judged in French in the three provinces that do not provide French in courts?


Donald Frank Mazankowski: Mr. Speaker, if the Hon. Member wants to quote selectively from the report of the Official Languages Commissioner, perhaps I could do the same thing.
He has been very complimentary about a number of initiatives this Government has undertaken. He starts in Part I by saying the following:
The introduction to the proposed Canada-United States trade agreement offers the prospect of a "richer Canada-which can afford to enhance the quality of life through and for Canada's cultural endeavours."
The Meech Lake accord, Bill C-72, a Multiculturalism Bill and possible new laws and policies on communications, broadcasting, citizenship and immigration convey some idea of what those cultural endeavours comprise and of the cost of maintaining Canada's distinctiveness.
Those are all initiatives which have been taken by this Government, and I think he is very complimentary in stating that.


REQUEST THAT DEPUTY PRIME MINISTER CONTACT SASKATCHEWAN PREMIER
Jean-Robert Gauthier: Mr. Speaker, we are still waiting for an answer.
I want to ask the Deputy Prime Minister what he intends to do. What do he and his Government intend to do to encourage, urge and if necessary pressure certain provinces to recognize the Canadian reality, the linguistic duality of Meech Lake? What does he intend to do to ensure that Canadians, wherever they happen to be in this country, are entitled to two fundamental services, education and justice, in their own language?
Is he prepared to invite the Premier of Saskatchewan and ask him, face to face, to take concrete action? A month ago, on February 25, the Supreme Court ruled that Section 110 applied to Saskatchewan. Not a word since then. The Legislative Assembly has been sitting in Saskatchewan since February 21, but not a word, not in the throne speech or anywhere else, about this matter...


Mr. Speaker:: I am sorry, but I must ask the Hon. Member to put his question.


Jean-Robert Gauthier: Does the Deputy Prime Minister intend to invite Premier Devine and talk to him and persuade him to do something in Saskatchewan? Will he bring him here to Ottawa to rap his knuckles and tell him to move, and move fast?


Donald Frank Mazankowski: Mr. Speaker, the Hon. Member being a member of the Liberal Party would always choose the option of confronting rather than co-operating. I think that in the course of this Government's initiative toward national reconciliation much has been gained in terms of bringing the country together and healing the wounds of the nation which were so bad during the course of the previous five years.
The Hon. Member talks about the Premier of Saskatchewan and mentions the Premier of Alberta. These two Premiers signed the Meech Lake Accord and all that goes with it. I think that is the best measure of confidence in the future of Canada and of preserving the duality of the two official languages in Canada.


CANADA ELECTIONS ACT
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is for the Deputy Prime Minister. He will know that the federal wing of his Party met in Quebec on the weekend, during which time they discussed the federal Election Expenses Act. During the so-called Masse affair, a very substantial loophole was discovered in the existing law permitting a Party to avoid dealing with any serious limits on election spending because of the distinction that has been made between so-called campaign expenses on the one hand and election expenses on the other.
Since both opposition Parties have called for this to be dealt with promptly before the next election is held, will the Government demonstrate its good faith and its commitment to this legislation by making sure that it is dealt with promptly before the next election?


Donald Frank Mazankowski: Mr. Speaker, if the Leader of the New Democratic Party is so sure that that is the position of his Party, I wish he would talk to his members. We brought the Bill forth for debate with the hope of moving it into committee where we could discuss-


John Edward Broadbent: What Bill?
March 28, 1988


Donald Frank Mazankowski: The Election Expenses Bill.


Mr. Angus:: There is nothing in that Bill to do that.


Donald Frank Mazankowski: That is right, there is nothing in the Bill. We have entered into discussions with the opposition Parties. We are prepared to move this into committee so that we could discuss this very important issue. We think that, because there is a Bill before the House, with all-Party agreement we would be able to incorporate a new provision, and we had indicated our intention to do so providing we could get the support of the two opposition Parties. They chose to filibuster rather than to move the Bill ahead into committee.


REQUEST FOR GOVERNMENT ACTION
John Edward Broadbent: Mr. Speaker, 1 do not want to challenge the good faith of the Deputy Prime Minister on this issue because it is important, but my information was very different. If he is now saying that his Party is willing to deal with that matter on a priority basis before the next election, then, as I have already indicated, it is certainly our view that it ought to be dealt with. My understanding is that that is the view of the Official Opposition as well.

During the same Conservative Party Convention in Quebec, they also discussed contributions to political parties. I raised the question three times here in the House in the last twelve months, and I suggested we should have a decision on this issue before the next election campaign.
My question is directed to the Deputy Prime Minister on this subject as well. To show its political will, would the Government immediately refer the subject to committee for action, before the next federal election campaign?
[DOT] (M30)


Donald Frank Mazankowski: Mr. Speaker, I know that the NDP spokesman on the Elections Act is not in the House, nor is his House Leader. However, I can assure the Hon. Member that there were discussions between the Government's Deputy House Leader and other House Leaders to move this Bill into committee so we could deal with the issue of segregation of election expenses and campaign expenses. It is true it was not incorporated in the Bill because it came to light during the course of committee hearings involving the Minister of Energy, Mines and Resources. However, we are prepared to do that.
With respect to the other item, if we can move this Bill into committee this is clearly another matter that could conceivably be considered. Certainly we have no problem with that. We thought it would be most appropriate because there are some very important matters in the Bill currently before the House that need to be moved on, and if we can incorporate the other provisions we would be prepared to do so.
Oral Questions



John Edward Broadbent: Mr. Speaker, as the Deputy Prime Minister knows, the resolution passed by the Quebec wing of his Party did not obligate the Party at the national level or the Government in any way.
I have asked three times in the past year that all questions concerning the financing of political Parties be referred for action before the next election, with no predisposition to a conclusion. As well, two cabinet Ministers from Quebec have already made contradictory statements with respect to that Party's resolution. Therefore, will the Deputy Prime Minister commit himself to act on this before the next election instead of supporting something outside the House? It can lead only to conclusions of hypocrisy if it is not dealt with in the House.


Donald Frank Mazankowski: Mr. Speaker, I will of course take that as a representation. There will be other matters considered when we get this Bill before committee. For example, we will be considering the propriety of the NDP financing municipal elections under the guise of the Elections Act.


John Edward Broadbent: That is good.


Donald Frank Mazankowski: Then we will see how far he goes.


Some Hon. Members:: Hear, hear!


AIR SAFETY
Mr. Brian Tobin (Humber-Port au Port-St. Barbe):: Mr. Speaker, my question is directed to the Minister of Transport. I have in my hand a copy of a confidential task force report on airport security presented to the Minister of Transport in May of 1986. The report, prepared in the wake of the Air-India disaster, is signed by the Director of Security for Transport Canada and says: "The task force agreed that working conditions for the majority of security screening personnel are very poor, leading to low morale and a high turnover rate, and this inevitably had an adverse effect on security."
The report was presented to the Minister two years ago. Since then nothing has changed.
What action is the Minister now prepared to take in light of recent examples of slackness in our security screening system? Is he now prepared to take airport security out of the hands of Canada's major airlines and have Transport Canada assume direct responsibility for screening of passengers and baggage at Canada's airports?

March 28, 1988
Oral Questions


Hon. John C. Crosbie (Minister of Transport):: Mr. Speaker, there was a task force report which I referred to here last week and which was acted upon. There were nine major improvements instituted as a result of that report. I outlined to the House how in excess of $60 million in additional funds have been spent improving airport security. Last September we instituted a screening procedure with respect to security areas in airports. All of this, of course, met with the opposition of the NDP and the unions they represent who have been kicking and screaming all the way.
With respect to the question of whether or not we are prepared to take over the screening of passengers at airports, as the hon. gentleman knows, I have summoned the presidents of the major airlines to meet with me to review that situation and see what they are prepared to do to improve the service. The Hon. Member's suggestion is a possibility or option which is being considered.


LIABILITY INSURANCE NEEDED BY SECURITY FORMS
Brian Vincent Tobin: Mr. Speaker, I thank the Minister for his answer.
The task force report also identified as a major concern the problem of liability insurance for security companies. Since that time, Pinkerton's, the biggest security agency in the world, and Burns, have withdrawn from airport security.
Can the Minister confirm for the House and Canadians generally the fact that, as a result of the near impossibility of getting adequate liability insurance in the wake of the Air-India disaster, if another disaster were to occur today those companies still engaged in airport security work would be forced to declare bankruptcy because they do not have the liability insurance they require, and those who suffer injury or loss of life would be unable to seek financial redress under this system? Can the Minister confirm that?


John Carnell Crosbie: Mr. Speaker, I am not going to confirm some hoked up, hypothetical question about what might happen if there were another disaster, God forbid, of the Air-India type, and what would happen to the insurance requirements of certain unnamed firms-


Brian Vincent Tobin: They do not have insurance.


John Carnell Crosbie: -or whether they have insurance or not.


Brian Vincent Tobin: They have to have insurance.


John Carnell Crosbie: This is one of the silliest questions I have heard. I cannot be expected to take this question seriously. If the hon. gentleman was serious he might have given notice so that the matter could be looked into first, instead of continuing with his attempt at sensationalism, which is contrary to the interests of the industry.


NATIONAL REVENUE
Ms. Audrey McLaughlin (Yukon):: Mr. Speaker, my question is directed to the Minister of National Revenue. As he knows, the northern tax benefits for housing and travel are extremely important to northerners to offset their high cost of living. However, I can tell him that the number of pot-holes in the administration of this program are as large as those on the Alaska Highway.
Northern benefits guides and forms were not even out until late February. Now, contrary to Section 205 and Section 209 of the Income Tax Act, northern federal civil servants have not received their correct T4 slips as required by the end of February. If the Government cannot follow its own rules, how can taxpayers do so?
What is the Government doing to ensure that northerners all across Canada get the corrected T4 slips?


Hon. Elmer M. MacKay (Minister of National Revenue):: Mr. Speaker, the Hon. Member raises a very timely question. The answer is as follows.
In this case she is referring mostly to Treasury Board since we are talking about federal civil servants. If there are errors or omissions in the T4 slips, then every employer has the responsibility to amend them and notify all concerned, particularly the employees in our Department, as soon as possible. I have had a word with my colleague, the Deputy Prime Minister. We are aware of the problem and we are going to see what we can do to correct it.


INCOME TAX RETURNS-REQUEST FOR EXTENSION OF FILING DEADLINE
Audrey Marlene McLaughlin: Mr. Speaker, will the Minister extend the date for filing returns for these people if they do not receive the T4 slips immediately? In that way they will not be penalized and will not have to pay interest if they owe money and file late. As well, those expecting a refund will get interest because they have not been able to file at the proper time. If so, when will this be done?


Elmer MacIntosh MacKay: Mr. Speaker, it is the policy of our Department that if the Government contributes to the difficulty of a taxpayer we make redress.
March 28, 1988


PRESENCE IN GALLERY OF PRESIDENT OF CANADIAN CANCER SOCIETY
Mr. Speaker:: I wish to draw to Members' attention the presence in our gallery of Dr. Gweneth Ballantine, President of the Canadian Cancer Society, and her executive, with a special guest, Mr. Steven Fonyo.


Some Hon. Members:: Hear, hear!


UNEMPLOYMENT INSURANCE
Hon. Lloyd Axworthy (Winnipeg-Fort Garry):: Mr. Speaker, I have a question for the Minister of Employment and Immigration. When the amendments were introduced to the Unemployment Insurance Act dealing with severance benefits the Minister was careful to assure the House that all laid-off workers would be given exactly the same treatment.
Is the Minister aware that in the lay-off of 350 workers at the Canada Packers plant on Friday there was a major distinction between salaried workers, who have privileges to receive their UI benefits early, and hourly workers, who must wait several months before they will be eligible?
In light of that inequity will the Minister take steps now to ensure that the hourly workers at the Canada Packers plant, and other workers affected by the same situation, will not be treated in this unfair way and will be able to get their severance and UI benefits on a basis equal to that of all other workers?


Hon. Benoit Bouchard (Minister of Employment and Immigration):: Mr. Speaker, it is the first I hear about this. I shall take the question as notice and check to see whether or not the Hon. Member is right. If anything can be done, we shall take immediate action.


Lloyd Axworthy: Mr. Speaker, I thank the Minister for responding. I hope that will be done in an expeditious way because the workers have in fact been laid off.


PROGRAM TO ASSIST OLDER WORKERS
Lloyd Axworthy: Mr. Speaker, my supplementary question is for the same Minister. His colleague, the Minister of Labour, was quoted as saying on the weekend that they are near to making an agreement on a major program to assist older workers. The Minister is aware that the Government cancelled the Labour Adjustment Program which would have provided assistance to older workers.
Oral Questions
Since many older workers, including some at the Canada Packers plants, are now being left without benefits, can we get a guarantee from the Government that any proposal will grandfather benefits for older workers who were laid off during the interim between the cancellation of the Labour Adjustment Program and the introduction of the new legislation?


Benoît Bouchard: Mr. Speaker, I would like to say first that the program was not cancelled. We were at the end of the program.
With regard to the other part of the question, the Minister of Labour is working at the present time toward an agreement with the 10 provinces on the new program for older workers. The Government has always been concerned about the relationship with the provinces and, unlike the former Government, it will continue to work with the provinces.


CANADIAN NATIONAL RAILWAYS
Mr. Jack Harris (St. John's East):: Mr. Speaker, my question is for the Minister of Transport and is with regard to the CN shops at Moncton. CN's decision to shut the rail and shop operation at Moncton at a cost of 1,200 jobs was based on studies which supposedly show how much CN could save by closing down the operation.
Since these studies were done an arbitration award has confirmed contract rights for employees which will mean that by September, when the operation is finally shut down, CN will still have to pay over $10 million a year-full pay-for up to 300 workers to stay home and do nothing until retirement.
Will the Minister instruct CN to make these so-called rationalization studies available to the employees and to the Transport Committee or, if the Minister has the studies himself, will he make those studies known to all of us?


John Carnell Crosbie: Mr. Speaker, this matter has, of course, been discussed in the House many times. It is regrettable that CN had to take a decision to close the Moncton shops.


Mr. Rodriguez:: You let them.


John Carnell Crosbie: However, life changes-


John R. Rodriguez: And so will the Government.


John Carnell Crosbie: -as the railway industry has changed, and it was in the economic interests of CN, unfortunately, to close those shops.

March 28, 1988
Oral Questions
CN's studies show quite clearly that it will make considerable savings as a result of the decision to close these shops. CN has, I suppose, the most generous compensation system in the world, or certainly in Canada, which applies in these situations. There will be very considerable compensation for the employees who are affected.


ECONOMICS OF CLOSURE
Jack Harris: Mr. Speaker, those studies were done before the confirmation of the arbitration decision that the CN will have to pay these workers. How can it be sensible for CN to pay 300 people to do nothing and have the work done elsewhere and pay for it there?
Why will the Minister not try to talk some economic sense into CN management and convince them to consolidate their operations, keep the shops open, and provide some job security for the workers who are there?


John Carnell Crosbie: Apparently, Mr. Speaker, the Hon. Member is complaining that CN has this extremely generous employment security plan. If you work for CN for eight years and your job is lost, CN will either ensure that you get a comparable job elsewhere, if one exists, or pay you your salary until you become pensionable. It is a very generous scheme.
Despite that, the facts remain and the figures show quite conclusively that it is most economic for CN, in view of the fact that it does not have enough work to support all of the main shops which it had in operation, to close the Moncton shops. The provision for the employees affected has been most generous.
Of course there was an opportunity for other employment to be provided in those shops. CN came forward with a plan to establish a manufacturing enterprise there but it was not accepted by certain of the unions involved, the co-operation of which was requested.


NATIONAL DEFENCE
Bill Rompkey: Mr. Speaker, in the absence of the Minister of National Defence my question is for the Deputy Prime Minister. Recently General Theriault, a respected Canadian soldier and former Chief of Defence Staff, called the policy to create a nuclear submarine fleet, as a lot of defence analysts are saying, "an unaffordable extravagance".
In view of the mounting criticism of that policy is it not time for the Government to admit that the policy to create a nuclear submarine fleet has been blown out of the water? Is it not time
to take that money and put it into the real, meaningful defence of Canada?


Hon. Harvie Andre (Minister of Consumer and Corporate Affairs):: Mr. Speaker, General Theriault also said, I understand, that nuclear powered submarines are an excellent weapons system and that the acquisition will greatly enhance Canada's maritime defence capability. Of course, that is precisely what we have in mind.
As the Hon. Member knows, after years and years of neglect our maritime capability is not up to the required standards. We have over 5,000 miles of coastline; we have three oceans. With the acquisition of these nuclear submarines we will have the capability of operating in all three oceans for the first time. That is going to contribute to Canada's defence and Canada's sovereignty. The Government remains committed to its decision.


Bill Rompkey: Mr. Speaker, if we had enough money we could do anything, including having a decent Post Office which we do not have. The point is that the General said that it is an unaffordable extravagance. That is the situation.


COST OF ACQUISITION
Bill Rompkey: Mr. Speaker, in view of the fact that the people of Canada do not want it and we do not want it, why does the Government not listen to the people of Canada and put that money into creating more jobs for Canadians by increasing the complement of the Armed Forces? Why not that policy?
Hon. Harvie Andre (Minister of Consumer and Corporate
Affairs): Mr. Speaker, is the Hon. Member suggesting that we should deliver the mail by submarine?


Bill Rompkey: It will go just as fast.


Harvie Andre: After years of neglect I am pleased to be able to say that the Post Office will be turning a profit this year.
Every defence analyst who has looked at our situation has recognized that the most serious need for the Canadian military has been updated and modernized equipment. We have three very old diesel submarines and nothing else.
The Hon. Member says that we should expand the manpower, but one needs the equipment for the personnel to use. What good does it do to have more sailors if we have nothing for them to sail on?


IMMIGRATION
Mr. Dan Heap (Spadina):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration. As
March 28, 1988

the Minister knows, before July, 1986, refugee claimants were given generic work permits following their first inquiry when they indicated their decision to claim refugee status. Since then the Government has made it impossible for these people to work until after their statement under oath has been taken. As a result there are now about 7,000 refugee families in Metro Toronto waiting a minimum of eight months each, at a welfare cost of $500 per month.
Will the Minister restore to the refugee claimants permission to work as soon as they have had their initial inquiries so that they can regain their self respect by supporting themselves?


Benoît Bouchard: Mr. Speaker, the current backlog, which is now nearly 50,000 people as I was informed this morning, has reached such a level that it would be much more difficult today to apply the policy which was in effect when there was only a backlog of a few hundred or thousand people. I believe that the best thing to do would be to allow us to take care of this backlog, and the Hon. Member knows exactly what he has to do in that regard.


Mr. Speaker:: The Hon. Member for Spadina on a short supplementary.


REQUEST THAT PROVISIONAL PERMITS BE ISSUED
Daniel James Macdonnell Heap: Mr. Speaker, the Minister knows that many of the delays are caused by the Department's scheduling problems. Therefore, if he is withholding the work permits as claimed in order to pressure people to make their statements, why not follow the advice of the Bar Association a year and a half ago and make the permits subject to revocation if there is undue delay? Let them support themselves.


Benoît Bouchard: Mr. Speaker, I would like to understand the coherence of a policy which gives a permit and revokes the permit if they are not refugees. The fact of the matter is that those persons have claimed refugee status. There are 50,000 in this country. It is unacceptable for all Canadians.
I believe that my hon. friend is honest enough to understand that, as long as we do not have what is needed. He knows very well that if the policy just on the other side of the wall is released, that will be the best answer for all refugee claimants in this country.
Oral Questions


ADMINISTRATION OF JUSTICE
Mrs. Lucie Pepin (Outremont):: Mr. Speaker, my question is for the Minister of Justice. Last month, I asked the Minister whether he would agree to federal-provincial action with a view to reducing family violence. Within the last six months, three women have been killed by their husband or spouse. A federal-provincial meeting of Justice Ministers was held on March 16, 17 and 18. I would like the Minister to tell us what came out of that meeting and what conclusions the Ministers reach concerning this issue.


Hon. Ray Hnatyshyn (Minister of Justice and Attorney General of Canada):: Mr. Speaker, I appreciate the question from the Hon. Member. I want to report to her and Members of the House that the federal-provincial meeting held in Saskatchewan on March 17 and March 18 was directed towards some specific topics. We are meeting again at the federal-provincial level in Quebec on May 26 and May 27, at which time there will be an opportunity for more extensive discussions on a number of topics.
I should tell the Hon. Member that in connection with the particular representation she has made on the matter of family violence, my colleague, the Minister of National Health and Welfare, and I have been working closely together with respect to a federal response.
As far as my responsibility for the criminal law is concerned, I am working with my provincial counterparts to look at areas of the Criminal Code which require reform to make sure that we can improve the law. This particular area is certainly one that our Department is considering.


Mr. Speaker:: The Hon. Member for Outremont on a very short supplementary, please.


REQUEST THAT SUBJECT BE PLACED ON AGENDA FOR NEXT MEETING
Lucie Pépin: I simply want to remind the Minister that, on February 29, he promised this House that this matter would be on the agenda. I would like the Minister to assure us that the issue will definitely be discussed at the next meeting in May.


Ramon John Hnatyshyn: Mr. Speaker, I think the Hon. Member is fully conversant with the complexities of this issue. The question of family violence is not something that should be dealt with solely and exclusively by the criminal law.

March 28, 1988
Oral Questions
I think there must be a co-ordinated approach to this matter. I believe she would probably join with me in this particular effort.
We are dealing with amendments to the Criminal Code on a federal-provincial basis. It so happens that the federal-provincial meeting will take place on May 27 and May 28 in Quebec City, Quebec, Canada.


UNEMPLOYMENT INSURANCE
John R. Rodriguez: Mr. Speaker, my question is directed to the Minister of Employment and Immigration. It deals specifically with the Supreme Court of Canada decision last week.
In a case where there was an industrial dispute in the workplace and workers who belonged to the same international union but a different local were laid off, the Supreme Court of Canada ruled that they should be entitled to collect unemployment insurance benefits even though union dues go to the central fund to support strikes, or to support disputes.


An Hon. Member:: You were right the first time.


Some Hon. Members:: Oh, oh!


John R. Rodriguez: Does the Minister intend to bring in amendments to Section 44 of the Unemployment Insurance Act to make it consistent with the ruling of the Supreme Court of Canada?


Benoît Bouchard: Mr. Speaker, we are now considering the legal implications of the Supreme Court ruling. I should think that in due course, before suggesting that the Unemployment Insurance Act might be amended-I realize my colleague likes that a lot, we have just done that recently-before starting over again I think we will try to find out exactly what the decision might entail.


Mr. Speaker:: Of course, I will recognize the Hon. Member for a supplementary question. There are a number of other Hon. Members who wish to be heard. I ask that the supple-mentaries be short.


REQUEST THAT STATUTE BE AMENDED
John R. Rodriguez: Thank you, Mr. Speaker. I will be short as usual.


Some Hon. Members:: Oh, oh!


An Hon. Member:: You don't have any choice.


John R. Rodriguez: I am standing, Mr. Speaker.


Mr. Speaker:: I assure the Hon. Member that I would believe him, where others may not.


Some Hon. Members:: Oh, oh!


John R. Rodriguez: It is good to know that I have a Speaker who has faith in me.
My supplementary question is directed to the same Minister. The Supreme Court decision is consistent with recommendations made by the Standing Committee on Employment and Immigration late last year regarding the whole question of Section 44 as it applies to locked out workers, maternity benefits, which are now paternity and adoptive benefits, for workers who are laid off because of an industrial dispute in the workplace.
When the Minister is considering amending Section 44, will he consider bringing those other aspects of Section 44 in line with the decision of the Supreme Court?


Benoît Bouchard: Mr. Speaker, I want to be shorter than my friend. No.


THE ECONOMY
Mr. Jacques Guilbault (Saint-Jacques):: Mr. Speaker, my question is directed to the Minister of Finance. The Minister of Finance, who is a-


An Hon. Member:: A great man.


Jacques Guilbault: Yes, he is a great man.


Some Hon. Members:: Hear, hear!


Jacques Guilbault: If the Minister is such a great man and deserving of all this applause-


Some Hon. Members:: Hear, hear!


An Hon. Member:: Time is up.


Mr. Speaker:: The Minister will no doubt wish that the Hon. Member would just stop right there. However, perhaps the Hon. Member could put his question.


Jacques Guilbault: Mr. Speaker, when the Minister of Finance tries to justify his interest rate policy he always says that it is for fear of fueling inflation. John Crow, Governor of the Bank of Canada, has an avowed objective to reduce inflation to zero. Do not think, Mr. Speaker, because they say it, it is their policy. The Minister is also imposing
March 28, 1988

billions of dollars in indirect taxes on Canadians which in turn are fueling inflation.


Some Hon. Members:: Question!


Jacques Guilbault: Witness the 10 per cent tax on long distance telephone calls and increased tax on cablevi-sion which has been in force since January 1. Witness the increased tax on gasoline which is coming onstream this week.


Some Hon. Members:: Question!


Jacques Guilbault: My God, there is a bunch of stupid guys on the other side.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Perhaps the Hon. Member will put his question.


Jacques Guilbault: Mr. Speaker, I would not like to be in your shoes and have the duty to maintain order in this place.


Mr. Speaker:: I suppose all I can say is that what the Hon. Member has just said on one side is probably being repeated solto voce at the same time on the other side. Will the Hon. Member put his question?


Jacques Guilbault: Mr. Speaker, what I am saying is that the Minister cannot say that he wants to keep inflation in check and impose taxes over taxes which fuel inflation. Why is the Minister saying to Canadians: "Listen to what I am saying, but don't watch what I am doing"?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, I think you observed that the Hon. Member started his question on a far better footing than he finished.
The Hon. Member, I think, has to realize that we are trying to follow economic policy in the broadest sense. Part of it results in increases in taxes. Part of it results in decreases in prices. As a result of the increase in the value of the Canadian dollar, we see that the cost of imports to Canadian consumers comes down. That, hopefully, will be reflected in the Consumer Price Index and the broader cost of living.
If we are able to achieve that objective, then, as I have said before, hopefully we will be able to do this soon and get interest rates down. In the meantime we are following a balanced economic policy, to one part of which the Hon. Member has referred, but there are many, many other parts as well.
[ Translation]


IMPOSITION OF INDIRECT TAXES-MINISTER'S POSITION
Jacques Guilbault: Mr. Speaker, I want to ask the Minister why is he trying to squeeze the taxpayers in a vice. First he forces them to pay high interest
Oral Questions
rates because he claims he has to keep inflation under control, but then he continues to levy hundreds of millions of dollars in indirect taxes-we will be getting more of these this week, on April 1-and there again they have to pay.
What is the Minister trying to achieve by squeezing taxpayers from both sides at the same time?


Michael Holcombe Wilson: Mr. Speaker, again I think the Hon. Member is being far too focused in his questions. He should look at the broader impacts of government policy and the broader objectives of government policy. Clearly, the broader objective, as I have stated on many occasions, as has the Governor of the Bank of Canada, is to improve the health of the Canadian economy and improve the ability of the Canadian economy to create economic growth and jobs.
That is happening. We have been right up at the top of the list in job creation. We have been right up at the top of the list in economic growth. We are trying to ensure that we continue that excellent performance, a performance that is widely recognized-


Mr. Speaker:: I regret to interrupt the Hon. Minister. There will be one final question.


CANADA-UNITED STATES FREE TRADE AGREEMENT-INTRODUCTION OF RATIFICATION LEGISLATION
Mr. Alan Redway (York East):: Mr. Speaker, my question is directed to the Deputy Prime Minister. Many Canadians, myself included, believe that we should not be implementing the Canada-U.S. Free Trade Agreement until after we have had a national election. However, all of that is going to be academic unless the United States Congress ratifies the agreement. Will the Deputy Prime Minister assure the House that legislation intended to implement the agreement will not be introduced until after the United States Congress ratifies the agreement itself?


Donald Frank Mazankowski: Mr. Speaker, the preparation of the legislation is proceeding. When it will be introduced is somewhat uncertain at this time. However, I have indicated it will be sometime after April 11, so that gives me a little latitude. It will depend on a number of things that will have to be taken into consideration. I will certainly take the Hon. Member's suggestion as a representation.

March 28, 1988
Point of Order
[ Translation]


POINTS OF ORDER
Jean-Robert Gauthier: On a point of order, Mr. Speaker, I want to urge the House to consider the facts as they are and not as the Deputy Prime Minister sees them with respect to the matter of the debate on Bill C-72.
I want to get back to it because I think some Members have been suggesting that the whole exercise has turned into a filibuster.

The Deputy Prime Minister has repeated for days and weeks this filibuster obsession of his. After having had the bells ring for two solid weeks, he would know what a filibuster is. I want to remind him that Bill C-72 at second reading was here for three days only, February 8, February 9, and March 7. There was a month's delay when the Government had to deal with its own back-bench reaction, at which time we all heard and read about its hesitation in facing this Bill. There was an official time of nine hours and 37 minutes of debate. That is hardly a filibuster.
I want to remind the Minister and the House that on second reading on February 8 we had a total of three hours and 19 minutes debate, on February 9, a total of six hours and 49 minutes debate and a cumulative total on March 7 of nine hours-


Mr. Speaker:: I think that, obviously, it is not a filibuster.
When the Hon. Member rises on a point of order, naturally...


Jean-Robert Gauthier: Mr. Speaker, my point of order is that it is neither acceptable nor proper in this House to impute motives to a Member or a group of Members regarding a debate or a division. The Deputy Prime Minister keeps repeating ...

He is imputing motives. He is breaking the rules of this House. I ask him to stop that kind of harassment-how is that for a word?


Some Hon. Members:: Oh, oh!


An Hon. Member:: Poor baby!


Mr. Benjamin:: Point of order.


Mr. Speaker:: I suppose, in the interests of fairness, I should hear the Hon. Member for Regina West (Mr. Benjamin) and then I will hear the Deputy Prime Minister (Mr. Mazankow-ski). But I want to indicate that I will not hear Members for too long because it does not seem to me to be much of a point of order.


Leslie Gordon Benjamin: Mr. Speaker, my point of order is a different one, if the Hon. Deputy Prime Minister is replying to the first one.


Mr. Speaker:: If the Hon. Member's point of order is a different one, I will hear from him in due course.
Hon. Don Mazankowski (Deputy Prime Minister, President of the Privy Council, and President of the Treasury Board: Mr. Speaker, in reply to my good friend, I think he knows that I never contravene the rules of this House intentionally, nor do I harass intentionally. What I was referring to is one day during the course of Question Period when both opposition Parties challenged me to bring on the Bill and they would pass it immediately. I took up that challenge. They decided not to pass it immediately. They decided to speak a little longer. That is the filibuster to which I was referring.


Mr. Speaker:: I suppose the role the Chair at a point like this is to be satisfied that both sides have had their say.


REQUEST THAT MINISTER TABLE DOCUMENT
Leslie Gordon Benjamin: Mr. Speaker, I have been looking at Beauchesne's Fifth Edition, Citation 327. I would ask the Chair's guidance about my point of order, or that he give consideration to it.
There is a fine line between "read or quote from a dispatch or other state paper not before the House". In response to a question by the Hon. Member for St. John's East (Mr. Harris), the Minister of Transport (Mr. Crosbie) used information from the rationalization studies of the Canadian National Railways to the effect that the rationalization studies of the CNR showed how much money it could save regarding the Moncton shops. I admit at the outset that that is not a direct quote or citing of the document. Surely the hon. gentleman, the Minister of Transport is going to extra lengths to skirt the rule.
I am asking, Sir, that you check the "blues" and consider my point of order as to whether or not the Minister of Transport should table forthwith rationalization studies of Canadian National Railway regarding the Moncton shops.


Mr. Speaker:: I have heard the Hon. Member. Perhaps the Parliamentary Secretary wishes to respond.


Richard Grisé: Mr. Speaker, I listened with interest to the Hon. Member for Regina West (Mr. Benjamin). We will check the "blues" and I will bring the matter to the attention of the Minister of Transport (Mr. Crosbie) and report as quickly as possible.


Mr. Speaker:: I will give this matter my consideration since the Hon. Member for Regina West (Mr. Benjamin) is a very senior Member in this place. I note, however, that the Hon.
March 28, 1988

Member has indicated that it is not a direct quote. I have the point the Elon. Member is making and I will give it consideration.



GOVERNMENT ORDERS


[Stage Direction]
The House proceeded to the consideration of Bill C-67, an Act respecting animal pedigree associations, as reported (with amendments) from a legislative committee.
The Acting Speaker (Mr. Paproski):: There is presently on the Order Paper one motion to amend Bill C-67, an Act respecting animal pedigree associations, standing in the name of the Hon. Member for Algoma (Mr. Foster).


Jean-Robert Gauthier: Mr. Speaker, there have been discussions among the Parties and there is general agreement that consent be given with respect to the following. The Hon. Member for Algoma in whose name the motion stands has been detained in his riding, unfortunately, because of weather. He has asked me if the House would give its consent to have the Hon. Member for Glengarry- Prescott-Russell (Mr. Boudria) move the motion in his stead.
I understand that the Government is favourable to this idea, as are members of the New Democratic Party.


The Acting Speaker (Mr. Paproski):: Is it so agreed?


Some Hon. Members:: Agreed.


Don Boudria: That Bill C-67, be amended in Clause 59 by deleting lines 42 to 44 at page
28 and lines 1 to 13 at page 29 and substituting the following therefor:
"59.(1) The registration or identification of animals of a distinct breed or evolving breed in respect of which an association is incorporated may be performed only by the association, or by the Corporation on behalf of the association, and may not be performed by any other association notwithstanding any contract or arrangement to the contrary.
(2) Nothing in subsection (1) shall preclude any association from entering into any contract or arrangement for the normal conduct of its business and affairs."
He said: Mr. Speaker, I stand on behalf of my colleague, the Hon. Member for Algoma (Mr. Foster) who was the representative of our Party on the legislative committee dealing with Bill C-67. When one is asked to substitute for a person who was on a committee and who is detained one has to pinch-hit, as we sometimes say. Notwithstanding that fact, as the deputy agriculture critic for our Party I am pleased to act on behalf of my colleague in proposing this amendment to the House.
The amendment which I am proposing is a brief one. I wish to refresh the memory of the House as to the contents of the
Animal Pedigree Act
amendment in question. Basically what we want to do is to amend Clause 59 of the Bill. In the first draft of the Bill Clause 59 was known as Clause 54. The current Clause 59- the one amended at committee-was amended by a member of the Conservative Party. I have the Hon. Member's name here but I know that we are to recognize a Member by his constituency. I believe it is the Hon. Member for Perth (Mr. Brigh-twell), if my memory serves me well in terms of the appropriate name of the constituency of the Hon. Member in question.
The Hon. Member for Perth introduced an amendment to the Bill thereby deleting Clause 59 and replacing it with something entirely different. That clause, removed by the amendment of the Hon. Member for Perth, states:
54.(1) The registration or identification of animals of a distinct breed or evolving breed in respect of which an association is incorporated may be performed only by the association, or by the Corporation on behalf of the association, and may not be performed by any other association notwithstanding any contract or arrangement to the contrary.
(2) Nothing in subsection (1) shall preclude any association from entering into any contract or arrangement for the normal conduct of its business and affairs.
That is also the amendment I propose on behalf of the Hon. Member for Algoma. Everything that is in the amendment was in the government Bill before it was changed as a result of an amendment moved by the Hon. Member for Perth.
There are a number of things that disturb me about the way in which this whole matter was dealt with by members of the Conservative caucus. Principally, I am worried about the fact that the Canadian Livestock Records Corporation, or the corporation, according to this Bill, is mainly federally funded. Because of the fact that this funding goes to this organization the absence of the clause, its removal, means that the Government now wants to privatize that particular function. I am echoing here the sentiments of the Hon. Member for Algoma which he stated at committee.
I see that the Parliamentary Secretary is with us today. I hope that in the unlikely event that he is willing to consider our amendment, he is at least willing to place on record in the House that there is no attempt in any way, shape or form by the Government to privatize the function that I previously described.
The other concern that we have is the following. It is that if the Canadian Livestock Record Corporation loses its authority it will eventually lose the registration business of the larger associations, hence making it more costly to maintain the records of the small associations. It is somewhat like the argument that Canada Post brings to our attention at times. In other words, if someone else is allowed to do part of the more lucrative business the corporation will be left with the more difficult or less lucrative business. This means that it will be more costly to operate that part of the business because of the fact that the good business will be gone. This is a concern that was raised at committee by some groups.

March 28, 1988
Animal Pedigree Act
Another concern that I have is with respect to the manner in which the amendment was brought forward. First, in view of the fact that the content was there in the original Bill, the contents of the amendment to which I am referring today, it must have been government policy. It must have been the policy of the Minister.
The Minister brought in a number of amendments to this Bill. Given that a package of amendments was brought in and in that package there was no mention of the particular amendment that was moved by the Hon. Member for Perth, I ask this: Was it the policy of the Government to have that amendment there, or was it simply an idea that came from the Hon. Member for Perth? Presumably it was a policy initiative which he was able to convey successfully to the Minister whereby the Minister's own policy should be amended to reflect the view of the Hon. Member for Perth. Or is it simply that the Government wanted to do this, but that the Minister felt that it would be politically more difficult for him or his Parliamentary Secretary to move the amendment, so he thought he would have someone else do it in order to take the heat off the Government for moving the amendment in question?
We have received a number of letters on this issue. I believe that we are permitted only 10 minutes to move our amendment, therefore, I cannot read all of the letters that we have received. The Parliamentary Secretary will know that we have received letters objecting to this change in Clause 59 of the Bill, or Clause 54, as the people were commenting on the first draft. There are people who would like that clause to remain.
In the true spirit of parliamentary co-operation to which we are accustomed from the opposition side, I would ask that the Government be as objective as we are on this side of the House and consider an opposition amendment to this Bill in order to restore it to what it was initially.


Mr. Lee Clark (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, before addressing the remarks offered by the Hon. Member for Glengarry-Prescott- Russell (Mr. Boudria) on behalf of the Hon. Member for Algoma (Mr. Foster) who, unfortunately, cannot be present due to the weather. I wish to inform you, Mr. Speaker, and the House that there have been consultations among representatives of the Parties of the House with respect to another minor amendment which we are advised would further the purpose of the Bill. I am referring to the following amendment:


The Acting Speaker (Mr. Paproski):: I must interrupt the Parliamentary Secretary. We must first dispose of the Government's amendment before we go on with this amendment. If there is no further discussion, I will put the question.


Walter Leland Rutherford (Lee) Clark: I wish to speak to the amendment before the House.


The Acting Speaker (Mr. Paproski):: the Hon. Parliamentary Secretary to the Minister of Agriculture.


Walter Leland Rutherford (Lee) Clark: First, I want to address two or three of the remarks made by the Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria) when he raised questions as to the method by which the Bill was amended as it was during the committee stage. Perhaps I should begin by explaining that this Bill has been amended on several different occasions during the course of the hearings by the legislative committee. Quite frankly, I think that that process demonstrates the importance of the legislative committee function. The committee met on numerous occasions and there were many amendments. There is only a question about the one which is now before the House.
In my opinion, the wording in Clause 59, as it is presently reported to the House, having been amended by the legislative committee, should in fact stand. The implications of the amendment were very carefully considered. It was introduced only after considerable discussion and considerable notice. In fact, I believe there was some reference to this as early as December in our proceedings.
The amended Clause 59 as reported to the House was introduced at the request of several breed associations, including the Appaloosa Horse Club of Canada, the Canadian Charolais Association, the Canadian Beef Breeds Council, the Canadian Gelbvieh Association, and the Canadian Pinzgauer Association.
I would like to remind the House that Clause 59, as proposed by the legislative committee, will provide more choice to Canadian industry in processing its registrations. That is the reason why the amendment was adopted at the committee stage. We believe that this amendment as it now stands will promote an environment of free enterprise and competition in the area of maintaining records.
Under the current Livestock Pedigree Act, breed associations have the right to either register animals themselves, or have the Canadian national livestock records register those animals on their behalf. We felt that this policy was too restrictive. Since the wording under the legislation currently in force has made the policy too difficult to enforce, some associations are already using the services of another association to register their animals.
The Canadian Gelbvieh Association and the Canadian Pinzgauer Association are using the services of the Canadian Charolais Association to register and keep records of their animals. This working relationship between two or more breed associations has been very positive in terms of reducing the cost of record keeping and registration services.
Clause 59, as it now stands, will allow the expertise, staff, and equipment of one breed association to be made available to other associations for registration and record keeping purposes. Such arrangements will help reduce the need for so many breed associations to have their own record keeping
March 28, 1988

systems and staff. It will also allow a choice of record keeping and registration services other than that provided by the new Canadian Livestock Records Corporation. This proposed amendment to the Bill as reported to the House in no way reflects upon the ability of the new Canadian Livestock Records Corporation to provide a service.
For some associations, it will mean a cost saving which will allow them to concentrate their efforts and finances on such other important activities as promoting, improving, testing, and showing breeds. The amendment of the Hon. Member for Algoma, as presented by the Hon. Member for Glengarry- Prescott-Russell, could result in a reduction of the resources needed to support those positive activities.
I appreciate that the Members who supported this proposed amendment want assurances that the new legislation is in the best interests of Canadian industry. I am pleased to assure all Members that Clause 59 of the new Animal Pedigree Act, as it now stands, will ensure the continuing credibility and integrity of the Canadian livestock pedigree record system.
I remind all Members of the House that, under the current Clause 59, arrangements between associations for the registration of animals will have to be approved by the Minister of Agriculture (Mr. Wise). This will ensure that quality and integrity of record keeping services are demonstrated.
If the Minister of Agriculture is not fully satisfied that a breed association can fulfil the requirements for registering and keeping records of animals on behalf of another association, the Minister will not approve the arrangement. It is as simple as that.
As a further guarantee of the integrity of the new system, the Minister of Agriculture can terminate any previously approved arrangements between breed associations, if there is evidence that an association is not living up to its responsibilities regarding the record keeping and registration of animals.
Throughout its long history, the Canadian National Livestock Records Corporation has maintained a high standard and a record of service to breed associations and thereby to Canadian agriculture. Under Clause 59, the Government is convinced that the new Canadian National Livestock Records Corporation can continue to provide the services of its predecessor while also standing up to the challenge of competition from other breed associations.
In conclusion, Clause 59, as amended in the legislative committee, should stand. It is a good amendment. It provides for competition where there might otherwise be an unjustified monopoly. The majority of breed associations do not oppose Clause 59 because it offers the industry both flexibility and the protection of built-in safeguards. Most important, it also offers them a choice in record keeping and registration services.
I would ask that the Hon. Member who has moved the amendment, having considered the arguments presented on this side, might consider whether he wishes to withdraw it and allow the legislation to proceed without any further delay.
Animal Pedigree Act


The Acting Speaker (Mr. Paproski):: Is it the pleasure of the House to adopt the amendment?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


The Acting Speaker (Mr. Paproski):: All those in favour of the motion will please say yea.


Some Hon. Members:: Yea.


The Acting Speaker (Mr. Paproski):: All those opposed will please say nay.


Some Hon. Members:: Nay.


The Acting Speaker (Mr. Paproski):: In my opinion, the nays have it. I declare the amendment lost.
Amendment (Mr. Foster) negatived.


The Acting Speaker (Mr. Paproski):: I will entertain the amendment of the Hon. Member for Brandon-Souris.


Walter Leland Rutherford (Lee) Clark: That Bill C-67, an Act respecting animal pedigree associations, be amended
in Clause 21 by striking out line 44 at page 11 and substituting the following
therefor:
"Members have responded in writing to the consulta-".
He said: Mr. Speaker, for the sake of the record I should like to indicate that we have consulted and indeed we recognize that this was simply a technical omission.
I very much appreciate the co-operation of the two opposition Parties in agreeing to the amendment at this time.


Don Boudria: Mr. Speaker, I just want to confirm for my part that indeed consultation took place. The amendment in question is purely technical in nature. Therefore, the Official Opposition is always glad to co-operate, as usual, with the Government in further improving legislation for the benefit of Canadian agriculture.


Victor Fredrich (Vic) Althouse: Mr. Speaker, I concur with the proposed change. It simply clarifies the meaning of the Bill. I do not think it changes the meaning in any way and leaves no doubt as to what the meaning was intended to be.


Mr. Gordon Taylor (Bow River):: Mr. Speaker, I do not want to delay the debate, but I should like to take this opportunity to thank members of the committee. As chairman of the committee it was a real pleasure to work with the two members of the Opposition and Members on this side of the House. They were clearly objective. There were representations from a great number of organizations, and I think that

March 28, 1988
Animal Pedigree Act
we reached a conclusion which will be very satisfactory to the people of the nation.


The Acting Speaker (Mr. Paproski):: Is it the pleasure of the House to adopt the amendment?


Some Hon. Members:: Agreed.
Amendment (Mr. Clark, Brandon-Souris) agreed to.


Harvie Andre: that Bill C-67, an Act respecting animal pedigree associations, as amended, be concurred in.


The Acting Speaker (Mr. Paproski):: Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
Harvie Andre: that the Bill be read the third time and passed.


Walter Leland Rutherford (Lee) Clark: Mr. Speaker, I simply want to add my words of thanks to those already expressed by the chairman of the committee, the Hon. Member for Bow River (Mr. Taylor), and to repeat what I said a few moments ago.
Sometimes in the country at large, and perhaps even among the membership of the House, there is some skepticism about the role of the parliamentary process and, quite frankly, the role of so-called back-benchers in that process. Those who have had occasion to follow Bill C-67 through the hearings of the legislative committee would have been reassured to discover that, as is nearly always the case, there was very little partisanship. I appreciated that very much, because it was a clear indication that all Members of the House have real concern for the well-being of agriculture. This is demonstrated almost consistently in any agricultural issue which comes before the House, particularly at committee stage.
The manner in which the amendments were brought forward, studied, and acted upon certainly demonstrates the role of public hearings. It also demonstrates the role of receiving submissions and, quite frankly, the importance of the committee process.
I appreciate that the Bill perhaps required more clarification than we would have wished, but so be it. I think the committee accepted its responsibility in a very commendable fashion.
When I say that, I refer to all members of the committee irrespective of Party. On behalf of the Government I should like to express words of appreciation for the process as it proceeded.


Don Boudria: Mr. Speaker, my comments will be brief. I wish to echo those of the Parliamentary Secretary to the Minister and the Chairman
of the Legislative Committee concerning Bill C-67 and thank all my colleagues of the House for their full co-operation in putting together a substantially improved Bill for the farm community.
This new legislation respecting animal pedigree associations which I believe will be given third reading in a few minutes contains amendments which have been long in coming and about which the least I can say is that they will bring about a much more up-to-date legislation.

The Bill before us which would regulate the activities of breed associations will be far better than previous legislation. We know that previous legislation was crying for renewal in that it had been in place for many years. As a matter of fact, we were told that it had not been amended since 1952. Obviously it was in need of amendment.
Many of the breeds and many of the issues involved in breeding animals today did not even exist at the time the last round of amendments occurred. Obviously the previous Act was due for rejuvenation much in the same way as our Official Languages Act needs to be brought up to snuff from time to time.
It is my opinion that the amendment proposed today makes the Bill better. However, notwithstanding, I know that there were groups which wanted a particular clause removed in the way the Parliamentary Secretary suggested that it was. As usual, the House will not be able to please all groups, particularly when two groups have opposing points of view on the same issue. The proposed Bill with its amendments is substantially better than what we had before, and I am sure that the House will want to give it quick passage this afternoon.
It is my hope that the Bill will become law very shortly, that it will receive Royal Assent and proclamation as soon as the other House can deal with it in what I hope will be an expeditious manner.
The industry has asked for the new Act. We have had cooperation of not only all Hon. Members of the House, as the very able chairman and I indicated previously, but we have had good co-operation from the Parliamentary Secretary, the department, and several groups of individuals representing breed associations before the committee.
As I indicated previously, I was not a member of the committee, although I think I attended three of its meetings, replacing the Hon. Member for Algoma (Mr. Foster) when he could not be there. I believe we were both at an initial meeting just to show our interest in the issue and to show our interest in agriculture, of course.
Having made those few remarks, I indicate my support for the Bill at third reading, as well as the support of my colleagues in the Liberal caucus.


Victor Fredrich (Vic) Althouse: Mr. Speaker, in closing the debate on Bill C-67, I should like to point out
March 28, 1988

that the Act will now clarify some of the procedures which breed associations will use to become official associations. The rules have been clarified on how they go about providing registration for their particular breed, how they establish criteria for a breed, and how they maintain those standards throughout the existence of the breed. In the past, we depended heavily on the Canadian Livestock Records Corporation to maintain the records for most official breeds. This Bill will permit, with Ministerial approval, some variations from that. That was a concern to the associations using the Canadian Livestock Records Corporation.
I believe that this change was permitted on the basis of it being an experiment which we would hope the Minister would monitor very closely. I point out that the proposed law does not allow any breed association to leave the Canadian Livestock Records Corporation willy-nilly. Associations must do so with the permission of the Minister and will require a reason. I presume the Minister will take great care in deciding on these issues so that he does not in fact undermine the credibility of the Canadian Livestock Records Corporation.
Under this Bill, as under its predecessor, it is possible for breeds to evolve and for new breeds to be created. Today, March 28, is a good day to commend the breeders at Agriculture Canada for the 20-year project that has just recently come to fruition. The creation of three new breeds of sheep was announced over the weekend, and the creation of a new breed is not something that happens very often in Canada.
The Lacombe hog was developed nearly 20 years ago through the efforts of Agriculture Canada at Lacombe, Alberta. The Hays Converter, an evolving breed rather than a new breed, was initiated by the elder Senator Hays and has been registered as a breed for 15 or 20 years. There are now three new distinct breeds of Canadian sheep.
The Canadian Arcott was developed for use as a provider of sires. It has a superior growth rate and a lean meat yield. Twenty-eight per cent of its genetic makeup comes from the He de France breed and the rest originates from existing breeds which are basically British breeds. The Outaouais Arcott and the Rideau Arcott are two sister breeds, but they are distinct breeds. They are intended to be used as prolific dams. They have an average litter size of 2.5 to 2.6 lambs per birthing. This is a highly prolific breed. The Outaouais Arcott is made up of about 49 per cent Finnish Landrace. Sheep breeders will know that they are a very prolific breed. The Rideau Arcott contains 40 per cent Finnish Landrace and 14 per cent East Friesian.
I think it is suitable, when talking about the Animal Pedigree Act, to give some recognition to these three new breeds of sheep. It is a fine coincidence that the announcement of these new breeds should come at the same time the new Bill goes through the House. This will continue the fine work and reputation Canada has always maintained as a consistent place
Excise Tax Act
to register new breeds and set up monitoring agencies such as the Canadian Livestock Records Corporation. This will ensure that genetics and registration procedures do meet international requirements so that we will be able to engage in international trade with the breeding stock we produce on Canadian farms.


[Stage Direction]
Motion agreed to, Bill read the third time and passed.


The Acting Speaker (Mr. Paproski):: It is my duty, pursuant to Standing Order 66, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the Hon. Member for Broadview-Greenwood (Ms. McDonald)-Environmental Affairs-Presence of dioxins in Miramichi River-Government position/Request for assurance adequate measures will be taken; the Hon. Member for Fundy-Royal (Mr. Corbett)-Canada Post Corporation- Closure of rural post offices-Provision of alternate services; the Hon. Member for Regina East (Mr. de Jong)-National Revenue-Principal Group bankruptcy-Payment of taxes by investors/Request that demands for payment of taxes be stopped.


EXCISE TAX ACT
[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson: That Bill C-l 17, an Act to amend the Excise Tax Act and the Excise Act, be read the second time and referred to the Standing Committee on Finance and Economic Affairs.
John Edmund Parry: When the House recessed for lunch at 1 p.m., Mr. Speaker, I was criticizing the Government for its policies and their impact especially on remote areas of Canada. So I will continue with my comments on the transportation costs situation, in view of the fact that any tax increase on gas will be reflected by higher costs.

A sort of geared relationship occurs when this happens because the price of everything bought in a northern or remote area is influenced by transportation costs. Therefore, when fuel goes up, everything goes up. That is an effect which has never been fully investigated or quantified by the Government.
There are other items of a technical nature in this Bill as there always are in a measure that deals with excise tax. I think it is worth while instancing some of the effects these will have on Canadians. Of course, the shift of the tax on motor

March 28, 1988
Excise Tax Act
fuels to the manufacturing level is supposed to address compliance and administration problems, but we have also seen a shift to the wholesale level for snack foods, pet food and kitty litter, candy and confectionery goods and some electronic equipment.
I hold no particular grief for candy or snack foods, though I am probably a heavy consumer of them. I would, however, point out the situation of those who must, for their health and full functioning in society, purchase pet foods including, of course, those who have seeing-eye dogs. Monkeys are being trained to assist people who are mobility handicapped and have difficulty with the most fundamental and basic manipulations of their limbs. As well, dogs and cats are trained to alert people who are deaf to events within their homes that might be threatening to them. It seems to me that these people should at least be able to claim the cost of pet food as a medical expenses deduction. It is essential, of course, to the continued health and effective functioning of these highly trained companions who are trained at considerable expense that they be well fed. I believe it would be appropriate for the Government to make that humane adjustment of that particular tax.
There are other measures in the Bill, including the refund provisions for public institutions, the amendment of the fair price provisions and revision of the compliance provisions on on-site inspection because of the reduction in on-site surveillance, introduced wisely or otherwise by the Government. These are of a minor technical nature and I will not comment on them further.
There are some relieving measures in the Bill, including the exemption on the price of original prints as pointed out by my colleague, the Hon. Member for Regina East (Mr. de Jong). There is an increase in the tax threshold, a necessary corrective counterbalance to the increased bureaucratic provisions this imposes. Of course, for the benefit of primary producers, there is a continuation of previous exemptions that I think were very wisely granted.
One thing that is not in this legislation but should be is some form of incentive through the excise tax system for producers, marketers and distributors of fuel alcohol. I believe the Government is letting slip a great opportunity to obtain answers concerning blending of fuel alcohol produced from surplus biomass and unsaleable or surplus agricultural commodities. It could make a great contribution to the economy, particularly in areas such as the Prairies where the economy is depressed because of the lack of demand in the primary markets for those commodities. I think the Government is being pressured by the international petrochemical companies in this respect. Certainly it is an opportunity that an NDP Government would be swift to take advantage of.
Turning to some of the effects of the Act, it is worth remarking that the estimate that 42 per cent of federal tax revenues were collected on intermediate and capital goods
means that manufacturers end up paying a hidden sales tax on those goods used in their operation, and therefore we have a tax on tax. I believe most Governments, under modern tax theory, have tried to avoid that. Certainly our Government should be trying to avoid it.
Then we have discrimination against exports. These hidden taxes are passed through to the export price, reducing the competitiveness of Canadian goods. Conversely, they confer an advantage on imports because they are not included in the cost base for the calculation of federal sales tax on imports.
One thing that I was of course concerned about was that the Government would attempt to tell the people of Canada that the federal sales tax credit, as it is known in the income tax form, is sufficient to offset the many increases passed through by way of the federal excise and sales taxes. Clearly, that would be a hypothesis which the Government could not justify by reference to the facts and figures.
While the Government has raised $1 billion or $2 billion per year in every year of its mandate through increases and a broadening of the base for the federal sales and excise taxes, it has seen fit to bring in only a very nominal, minimal sales tax credit which would cover the additional sales tax costs of the average consumer if they were purchasing only a limited range of items. I say to the Government it should come clean with Canadians. It should be frank and open as to what its objectives are in rolling into one single Bill all these changes and increases in the federal sales and excise taxes. The objective is not fairness for Canadians. It is to raise revenue, which is the way the Government believes in making its major thrust to tackle the problem, as it sees it, of the deficit.


The Acting Speaker (Mr. Paproski):: Questions or comments.


Mr. Blenkarn:: Mr. Speaker, I was wondering if the Hon. Member would confirm that the NDP would be interested in the multi-stage sales tax presently being negotiated between the federal and provincial Governments? It would get rid of this horrendously anti-Canadian sales tax we presently have and possibly combine provincial sales taxes with the federal tax. In that respect, would the NDP be in favour of a multistage tax with the broadest base possible, including even necessities so that the rate could be as low as possible?


John Edmund Parry: Mr. Speaker, I am very glad to have the opportunity to be the first speaker to comment on a question from another Member of the House today.
The Hon. Member is of course the Chairman of the Standing Committee on Finance and Economic Affairs. He, as an expert in all matters of taxation, including federal excise and sales taxes, knows that a multi-stage federal and provincial tax is not completely without problems either in its conceptualization or application.
What I would say is that any measure, be it by legislation or negotiation, which enables the people of Canada to more fully
March 28, 1988

perceive the impact of taxes, to more clearly see the tax content of any merchandise they are purchasing, to be more certain of the areas to which their tax contributions are going, would be a good one. If we could come up with a transparent tax, shall we say, or one that was readily understandable by the vast majority of Canadian consumers, a tax where they could identify not only the amount they are paying on a particular item but also the sort of thing it is going to finance, then we would have taken a step forward. Perhaps the Hon. Member is picking up on the point I made about the monopolies in the times of King James I of England and the degree to which costs were hidden. That is of course paralleled by the situation we have in Canada today.
In the same vein I think it is a good idea that, for example, gasoline companies publicize on their pump an analysis or breakdown of the price of gasoline. That information is valuable and Canadians think it is worth while.
The idea of broadening the base of the multi-stage tax being negotiated between the federal and provincial Governments to cover necessities is not an idea that has attracted great popularity in Canada. It is not an idea that my Party is supportive of. Although one would acknowledge that many societies in this world have far less equal distributions of income than does Canada, we do have a society in which there are significant differences in the distribution of income. Therefore, we should try and identify those necessities that are most essential, shall we say, to the basic standard of living that we would like to see for everyone and those items should not be taxed.
The definition of necessity is of course one that will continue to provoke discussion and argument, as well it should. Obviously if we are to say some necessities will not be taxed, we want to define them broadly enough so that those which are essential to everyday living are included but narrowly enough so that we do not overly erode the tax base and force the loading of the tax on to a limited number of items as is the case at present.


Jean-Robert Gauthier: Mr. Speaker, I should like to comment briefly and perhaps direct a question to my hon. friend. As everybody knows, indirect taxes are regressive because low-income taxpayers spend a greater part of their income on consumer's goods. I need not explain to my hon. friend that a sales tax is a regressive tax. To suggest today that the Government should get together with the provinces and agree on a federal-provincial sales tax ...
A multi-stage type of sales tax sounds to me like an idea which the Government should have proposed when it brought in fiscal reform. In addition to proposing it, it should have implemented it at the same time. That is the point I am trying to make.
Excise Tax Act
Does the Member not think that the Government should have had the courage of its convictions? If it was going to change the tax laws and reform the issue of fiscal operations, should it not have at the same time given Canadians the same type of change in terms of the sales tax?
Does the Hon. Member not believe that the actual floor or ceiling, depending on how you look at it, of $16,000, at which Canadians may have a tax credit of $70 per adult and $35 per child, must be revamped and rethought in an effort to eliminate this regressive approach to sales taxes? Does the Member agree with the Member who just suggested that we should go to the multi-stage tax system?


John Edmund Parry: Mr. Speaker, the New Democratic Party has sometimes been accused of having addiction to democratic centralism. It would appear that the first part of that phrase is somewhat less regarded in the Liberal Party.
It seems to me that a multi-stage tax cannot be introduced except by consultation with the provinces. For the Hon. Member for Ottawa Vanier (Mr. Gauthier) to suggest that it is simply a matter of the Government grasping its courage in its hands is indeed to confuse the floor of consultation with the ceiling of autocracy.
On the point of regressivity the Hon. Member and myself are, of course, completely in agreement. On the point of the very nominal sales tax credit, I am sure that the Member is equally as concerned with the low income earners of his riding as I am with those in mine in saying that this measure is little more than window dressing and certainly should be revised, enriched, and made more gradual and should extend farther up the scale of income.


Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: Mr. Speaker, I am pleased to take part today in this debate on Bill C-117, an Act to amend the Excise Tax Act and the Excise Act. First of all, the purpose of this Bill is to implement many sales tax and excise tax increases which the Government had annonced through its February 18, 1987 Budget, its June 18, 1987 tax reform, measures to come into force on December 16, 1987, as well as its February 10, 1988 Budget. Most of these tax increases are already in force or will be very shortly.
The purpose of this Bill is also to make technical changes to the sales tax. For instance, the Government is amending the provisions dealing with fair prices to apply tax on fair market values when non-arm's length sales are made and shifts the sales tax from the manufacturer to the wholesale level for snack foods and other products. I should like to list, however, the different taxes which will be affected by this Bill, the dates of their coming into force as well as their dollar impact which will definitely affect the budget of all Canadians families.
First, the Budget of February, 1987, announced a 12 per cent tax on snacks, candy and ice-cream, which came into effect on July 1, 1987, which will allow the Government to

March 28, 1988
Excise Tax Act
relieve taxpayers of $60 million in 1987-88 and $80 million in 1988-89.
Then, there was a 4 per cent tax increase for cigarettes and tobacco which came into effect on February 19, 1987, and which will pour into the Government coffers $70 million in 1987-88 and another $70 million in 1988-89.
There was also a $4 ticket increase of the tax on air transport to be implemented in two stages, the first on May 1, 1987, and the second on August 1, 1987, which will result in Canadian taxpayers paying $45 million more in 1987-88 and $50 million more in 1988-89.
Mr. Speaker, in the same Budget of February, 1987, we find an increase in the sales tax on leaded gasoline to bring it up to the level of unleaded gasoline, which increase came into effect on April 1, 1987, and brought revenue of $30 million in 198788 and of another $30 million in 1988-89.
Mr. Speaker, the Minister of Finance (Mr. Wilson) announced his tax reform project on June 18. After consultation, on December 7, 1987, he implemented some of the measures announced on June 18, but some of them came into effect the very same day they were announced, on June 18.
For instance, as of January 1, 1988, there has been a new 10 per cent tax on long distance telephone calls. I mention this as an example as people might not think about it, but at one end of Montreal Island, around Riviere-des-Prairies, in the Mercier riding, residents of Montreal have to pay long distance charges if they make a telephone call to a neighbouring city such as Faval. This new tax is unacceptable for these people. I wanted to give a very specific example because rural residents are not the only ones involved-and this is vital because everybody makes long distance phone calls-but so are people who live downtown, for this so-called talk tax will apply to all long distance calls dialed by Canadians.
Mr. Speaker, the measure also contains a tax increase on cable TV. These two measures, effective January 1, will prove to be just another way to replenish Government coffers: $870 million in fiscal year 1988-89, $945 million in fiscal year 198990, and $1 billion in fiscal year 1990-91.
Again as a result of this tax reform, Mr. Speaker, there has been a 4 per cent tax increase on paint and wallpaper, up from 8 to 12 per cent effective January 8, and this will cost Canadians some $60 million a year.
Mr. Speaker, of course we said over and over again in the House that the Minister of Finance and the Conservative Government were juggling with figures when they kept talking about deficit reduction. They resorted to a creative accounting process. And now, Mr. Speaker, the tax reform includes accelerating the remittance of sales and excise taxes as of April 1, 1988, the day when Canadian companies will have to begin speeding up tax remittances. This stroke of the pen, this creative accounting, Mr. Speaker, will raise $1.6 billion for the Treasury.
Add to that the accelerated remittance of source deductions, introduced the year before, which will raise approximately $2.6 billion. In terms of reducing the deficit, one could say both measures made it possible for the Minister of Finance to tell Canadians he had reduced the deficit. However, he did not really do so because this was a one-time revenue raising measure so that next year comparisons will be skewed.
There is another very important item. Ninety-six per cent of Canadian businesses have a turnover of less than $2 million. We have 86 per cent of Canadian businesses that are small businesses. Every day, Members on both sides of the House keep repeating that 86 per cent of these businesses create most of our jobs. And 96 per cent of those businesses will be subject to the kind of creative accounting the Minister of Finance has just expanded.
When they say they want to provide incentives for small businesses to develop, and that these businesses are important to the economy of this country, that is perfectly true, Mr. Speaker. These businesses have created 75 per cent of our jobs. But when it comes down to concrete action no measures are forthcoming, and in fact everyone agrees small businesses have problems with capitalization. And now with this measure, instead of helping these businesses increase their operating capital, the Government is forcing them to reduce that capital.
In the same Budget or tax reform of December 1987, the Minister announced another increase in the tax on alcohol and tobacco, a 3 per cent increase from 15 per cent to 18 per cent, effective as of January 1, 1988, which will raise another $175 million annually at the expense of Canadian taxpayers.
Mr. Speaker, there was of course the February Budget, referred to by many Canadians as the one cent tax budget. In a few days, Mr. Speaker, on April Fool's Day, but this is no joke, Canadians will have to pay one cent per litre more for gasoline because of an increase in the excise tax.
That, Mr. Speaker, was briefly what the impact will be of Bill C-117.
The Government is asking the House to adopt tax increases, most of which are already in effect. Some have been in effect for over a year. I think it would be appropriate, Mr. Speaker, to recall that the Minister of Finance and the Prime Minister both promised they would not raise taxes.
For instance, in a debate in this House on March 6, 1984, when the Minister of Finance was the Conservative finance critic, he said, and I quote: "We would cut spending. We would not raise taxes. Tax levels in Canada are already too high". However, in three and a half years that same Minister, the same Member who is now Minister of Finance, has increased taxes by about $22 billion since September 1984. What was on his mind? What was he thinking on March 6, 1984, when he said he just wanted to reduce expenditure, that he would be careful not to raise taxes? But after he was
March 28, 1988

appointed Minister of Finance, he did exactly the opposite of what he had been preaching when he was in opposition.
Also, Mr. Speaker, on November 29, 1984, a couple of months after the Prime Minister came into office, he told the newspaper Le Devoir, and I quote:
"Canadians pay an awful lot of money for government services."
We pay more than enough. If the Prime Minister believed Canadians were paying too much for services, Mr. Speaker, how come he let his Minister of Finance put up taxes by about $22 billion since November 29, 1984?
Of course, revenues from indirect sales and excise taxes have also expanded much more rapidly than those from direct taxes since the Conservative Government was elected. The revenues from sales and excise taxes jumped 77 per cent between 198485 and 1988-89, while personal income taxes grew by 55 per cent and corporate taxes by 28 per cent.
Personal tax increase should be noted. All income, sales and excise tax hikes considered, corporations have been subjected to the greatest rises, Mr. Speaker.
But let me get back briefly to the tax reform. In that tax reform, Mr. Speaker, the Minister of Finance reduced the general corporate tax rate while maintaining the special low tax rate for large manufacturing companies. But in reducing the general tax rate for small businesses, he did not maintain the low rate for small manufacturers.
In 1987, these small manufacturing companies paid 10 per cent federal taxes. Now, with tax reform, they have to pay 12 per cent. That is the social justice, the tax justice that this Government promised Canadians in 1984. Today, the small business sector which creates most of our jobs, that dynamic and constantly advancing sector is disappointed not only because the tax reform did not bring to our system the simplicity we had hoped for, but also because this vital job-creating sector is facing a 2 per cent tax increase. That is how the Conservative Government supports Canadians who want to start a business, Mr. Speaker!
I should mention here, Mr. Speaker, that when we speak about a 77 per cent increase in excise tax, we are referring to the fact that in 1984-85, the Government collected $13.7 billion in sales and excise taxes and in 1988-89, it will collect $24.3 billion, which represents $10.6 billion or 77 per cent more in revenues.
However, we know, Mr. Speaker, that indirect taxation is regressive because the middle-income taxpayers spend the largest part of their income on consumer goods. Of course, the Government became aware of that fact and in 1986, after a major increase in tax, it felt a little guilt, and decided to create a refundable sales tax credit.
However, those funds are still clearly inadequate, Mr. Speaker. They are now amounting to $70 per adult and $35 per child, and the revenue threshold triggering a decrease in
Excise Tax Act
them, that is $16,000, is far from the poverty level. Therefore, Mr. Speaker, after all those incredible and unacceptable increases, how can we tell Canadians: "We will offer you some relief'. And we offer them a scanty amount of $70 per adult and $35 per child, provided though that the family income is less than $16,000. That is unacceptable!
Finally, let me remind you, Mr. Speaker, that the indirect taxes are hidden since they are included in the price of goods and the consumer is not aware of them when he buys goods. Politically speaking, thoses taxes are easier to increase. I have outlined those increases when I pointed out that the Government made ample use of those hidden taxes, as with what they call creative accounting, since it brought forward two new measures providing for the accelerated remittal of the sales tax and the speedy recovery, in one single move, of more than three billion dollars of personal and corporate income taxes, Mr. Speaker ...
So, technical changes to the sales tax became necessary because the Government did not want to engage in a one-stage tax reform. It could have avoided those technical and complex changes had it had the courage to proceed with the sales tax changes and with the personal and corporate income tax reform at the same time.
Mr. Speaker, I had the opportunity to attend a few meetings of the Standing Committee on Finance and Economic Affairs. All the groups appearing before it stated one after the other that the Government should have brought out an overall reform rather than proceeding through stages. This has considerably reduced the impact of the exercise. With the first stage of its reform, the Government agreed to give some goodies, but we are well aware that if it wins the next election, it will implement its second stage.


An Hon. Member:: And we are going to win.


Alfonso Gagliano: The Tory Member has just said that the Government is going to win. Of course, this remains to be seen. But if Canadians should decide to rely again on the Government, I am sure they will regret it after the election, because we know what this second stage of its famous tax reform has in store for us.
Mr. Speaker, you are signaling that my time is over. I should like to add that the Government, over the past three and a half years, has introduced no policy of direct assistance to small and medium size businesses. Where are the financing programs? Where are the export assistance programs for small businesses? Where are the tax assistance programs, Mr. Speaker? They have increased. The only area with a tax increase in the tax reform is that of the small business which must pay 10 per cent in 1987 and 12 per cent in 1988. This is unacceptable, and Canadians are going to pass judgment on this Government as soon as the Prime Minister has the courage to call an election.

March 28, 1988
Excise Tax Act


Mr. Hovdebo:: Mr. Speaker, I have one short question which I want to direct to the Hon. Member. I wonder if he can give us some indication of what he thinks the effect of this Act will be on individuals, say, the middle class individual who pays a considerable amount of this tax? Can he give us any indication or an estimate of the amount it would cost either an individual or a small business? How much would their taxes be increased?


Alfonso Gagliano: Mr. Speaker, I want to thank the Hon. Member for the question. Unfortunately, I do not have the figures for an individual or for a small business. However, I can give the Hon. Member a list of billions of dollars in taxes which are the total tax increases since September 1984 when the Conservative Government came into power. For example, in the fall of 1984, there was an increase of 1 per cent in sales tax. There was a second increase of 1 per cent in sales tax in 1986, and there was a third increase of 1 per cent in sales tax in 1986.
There was a first increase of two cents a litre on gas in 1985, a second increase of 1 cent a litre on gas in 1987 and a third increase of 1 cent a litre on gas again in 1987. There was the equalization of sales tax on unleaded gasoline in 1987 which cost the taxpayers $30 million. There was the extension of sales tax on candies, soft drinks and pet food in 1985 which cost the taxpayers $400 million. There was the extension of sales tax on snack foods in 1987 which cost $60 million.
There was the first increase in cigarette and tobacco taxes in 1985 which costs the taxpayers $320 million. There was a second increase in tobacco and alcohol taxes in 1986 which cost the taxpayer $150 million. There was a third increase of 4 per cent in tobacco taxes in 1987 which cost the taxpayers $70 million.
There was the elimination of the Registered Home Ownership Savings Program in 1985 worth $105 million. There was the deindexation of the tax system in 1986 which was worth $635 million. There was the elimination of the federal tax reduction in 1986 which was worth $650 million. There were the changes to marital exemptions in 1986 which was worth $20 million. There was a general 3 per cent surtax in 1986 which was worth $1.2 billion.
There was the temporary 5 per cent and 10 per cent surtaxes in 1986 which were worth $500 million. There was the increase on air transport tax in 1987 which was worth $45 million. There is the 10 per cent tax on long-distance calls and cable service in 1988 which is worth $945 million. I can go on, Mr. Speaker. This list totals over $22 billion in just three and a half years.
In March 1984 the Minister of Finance (Mr. Wilson) said we have to reduce government spending, that Canadians cannot afford any further tax increases. I wonder what the Minister was thinking about then. There has been $22 billion
in tax increases. I wonder what would have happened if he had said in 1984 that a small increase in taxes was needed.


Stanley J. Hovdebo: Mr. Speaker, I am pleased to have the opportunity to say a few words on Bill C-117, a Bill to amend the Excise Tax Act. This Bill is a catchup Bill. It is an attempt by the Government to catch up on a number of measures the Minister of Finance (Mr. Wilson) announced to the House over the three years he has been Minister of Finance. It includes part of his Budget of February 18, 1987, his White Paper on February 10, 1988, his White Paper on Tax Reform on June 18, 1987 and his White Paper on Tax Reform of December 16, 1987. All together, these make up the requirements of this particular Bill. It is an attempt to bring together all the suggestions he made at those times, suggestions that most Canadians have been paying for since early in 1987.
In light of the fact the Minister of Finance has given many indications of how he intends to bring in major tax reform, it appears he has missed the major opportunity for tax reform. The tax reform proposal was supposed to be in two parts. The first part was a change in the income tax structure and the second part, which will probably have to wait until after the election to be put in place, is the tax structure on value added tax or a general sales tax.
What we have here is an attempt on the part of the Government to increase taxes to some extent so that when it brings in the value added tax or the across the board sales tax, it will not be felt quite as much as it has been or it would have been had things been left as they were. It makes one wonder what would have happened. Are the increases in taxation since 1987 an indication of the type of tax reform we can expect after the next election? One wonders what we are in for.
The previous speaker gave us an indication of the total amount that had been collected from a variety of taxes that are in place today, ones which have been in place for the last three years. He gave a fairly detailed recitation of those increases in taxation. If those were the increases in taxation, then what are we looking forward to after this large tax comes in after the next election?
What the Government is doing here is putting in place some taxes which are an attempt to eliminate the deficit as much as possible. However, the measure is still aimed at getting as much money as possible out of that central group of people who are the main taxpayers in Canada.
By delaying the second stage of tax reform the Government is keeping in place a tax structure which is severely flawed, unfair and inequitable. That is how I would describe the federal sales tax and excise tax at the present moment.
Since 1984 the Conservative sales and excise taxes have escalated greatly. The previous speaker mentioned that $22 billion had been collected in three years. The Government
March 28, 1988

seems to be relying more on this type of regressive tax, which is a tax on an individual who is spending his money in many cases for necessities which he must have. The Government is depending upon these regressive taxes, these sales and excise taxes, to cover federal expenditures. The more the Government does this now and in the future, the more difficult it will be to revise the situation after the next election when the Government says that it will have this value added across the board sales tax.
As we have indicated in the House on many occasions before, the taxes which the Government has placed on the people of Canada in the past have amounted to approximately $1,400 per individual. In the Budget which the Minister of Finance brought down recently, he took a great deal of pleasure in telling us that the Government was returning $400 in income tax to the people of Canada on an individual basis. He neglected to tell the people of Canada that he had already collected $1,400 more, thus making the net result somewhere around $1,000 of increased taxes per individual since 1983.
I wish to go through a few of the main revenue raising items in this Bill. The first and probably the most discriminatory is the 10 per cent tax on telecommunications services such as telephone and telex services. This particular tax discriminates against the northern and the rural resident.
Mr. Speaker, as a resident of the City of Edmonton, you will know that surrounding the City of Edmonton there are hundreds of small telephone exchanges. In my home town, if I wish to call to the town 17 miles away, I have to make a long distance call. There are people in my community who send their children to school in a town which can only be reached by a long distance call. They live 40 miles from the city, but in order to reach that city they have to make a long distance call. If these people wish to conduct business, call their church, their doctor or their dentist, they have to make long distance calls. These are every day expenditures for people living in rural areas. They have lived with this situation for a considerable length of time. The Government has now chosen to place a 10 per cent tax on telecommunications services.
Every time a rural resident calls his doctor, his dentist or the school which his children attend, or even when he calls the grocery store to order groceries, he must pay a 10 per cent tax on that charge. You, Mr. Speaker, live in a fairly large city. When you call your dentist you do not have to call long distance. The same is true with respect to your children's school. Therefore this tax is a tax which discriminates against people living in rural areas.
However, people living in rural areas are not the most badly off when it comes to this type of tax. Those living in remote northern areas in particular are much more affected by the tax since a larger amount of money is involved. Since it is a percentage of the total, it asks that much more be paid into the coffers of the Government. It is not so surprising that the Minister of Finance has a tendency not to accept the recommendations sent to him by the Finance Committee. The
Excise Tax Act
Finance Committee recognized that there was a certain amount of discrimination in this particular suggestion. It recommended to the Minister that he at least put a cap on the tax. The cap suggested by the committee was a $3 cap. That would mean that the rural subscriber would pay only $3 each time he paid his phone bill instead of such higher amounts as might be collected now. This tax is probably causing the most concern among people across rural Canada.
A second increase in taxation is an increase with respect to the telecommunication programming services tax which has been raised from 8 per cent to 10 per cent. This measure was in the June, 1987 White Paper. This is a tax which is also paid across the board and which is regressive. If one only has a few hundred dollars coming in, such as an old age pensioner has, then one is paying a considerably larger portion of one's income to be able to watch TV or to have the cable come into one's house as compared to one who is earning money in some other way. Consequently, it is a regressive tax. People who are forced to pay it often do not have much extra cash to put out.
Again, in June, 1987, there was an increase on paint and wallpaper products from 8 to 12 per cent. This may have been an attempt to increase the amount of money received from construction across the country, but in small communities such as mine, it had the effect of increasing the price of repairs, maintenance, and construction of buildings.
We assume that every person in Canada has the right to hope at some time during his or her lifetime to own a home. In the West, particularly in the Prairie regions, that is the accepted aim of every family. Every time a tax is put on to parts of the construction for building a home it decreases the possibility of a family ever owning a home, and it also decreases the amount of times that they will be able to take maintenance action to keep the home up.
There has also been an increase in federal sales tax on beer, spirits, wine, and tobacco products from 15 per cent to 18 per cent, an increase of 3 per cent. Those products seem to get it every time. There has been an increase of 4 per cent in the specific excise tax and duty rates on tobacco products.
There has been an increase in air transportation tax levied of $4 per ticket. As I understand, that tax is aimed at trying to recover the greater proportion of the air transport program costs, the cost of running airports by the federal Government. It does run a few airports and it is attempting to get them off its hands as quickly as possible. Again, this has turned out to be a regressive tax to a certain extent. Because of seat sales, many people have been able to take advantage of air travel a little more than perhaps they have in the past. Each time they make one of those trips they are required to pay that extra $4. Sometimes that is enough to make them wonder whether it is worthwhile to do so.
Last, but not least in this particular list, is an increase in the excise tax on gasoline and aviation gasoline of one cent per

March 28, 1988
Excise Tax Act
litre. If this had been the only increase in tax on gasoline, perhaps it would not have been too difficult to accept. But this is approximately the fifth increase of tax on gasoline.
This is very regressive tax. Because of its size and the type of lifestyle we live, many people in this country are forced to drive to work. Because of those increases, they are required to pay that much more to get to work. One cent a litre does not seem like very much. But where it cost eight cents a mile to travel before, it has now increased a little. If one is travelling several miles a day to get to and from work, it is a major increase in the amount of money one has to spend to go to work. That is not the type of tax that is fair. It is a regressive tax. It has no relationship to the amount of money that is made. If a person is receiving the minimum wage of $4 an hour, or whatever it happens to be in a particular area, and that person has to drive 20 miles, he or she is paying the same for gasoline as the fellow who receives $50 an hour and drives the same distance. That type of taxation is unfair to those people who are the least able to pay.
That particular type of tax is the symbol of this particular Government. I remember back in 1979 the then Minister of Finance brought in a Budget which suggested an 18 cent increase per gallon on gasoline. The people of the country rejected it at that time. I guess that the Party learned something from that procedure, because this time instead of putting it all on at once, it put it on on five different occasions. If one adds all those increases up, that 18 cents is back on, and more besides.
This type of regressive taxation has become the symbol of how this particular Party, which is presently the Government of Canada, has a method to reduce the deficit and to carry out the administration of the Government. Rather than progressive taxes, which are levied on those people who can most afford to pay, to the greatest extent possible the Government uses regressive taxes. Those taxes are universal, are quite often on those items which are necessities, and consequently one cannot manage without buying. For example, if someone is driving to work, he or she cannot get along without buying gasoline.
The theory of federal sales tax is quite straightforward. The idea is that those sales taxes are supposed to be applied only once during the progress of a product from the manufacturer, or if it is a primary product, from the farm or forest through to the consumer. That is the theory. However, because of the structure that has developed over the years in the tax system in Canada, quite often we find ourselves paying taxes not only on the value of the product, but also on other taxes.
Although it is the intended aim of the tax suggested for after the election, sales tax or value added tax, it does not work in that manner at all times. For instance, at the present time if one buys a washing machine which might have been worth $200 at the manufacturing level, by the time it is taken out of the appliance store, it is $400 or even $500. Although some of that cost is due to mark-up, a good portion of that increase is
customs, excise, and sales tax. In most provinces the consumer also pays an extra sales tax.
The whole taxation approach is regressive. If the Minister had wanted to reform the taxation system, he would have done it on a global basis rather than on a piecemeal basis.


Mr. Gilles Grondin (Saint-Maurice):: Mr. Speaker, it is not with a light heart that I take part in this debate, but simply because I think it is important for Canadian taxpayers to know to what extent this Government has decided to increase radically several indirect taxes which sometimes can hurt more than direct taxes. It is also important for them to know that the Government has introduced this Bill somewhat belatedly. Most of the tax measures in Bill C-117 are already in force or will be in force within the next few days, while some others have been in force for over a year. We need only have a look at the measures which were announced in the February 1987 Budget which provided for a 12 per cent tax on candies, snack foods and ice cream, effective July 1, 1987, which have already generated $60 million in revenues during 1987-88.
There was also a 4 per cent tax increase on cigarettes and tobacco products which has been in force since February 19, 1987, and has generated for 1987-88 some $70 million in revenues. There was also an increase in air transportation tax of $4 per ticket which came into force on May 1, 1987, and August 1, 1987, which has generated, again for 1987-88, some $45 million in additional revenues. Finally, there is the usual sales tax on leaded gasoline compared with no lead gasoline which came into force on April 1, 1987 and has generated for 1987-88 $30 million in revenues.
Mr. Speaker, when we look at these new taxes, at how much Canadian taxpayers are being asked to pay in direct or indirect taxes, we have to wonder whether the Minister of Finance (Mr. Wilson) and the Prime Minister (Mr. Mulroney) were serious when they said certain things in this House. For instance, on March 6, 1984, the Minister of Finance said that, if the Conservative Party was elected, it would reduce expenditures and not increase taxes as they were already too high. After the Conservative Government was elected, on November 29, 1984, the Prime Minister stated that Canadians were already pouring a lot of money into Government services and felt that they were paying enough as it was. Yet, since the election of the Conservative Government, between 1984-85 and 1988-89, revenue from sales and excise taxes have increased by 77 per cent, personal income tax by 55 per cent and corporate taxes by 28 per cent. It is important to note that it is the taxes paid by individuals, that is personal income tax, as well as sales and excise taxes, which have increased the most, not corporate taxes.
As new tax measures were to be implemented, I would personally have preferred that, if the Government had decided not to reduce the national debt, it would at least implement
March 28, 1988

programs which might have helped to solve a few problems, such as those facing young Canadians.
One needs only to consider what illiteracy is costing the country to realize that if these new tax increases had been applied to programs geared to eradicate or diminish illiteracy, we might have looked at them more favourably. But, unfortunately, while illiteracy is costing us nearly $10 billion a year, the Government contributed practically nothing to counter that problem, and nothing indicates that the increases announced in Bill C-117 would go towards programs that could be established to fight illiteracy problems facing young people as well as any other Canadians.
Mr. Speaker, we see the same problem again with the homeless; the Year of shelter for the homeless has just ended and, unfortunately, there were not very many actions taken by this governement to solve the problems of the homeless in Canada.
We hear a lot about employment, about numbers, about the job situation in Canada, and much bragging is going on concerning the creation of a great many new jobs. However, even though these jobs generate additional revenues and reduce the need for unemployment insurance benefits, there is a lack of programs to counter the problems young people experience, for instance in the employment area. It is abnormal that young Canadians should continue to have unemployment rates of 13 per cent and more, when we could very well put up some programs with the additional revenues produced by the new jobs created due to an excellent economic growth which has benefited the Government. I am baffled by the fact that Canada's debt is not decreasing despite our very strong job-creating economic growth. I am deeply concerned over what would happen if Canada had to face a recession or even a period of economic stability.
I would have liked to see the Government maintain services offered by job placement officers on Canadian university and college campuses so that graduates could receive job offers from employers without leaving their schools ... The Government must maintain services it used to offer. Last year, however, there was a decrease of some 30 to 40 per cent in ongoing services provided on university and college campuses, and a so-called revitalization of services was announced this year while the active involvement of job placement officers on university and college campuses is still being reduced.
Of course, I listened to my hon. colleague from Chambly (Mr. Grise) and I would like him to explain, when he will have the floor, the Government's position on that issue. Unfortunately, I see that the time allocated to me has expired and I hope to have the opportunity to pursue the matter further with my colleague.


The Acting Speaker (Mr. Paproski):: The Hon. Member has 11 minutes remaining, plus 10 minutes for questions and comments.
Senate Reform
It being five o'clock, the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.



PRIVATE MEMBERS' BUSINESS-MOTIONS   THE CONSTITUTION

[Stage Direction]
SUGGESTED AMENDMENT FOR SENATE REFORM Mr. Paul Gagnon (Calgary North) moved:
That, in the opinion of this House, the government should consider the advisability of amending the Constitution as it relates to the composition of the Senate and to provide for the reform of the Senate through the gradual introduction of the following measures:
1.	Sitting Senators would retain their seats until their retirement, resignation or death, provided that any appointment to fill a vacancy would not continue beyond the date set for the ensuing general election in the Province or Territory for which the appointment is made;
2.	Senators appointed on an interim basis would step down at the time a general election is called in the Province or Territory which they represent, the vacancy to be filled by direct election held concurrently with the provincial or territorial general election. Any Senator retiring in this manner would be eligible as a candidate for the vacancy thus created; and
3.	Senators elected under this procedure would hold office for not longer than the duration of two legislatures of the Province or Territory which they represent, provided that they would be eligible as candidates for the Senate at ensuing elections.
He said: Mr. Speaker, this is a very simple, straightforward proposition which will right a past wrong. When Canada was created in 1867, the federal Government was bicameral: the upper House, the Senate and the lower House, the Commons. The Senate was to be appointed and the Commons elected. In 1867, that was legitimate. Time and social development have changed the situation. Appointment to political office is no longer legitimate. I would like to discuss a very venerable and integral institution of the Canadian Government, the Senate.
Motion M-81 proposes a solution which will effectively resolve any questions as to the Senate's legitimacy. In political terms, legitimacy has a synonym and that is election. Legitimacy is achieved through election.
In a representative democracy, the Members of any legislature must be held responsible to the electorate by means of periodic elections. Without this periodic endorsement by the people, any claim to reflective representation lacks both credibility and legitimacy.
How can the upper House, the Senate, legitimately perform its duties as a chamber of sober second thought when it might be necessary to take action that runs contrary to the will of the people as expressed by the House of Commons? The answer is that the Senate cannot legitimately perform its required duties.
[Stage Direction]
March 28, 1988
Senate Reform
In a representative democracy, legitimacy stems from responsibility and responsibility can only be achieved through direct popular elections. Jim Grey, a well-known entrepreneur, said:
That the Senate must be Elected is obvious. The present appointment of
Senators destroys the body's legitimacy. It is a farce. Only democratically
elected members are directly responsible to the people and, in the people's
name, can demand regional equity.
The value of the Senate is not in question. Canada's upper House is charged with the task of representing all of Canada from a regional perspective. That is an extremely onerous task. Canada is a country of regions and should therefore have some effective means of reflecting this politically. The Senate is the appropriate forum for this.
I advocate a gradual phase-in of elected Senators in order to allow for a smooth transition. Timing Senate elections to coincide with provincial elections provides the electorate with an opportunity to express its will as consistent with prevalent provincial sentiment. A senatorial term of two legislatures provides a check upon radical or whimsical electoral actions.
Because a Senator represents constituents on a provincial basis, it makes sense to tie the Senate term to the legislative term. A term of two legislatures ensures consistency in Government and prevents Senate effectiveness from being undermined by the possibility of frequent elections. This approach is in keeping with the parliamentary tradition of flexible terms. To set a rigid term of a predetermined number of years would be a radical departure from the principle of parliamentary supremacy.
What are the costs? The cost of electing Senators would be negligible. All I am asking is that a second ballot for each voter be printed. The cost of enumeration would already be covered. The cost would certainly be minimal and is no obstacle to this approach.
I might point out that even the Liberals would like to see an elected Senate. A resolution presented and passed at their 1986 convention resolved that the Canadian Constitution be amended to replace the current appointed Senate with an elected upper Chamber.
This motion provides the opportunity to give the Senate the legitimacy it requires to fulfil its mandate. The regionally representative role of the Senate has been given consideration. So too has parliamentary tradition and consistency. This is a valid and appropriate solution to the unresolved problem of an appointed Senate.
I am asking that as a vacancy appears in the Senate, the normal procedure be followed. The Prime Minister (Mr. Mulroney) would appoint a Senator until the province or territory concerned has its next provincial or territorial election. At that time, the appointed Senator would step down and an election would be held in conjunction with the provincial or territorial election at which time the Senator would be elected for two terms of the legislature of the province or territory. It is a very straightforward, inexpensive, economical
way to give legitimacy to an institution of Canada which sorely needs it. I look for Hon. Members to carry on and support this motion and this important endeavour.
Mr. Rob Nicholson (Niagara Falls):: Mr. Speaker, in discussing the motion sponsored by the Hon. Member for Calgary North (Mr. Gagnon), I believe it would be useful to consider the role of other second Chambers. I am thinking particularly of Australia which has had an elected Senate since 1901.
As all Hon. Members know, Australia, a sister nation in the British Commonwealth, also combines a parliamentary system of Government with federalism. The fathers of the Australian Constitution provided for an upper House significantly different from our own. The Australian upper House was intended to ensure that state interests would be taken into account within the national Government.
Historically, the Australian Senate was key demand of the original six Crown colonies for agreement to the creation of the Commonwealth Government in 1901. I suppose in that sense, it was not too dissimilar to the meetings that took place prior to confederation in Canada. Sir John A. Macdonald said that agreement on the composition and powers of the Canadian Senate was absolutely essential to the agreement that produced the British North America Act. To that extent, the Australian and Canadian experiences with upper Houses are somewhat similar.
During the National Australian Convention of 1897-98, the less populated colonies wanted a Senate which would protect the rights of the new states and prevent any unfair distribution of revenue. Delegates of small colonies like Tasmania feared that the new federation would be dominated by the representatives of more heavily populated areas such as New South Wales and Victoria. To combat this possibility, they successfully secured equal representation in the Senate for each state, regardless of population.
The Australian Senate originally consisted of 36 Members, six from each state, but by the Representation Act of 1948, the membership was raised to 60. As a result of further amendments made in 1983, each of the six states returns 12 Senators and there is also provision that the territories of Australia return four Senators for a total of 76.
The Senate is a continuous body, each Senator sitting for six years, but the mandates of the Senators are staggered so that elections for half the seats are held on June 30 every third year. For election of the Senators, each state forms a single constituency. The term of territory Senators is tied to the life of the House of Representatives, which is normally three years. There is no rotation of the territory Senators as in the case of state Senators. Since 1949, Senators have been elected on the basis of the single transferable vote system through lists drawn up by Party executives. In contrast, the House of Representatives operates under the alternate vote method, known in
March 28, 1988

Australia as preferential voting, in single Member constituencies. Each adult citizen is a voter and any person eligible to sit in the House of Representatives can seek election to the Senate.
If the place of a Senator becomes vacant before the expiry of his term, the Houses of Parliament of the state concerned may in joint session elect a person to fill the vacancy for the remainder of the term. If the state Parliament is not in session, the State Governor may, with the consent of the state executive, appoint a person who can retain the place until the expiration of 14 days after the beginning of the next session of the Parliament of the state, or until the election of a successor, whichever first happens.
After the adoption of proportional representation in 1949, it became conventional practice that Senate vacancies be filled by Members of the same Party as their predecessor. A significant exception to this tradition occurred in 1975 when the New South Wales and Queensland anti-Labour Governments elected non-Labour representatives to fill Labour vacancies. Not such a bad idea. In any case, this turn of events contributed to the crisis of November 21, 1975. However, as the result of the 1977 amendment, the Constitution now requires the observance of the former practice.
Has the Australian Senate fulfilled initial expectations? As with any question such as this it depends on who you ask. There is considerable controversy there on the value of the Senate. The object was to allow the states to be represented for the purpose of protecting their constitutional rights against attempted federal invasions, and to give them every facility for the advocacy of their particular special interests. However, the democratic method of election of Senators has prevented state particularism from becoming all important at the time of election. Elections to the Senate have been fought on a Party basis and the national Parties have not adopted narrow state programs.
The national character of each Party has been evident in its election manifesto and actual working. The fact, however, that Senators are elected from state-wide electorates by the same voters as for the House, and that Senate candidates are selected from Party lists, give the respective Party machines significant control over the fortunes of individual Senate candidates. Members elected on Party tickets and Party discipline dominates the Chamber. Even though elected, therefore, the Australian Senate also suffers from the charge that it fails to be responsive to the public at large. Individual state Governments, rather than the Senate, now act as the principal advocates for their regions. To that extent, it is very similar to our experience. Our Senate was originally designed to protect the interests of individual provinces but in our system of federal-provincial co-operation we see that role being taken over by the provincial Premiers.
Senate Reform
There are good reasons why we would not want to move toward the elected experience. I think it is the experience of many of us who have sat in Parliament that things already move too slow. This Parliament does not move quickly enough to solve some of the problems Canadians face. I can only suggest that an elected Senate would compound the problems we are facing. One has only to look at the situation in the U.S. and its different levels of Government. It takes years, and sometimes it is impossible, to move legislation through the three different levels of Government. Why? Because each part believes, being democratically elected, they have the right to have input on every piece of legislation. Regardless of the merits of the American system, it moves very slowly so I would have great difficulty with an elected Chamber.
The situation this Government faces is very clear. Whatever mandate the Senate has, it is very slim. There are many people in my constituency who believe if there is any reform, it should be very simple: Abolish the Senate. This is the democratically-elected Chamber here, this is where the decisions affecting all Canadians should be made, not down the hall in the Senate. When I go home to my constituents and they ask why we do not have a refugee law in place I tell them the truth. I say that the problem is down there with a bunch of individuals who are not elected and not responsible to anyone but themselves. They are the ones who are holding up a proper common sense approach to refugee determination.


Some Hon. Members:: Hear, hear!


Rob Nicholson: That is where the blame lies. I can only worry when we say we should give more power, more legitimacy to that Chamber. I can only reflect on the experience of the last three years and say this is something which I believe, with all due respect to the Hon. Member, should be rejected by this House.


Ms. Pauline Jewett (New Westminster-Coquitlam):: Mr. Speaker, while I wanted to get up and say that I would like to be able to agree with my friend from Calgary North, I cannot agree with him and also with my friend from Niagara Falls at the same time. My inclination is to agree with literally every word he said. It almost makes it unnecessary for me to speak at all.


Some Hon. Members:: Go ahead.


Pauline Jewett: All right. I wanted to elaborate on a few points he made.
The experience in Australia is perhaps the most relevant. It is certainly true that the Australian Upper Chamber has not been primarily a place for regional interests to be heard. In fact, the Chamber is based on Party lines, as it should be in a democracy. It is within the political Parties themselves that we should find regional interests being expressed and dealt with. Indeed, in a two or more Party system it should primarily be through the Party system that we realize all our concerns, and certainly our regional concerns. If a Party fails to deal with the

March 28, 1988
Senate Reform
most significant and substantive regional concerns, then it will itself fail. It will not be very long in the position of earning a majority in this country.
The panacea of an elected Senate is just that. It does not deal adequately with the problems it is supposed to deal with, namely those of regional concerns. One is therefore led to ask, as did my hon. friend from Niagara Falls: Why a Senate at all?
A very important development has taken place in the last two or three years so far as the House of Commons is concerned. That development is the committee system. A lot of the talk about having an elected second Chamber came about because it was found that the House of Commons did not sufficiently address the regional and other concerns of this country, and the committees of this House were simply pale reflections of the House itself. They did not have very much clout or very great concern for the issues being debated in the House. Therefore, it was thought that an elected second Chamber would do some of the work which the House of Commons is not doing. I think it was that more than the so-called sober second thought which gave some impetus, until the last two or three years, to the idea of having an elected Senate or having a second Chamber at all.
However, because we have seen significant improvement in the role of the committees of this Chamber in addressing major issues; in quite drastically, in some cases, changing government measures, often by all-Party agreement; in taking initiative in legislative and policy-making fields which committees had not taken until the reforms were implemented; in giving expression to regional concerns; and in getting more clout, we have, in fact, developed our chamber of sober second thought within the committee system of the House of Commons. It seems to me that that gives added argument to those of us who believe that a second chamber is obsolete and unnecessary, whether elected or appointed.
As I mentioned, it should be primarily the various political parties which address regional and other issues. It should be incumbent upon parties to recognize the diversity within Canada and to shape policies which will meet the gravest concerns in the regions of the country as far as federal jurisdiction is concerned. Next to the parties, it should be the role of Cabinet to bring regional problems to the attention of others in Cabinet. It is also the role of federal-provincial conferences to do so and also the role of the House and, in particular, committees of the House.
We do have, therefore, the vehicle-the Party system, the parliamentary system with a strong House of Commons, the growing strength of the committees of the House of Commons, the Cabinet, and federal-provincial conferences. We have a number of instruments nowadays to attempt to understand and meet the concerns of all the regions of the country. We do not need a second chamber to do that for us.
In British Columbia I find that there is not all that much excitement about having a second chamber. Indeed, there is very little. There is not a great interest in having an elected second chamber nor in having an appointed second chamber, although in some ways that is found to be preferable if we must have a second chamber at all. I have always found that British Columbia wants a strong voice in Cabinet, a strong voice in committees, a strong voice at federal-provincial conferences, and a strong voice in the bureaucracy and the boards and commissions of the country.
We often find that a board or commission such as the CRTC or the Canadian Transport Commission will go for years at a time without any voice from British Columbia. A lot of important decisions are made there. This goes back to W.A.C. Bennett's arguments of many years ago in which I think there is a lot of merit. B.C. has been overlooked often simply because it does not have a voice in the various boards and commissions which have become so important in our central government.
Neither does British Columbia have an adequate voice in the bureaucracy. People come from British Columbia and serve in the public service, but Ottawa has a terrible tendency to socialize people into an Ottawa perspective. We must have changes made in the bureaucracy itself and have more flow from the centre to the regions and back. That would be an answer to some of our regional discontent.
To conclude, Mr. Speaker, there are ways which exist now in Cabinet, in Parties, and in the committee system of the House to address regional interests. There can be new ways to address regional consent. We can strengthen their representation on boards and commissions, make the bureaucracy itself more sensitive to the regions, and inform the decision-makers and those just below them of what is happening in the country. If I may speak for a lot of British Columbians, those answers are far more desirable than the motion before us today or any other motion suggesting that an elected Senate is somehow going to meet the real problems of the regions of the country.


Mr. Claude Lanthier (LaSalle):: Thank you, Mr. Speaker, for giving me the opportunity to rise on such an important subject.
As my colleague mentioned her regional concerns, it is my pleasure today to express our regional concerns in Quebec by informing you of a resolution that was passed unanimously yesterday at an important meeting of the Progressive Conservative Party of Quebec where it was proposed that the abolition of the Senate-


Don Boudria: Shame!


Claude Lanthier: Shouts of "shame" are now coming from the Liberal side, where "red" protectors are watching ... The destiny of the Liberal Party is being looked after way ahead of time.
March 28, 1988

Mr. Speaker, we voted in Montreal in favour of putting the abolition of the Senate on the agenda of the next Meech Lake round of talks with the provinces. You may be assured, Mr. Speaker, that not only the issue of an elective or non elective Senate, but the very existence of that institution, is the subject of discussions in the province of Quebec.
The Senate reform has thus become more and more a matter of concern with Canadians in general and Quebecers in particular, and also with an increased number of Parliamentarians considering the number of resolutions tabled under our Standing Order 36. And there is nothing wrong with that, Mr. Speaker. Since in the name of democracy, we, in the Elouse of Commons, an elected body, should neither be directed, nor impeded, or even delayed by, as our Prime Minister put it, a group of non elected Senators who feel nostalgia for power.
Mr. Speaker, in fact, there is every indication that Canadians will increasingly hear about the reform of our upper Chamber and that they will have to make decisions about that in the years to come.
Our colleague, the Hon. Member for Calgary-North (Mr. Gagnon), is proposing today that we decide on the advisability of amending our Constitution as it relates to the selection process of members of the Senate so that it becomes an elected Chamber. We can say right away, Mr. Speaker, that it would be a clear improvement. According to him, the senatorial elections would take place together with the provincial elections, and the Senators would sit during no longer than two legislatures in their respective provinces and not until they reach the maximum age of 75 years old as some who have sat for 40 years, completely cut off from the realities of life and knowing nothing outside the Parliament and the Senate here, in Ottawa.
For example, Mr. Speaker, I have myself had the opportunity to invite a Senator, the Senator of my region, to attend a symposium in my riding. And the Senator for the region whom I contacted admitted very candidly that he did not remember being Senator for my region. Nevertheless, he had been Senator for that region for five years.
Therefore, Mr. Speaker, you can be sure that all Senators should be in closer touch with their constituency; they should at least have the decency to keep in touch with their constituents, even if they are appointed rather than elected.
In joining those who favour an elected Senate, the Hon. Member for Calgary North (Mr. Gagnon) is siding with an increasing number of Canadians, and probably with the majority of Albertans. He is therefore not the first, as you may well imagine, to define a specific proposal aimed at implementing the principle of an elected Senate.
Let us now look at some of the proposals which have been made over the years.
In 1981, the Canada West Foundation recommended that senatorial elections take place at the same time as every election of the House of Commons and that elected Senators
Senate Reform
be allowed to hold office during two legislatures. To support this recommendation, here is what the Canada West Foundation stated, and I quote:
The reasons for considering direct election flow, not from any alleged tidal wave of democratization to which we must automatically yield, but from the practical and immediate implications of election. An individual who holds his position because he has been elected to that position has a clear and unambiguous mandate to represent those people who elected him ... Election for a limited term implies a clear and direct accountability to those voters at the end of that term. The result of the combination of these two factors is legitimacy.
An elected Senator would possess a clear mandate for speaking out on behalf of his region, and a leverage for achieving concessions that would not rest on personality, fortuitous circumstances, or political convenience.

Mr. Speaker, this 1981 proposal also recommended that provinces get equal representation in the Senate. This, I believe, is the oldest proposal which people talk a lot about today. In another background study released in March 1987, the Canada West Foundation reiterated its proposal for a triple E Senate.
In 1983, the P.E.I. Government, then lead by a good Progressive Conservative Government, also proposed to elect the same number of senators from each province through a process similar to that used for members in the House of Commons.
Mr. Speaker, many people want an elected Senate and as many want the Senate simply abolished but everybody agrees that this old institution hinders the smooth running of the Government. I think this motion should be rejected.


Don Boudria: Mr. Speaker, thank you for putting an end to this speech.
I would also like to participate this afternoon in this debate on motion M-81 introduced by the Hon. Member for Calgary North (Mr. Gagnon).

I carefully read the proposal of the Hon. Member for Calgary North (Mr. Gagnon) in his motion. I must say that there are a number of measures which I can wholeheartedly support.
As a matter of fact, I would draw your attention to a speech that I made in the House on May 17, 1985. At that time we were talking about constitutional reform. Let me quote what I said at that time, as it appears at page 4890 of Hansard:
In order to reflect the principle that our Senate must represent provincial interests, I believe that Senators should be elected at provincial elections. While that may be a somewhat unusual way of proceeding, what better occasion is there to assess the provincial mood of an area than during the provincial election campaign? Why not elect one-half of the Senators at every provincial election, assuming that we had the same number of seats in the Senate that we have now in each province? I recognize that there has to be reform there. However, for the purpose of debate, let's assume that we have

March 28, 1988
Senate Reform
the same number of seats that we have in each province. The greatest number
of Senators that could be changed at any one time would be 12.
I went on to say:
With only one half elected in every provincial election, a maximum of 12
would change at any one time, if all Senators were defeated within that
province, which is somewhat unlikely. There would be insured continuity.
That is what I said on May 17, 1985. To that extent, I agree with my hon. friend from Calgary North. As a private Member, who is not stating a Party position, I agree with some of the proposals made by the Hon. Member for Calgary North.
I do not know where he got his idea and if I happened to contribute to it, I am pleased to have done so. If we have similar ideas, that is even better. Perhaps we can start a movement.
The only difficulty I have with the proposal in the Hon. Member's motion is that for a short period of time there would be three and possibly four different kinds of Senators. There would be elected Senators, those appointed to finish the term until the next provincial election, the existing Senators and the so-called lifers, of which there are some six left.
However, like everything else, if we are going to reform the institution and want it to progress, perhaps that phasing in process would help to achieve Senate reform.

Mr. Speaker, it was with amazement, to say the least, that I listened to the speech made by the Hon. Member for LaSalle (Mr. Lanthier) in the House, that is the speech he has read, for it was prepared by God knows who. Yet, Mr. Speaker, that speech, delivered by the Member for LaSalle, but prepared by God knows who, was lacking something. First, the Hon. Member for LaSalle seems to have forgotten about his own party. We should remember that in 1979, the Conservative Party was elected in this country. Unfortunately, that government suffered from a specific deficiency; one could say that it suffered from several deficiencies because it has not survived for very long, but it suffered from a specific deficiency at that time, and that is the lack of representation from Quebec in the House of Commons.
Because of this particular problem, the Prime Minister found it difficult to fill Ministers positions in his Cabinet, due to the fact that there were only two Quebec Conservative Members. One of the two founding nations of this country was represented in the Cabinet by only two people or a maximum of two assuming that both would be appointed to the Cabinet.
I think there was a serious deficiency there. To solve this problem, the Prime Minister decided to find in the Senate some high calibre Quebecers, who could represent Quebec well in the Cabinet, and he went and picked for example, the Hon. Member for Berthier-Maskinonge-Lanaudiere (Mr. de Cotret) who was then a Senator. He picked a few others including Senator Asselin, and in that way the Prime Minister managed to give Quebec some representation, I would not say a fair representation because they were not in sufficient
number, but at least he managed to a certain extent to make up for this deficiency.
A little later, in 1980, the Liberal Government too had similar problems elsewhere in this country in the sense that Western Canada did not elect Liberal Members. So the then Prime Minister appointed Senators from the West to sit in the Cabinet.
This, I think, Mr. Speaker, clearly demonstrates the need for a Senate in Canada. But obvioulsy, we must reform the present procedure for choosing Senators. There is definitely a need for improvement. Personnally, I am sure that if Canadians had to decide right now how Senators should be chosen the Senate would be completely different from the one we have, in the sense that Senators would not be appointed for life. And I say this whether they are Liberal, Conservative or independent. The fact is that we need a higher Chamber in our Parliament.
Every single country in the western world that I know of has a bicameral national legislature. There is this chamber of sober second thought, be it in the United States of America, France, Great Britain or most other jurisdictions. There is a necessity for having that for two reasons; first, to ensure a continuity in one of the two legislative Chambers, and second, to give that sober second thought. I think, in spite of the disagreement of some of our New Democratic colleagues, that has a value. It does not mean that there has to be life permanence in order to have sober second thought. One could achieve that with less frequent elections, phased elections, and so on, in the way I have described and in the way the Hon. Member for Calgary North has suggested to us.
However, we cannot pretend we do not need it at all and have the kind of ridiculous proposition we saw over the weekend where the Quebec wing of the Conservative Party, for instance, decided we would abolish the Senate and the Minister of Employment and Immigration (Mr. Bouchard) had to intervene in the debate and say: "Boys and girls, we cannot do this at the present time because that would contravene the Meech Lake Accord". So everyone said: "We cannot do that, but let us pretend we are going to do it at the next round of constitutional amendments". Their position was then revised. They would do it next time, not this time, and suddenly that made the project, in the view of certain Quebec Conservatives, a little more palatable.
Whether one wants to breach the Meech Lake Constitutional Accord or not in order to achieve this is, as far as I am concerned, not the right way to go about it. I think the idea proposed to us by the Hon. Member for Calgary North is a good one. Undoubtedly, it needs some work. Most ideas do, for that matter. But I think he has a far better idea than what was proposed to us by the Hon. Member for LaSalle (Mr. Lanthier).
March 28, 1988


Mr. Charles Hamelin (Charlevoix):: Mr. Speaker, this motion introduced by the Hon. Member for Calgary-North (Mr. Gagnon) has obviously some merit but it should lead to a quick solution. The Senate reform issue has been under discussion for a long time and our First Ministers agreed to discuss it thoroughly at the next meeting on the Constitution.
Looking at the issue of the Senate in 1988, one has to ask a number of questions. In the distant past, we were commoners, just lowly people elected to the Commons and there was another Chamber, the very select Senate, whose members were a little more educated and in a position to correct mistakes made by humble commoners. Things have changed quite a bit since then. In the old days, regional concerns were the main factor defined in Canada. Senators had to protect the interests of the provinces, of minorities and they were supposed to voice regional concerns. The big question that should be asked of Canadians, the only truly significant one, a question that would be really difficult for anybody to answer is this one: Can most Canadians tell me the name of their Senator, Mr. Speaker? Not too many people would be able to tell us the designation of a senator who has just been summoned.


Lise Bourgault: I couldn't.


Charles-André Hamelin: And I would be very much surprised to find someone who knows the name of his or her Senator. Some of the senators do not even know the name of their "diocese", and that is a fact.
Then of course the Parliament of Canada now has a greater number of Members. We have all kinds of information media, we have lobbies, we have new laws which make it possible for women's groups and minorities to have their say, so these days you simply cannot hoodwink Canadians right and left! First thing you know they tell their Members in the House what they should do.
So my colleague was saying: What a wonderful idea, a Senate! A potential reservoir of Ministers, a place to find election candidates, indeed a place where there would not be any real national Party with Members elected in all provinces.
Mr. Speaker, I would point out that the situation would be corrected if we had an electoral system based on proportional representation where we would be sure to have elected representatives from all regions. I would suggest that it is a very weak argument to claim that the Senate ought to be a retirement home in recognition of services rendered, because that is exactly what the Senate has become, a retirement home for people who have served faithfully.
Not so long ago every legislative assembly-including Quebec's-had its very own small Senate, its very own small upper chamber.
Mr. Speaker, nobody shed tears of blood or cried in desperation when we got rid of this perfectly useless Upper Chamber which was supposed to represent the aspirations of
Senate Reform
Quebec's various regions. Nobody cried when we did away with this non-elected Senate.
But let us admit that we preserve this institution and go along with the arguments of the Western and Eastern provinces which are in favour of the so-called "Triple E" Senate. I foresee already that the Premiers will have problems at the next Constitutional Conference. An elected Senate means a Senate with powers. But, for Heaven sake, which one? What will be the real problems of this elected Senate? Do you not feel already the confrontation which will oppose the two Houses? Will we have to deal with suspensive vetos, effective vetos in such and such areas, and this and that?
Let us talk now of a Senate with equal representation, say ten Senators representing Prince Edward Island and ten Senators representing Ontario. This creates problems.
Let us talk now about an efficient Senate. This stretches the imagination, Mr. Speaker! An efficient Senate! If the past foretells the future, we are faced with disaster. The notion of an efficient Senate truly boggles the mind!
I suggest, therefore, that this proposal which comes within the framework of the system has merit. But I suggest also that we should have a substantial debate, the only one we should have now to prepare the forthcoming Constitutional Conference and, as the Quebec wing said during the weekend, we should ponder at least once the need to maintain this "pensioners' House for services rendered".


Gordon Edward Taylor: Mr. Speaker, I want to congratulate the Hon. Member for Calgary North (Mr. Gagnon) for bringing in this motion. A Triple E Senate is strongly supported by the people in my riding. My motion on a Triple E Senate was shredded of the equality from each province and the election from each province and then sent to the First Ministers for consideration. This motion reopens the matter.
I support this motion for a number of reasons; first, the House of Commons does not answer the regional requirements. The House of Commons is based on population. As long as we can foresee there will be a greater number of Members from Ontario and Quebec than from the rest of the provinces, there is no equal consideration of regional matters. If we are going to have a Senate at all, there should be an equal number of Members from each province and territory so they can consider matters on a regional basis equally.
Second, there is no accountability in the present Senate. The Senators hold up Bills that we returned to Parliament to pass. These are Bills that the people want with respect to immigration. The Senators are accountable to no one. They simply do what they like. They ignore the public. This is a democracy. We are supposed to be doing what the people want. The Senate is not doing that.

March 28, 1988
Senate Reform
If Senators were elected and had to report back to the people who elected them then they would have to be accountable. I strongly support the accountability of people in the Senate. They must be elected. They should be elected. In this way they would have to go back to the people periodically to find out what they want and then be accountable to them.
If we do not have an elected Senate with equal representation from each province and if Senators are not accountable, then we are simply wasting public money. Today the Senate is wasting public money by ignoring the wishes of the people by refusing to pass legislation that has been passed by the House of Commons.
I support the motion.


Mr. Morrissey Johnson (Bonavista-Trinity-Conception):: Mr. Speaker, I thank you for the opportunity to take part in this very timely debate this afternoon. It is appropriate that we should be discussing Senate reform given the historical constitutional events that have taken place during the past years.
As all Hon. Members of the House know, at Meech Lake last April 30 First Ministers took an important step in strengthening the federation by reaching unanimous agreement on bringing Quebec into the Constitution. On June 3 that agreement was formalized as a constitutional Accord.
As part of the Accord First Ministers also approved an entrenched second round of negotiations aimed at fostering further constitutional development. In particular, Section 50(1) requires that a constitutional conference composed of the Prime Minister of Canada and of First Ministers of the provinces shall be convened by the Prime Minister of Canada at least once each year commencing in 1988. Thus we already have action taken by the Government and by the provinces to bring about Senate reform.
Among the items on the agenda to be considered at these conferences will be, as I have already stated, Senate reform, including the role and function of the Senate, the power of the Senate, the method of selecting Senators and representation in the Senate. As other Members have said I believe, too, that it is important that there be representation from all across the country that will represent the different regions according to their populations. I am sure that should be one of the functions of the Senate.
Under the Constitution Act, 1867, which is to be amended under the terms of the Accord, Section 25 of that Act would provide that where a vacancy occurs in the Senate the Government of the province to which the vacancy relates may, in relation to that vacancy, submit to the Queen's Privy Council for Canada the names of persons who may be summoned to the Senate. We all realize that those nominees must be acceptable to the Queen's Privy Council for Canada.
For the first time this will give to the provinces some genuine say in appointments to the Senate. I do not think that
there can be any doubt as to where the Prime Minister (Mr. Mulroney) stands on the seriousness of Senate reform. Last August 26 he said in the House that he would bring forward on behalf of the Government of Canada a comprehensive proposal to reform the Senate at the first constitutional conference. We can expect that to take place in 1988.
We must consider very carefully what should be the role and function of the second Chamber of Parliament. Before addressing specific matters such as the method of selecting Senators, the powers of Senators or the distribution of seats we must begin with a more basic question. What should be the principal functions of a reformed Senate in light of Canada's particular circumstances? I heard other Members say that we have sober talk and so on in the Senate.
In conclusion, since I know my time is running out, I feel confident that the Parliament of Canada will indeed play a major role as we begin to consider the proposals for Senate reform. In the meantime I suggest that we not get too far ahead of the process provided for in the Meech Lake Accord. I am sure that there will be broad debate and discussion on Senate reform as we approach the 1988 conference. I do not think that we should be premature. For the House to endorse today a particular proposal, whatever its merits, might be a wrong statement.


Mr. David Daubney (Ottawa West):: Mr. Speaker, in the few minutes remaining, I am pleased to take part in this debate. May I first congratulate my colleague, the Hon. Member for Calgary North (Mr. Gagnon) for introducing this motion.
I know that the issue of Senate reform is one which is of significant importance to western Canadians. It is of great interest in particular to the Hon. Member's constituents and to the people of Alberta generally.
As a former member of the Special Joint Committee of the House and Senate on the Constitution Act, 1987 I took great pleasure in hearing a great deal of testimony, particularly from western Canadians, on how important the issue of Senate reform is to them. They view it as a method of rebalancing what some westerners consider to be the imbalance of power that exists in central Canada.
It is important when one considers the distribution of Senate seats at the moment that one sees that there is in fact a regime designed to provide for the type of regional representation for which western Canadians and many Canadians are looking. Of course, one of the main purposes of the Senate when it was established by our Fathers of Confederation was to ensure that there would be provincial representation here in Ottawa. We have a breakdown of Senators on the basis of 24 from each of the four regions of the country, plus now we have representation from the northern territories.
As a Member of Parliament from Ontario I have some concern with the notion of equal representation by province. Representation by population is a fundamental tenet of
March 28, 1988

democracy and one which I would be hesitant to see withdrawn in the case of the Upper Elouse.


The Acting Speaker (Mr. Paproski):: Order, please. The time provided for the consideration of Private Members' Business is now expired. Pursuant to Standing Order 42(1) the Order is dropped from the Order Paper.



PROCEEDINGS ON ADJOURNMENT MOTION

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

[Stage Direction]
MIRAMICHI RIVER-GOVERNMENT POSITION/REQUEST FOR ASSURANCE ADEQUATE MEASURES WILL BE TAKEN
Lynn McDonald: Mr. Speaker, I am raising today an issue of very serious concern of environmental pollution in the Miramichi River area at the Domtar plant near Newcastle in New Brunswick, a situation I have raised in the House a couple of times without receiving any kind of a satisfactory answer.
We now know that the provincial Minister of the Environment for New Brunswick, the Hon. Vaughn Blaney, has decided not to allow the reopening of the plant in question, Domtar, which had requested permission to reopen in order to fulfil a contract given by the federal Government through the Canadian International Development Agency. This is a plant that had been known to be polluting in the area for a very long time.
There is a whole history that would take hours to read into the record. There were concerns of residents in the area regarding water, animals, and the long term cover-up on the part of environmental officials who were aware of the dangers created by toxins in the area, particularly pentachlorophenol, a substance used in the coating of wooden telephone poles. There is a very long history of this substance which is presently under review. It should not be used in any form in Canada. It is a substance which has been banned in other countries, notably in Sweden.
When I first raised the question, I received the answer from the Minister of the Environment (Mr. McMillan) that we were working with the company and that clean-up was going ahead. He then retracted that statement somewhat and said that the Government of Canada is riding herd on the company. We know that the Government has not been riding herd on the company. We know that previous Governments had not been riding herd on the company. Instead the files have accumulated showing disastrous results for residents and for workers in
Adjournment Debate
an area where workers in the same plant have died mysteriously early of diseases related to chemicals.
In 1969 the fisheries department wrote Domtar to say that the water was exceedingly toxic. In 1974 there was an internal memo at Environment Canada documenting the fact that the situation had been under review for five years, that the water was still toxic, and that the company was doing nothing.
In 1981 Environment Canada published a report that looked at dioxins around the plant and recommended that dioxin levels be determined in the water and sediments of the Miramichi River in the vicinity. This was never done. Terrestrial and aquatic plants growing in contaminated areas should be analysed to evaluate the dioxins. This was never done. A further recommendation that ground water be sampled to determine migration of dioxins was only done in 1987, and the results were only released last year. The testing was done by the company, a company obviously with an interest at stake. Environment Canada has done nothing here.
In 1984 Environment Canada performed more tests and found levels of two orders of magnitude higher of octa-dioxins, and background concentrations of dioxins were also found.
In 1988 Environment Canada held meetings with Domtar. Domtar informed Environment Canada of its studies into migrations of contaminants and plans for clean-up. However, requirements for the clean-up specifically have never been approved. Then we have the Government of Canada giving a contract to Domtar in order to go back into operation in an area in which they have not cleaned up the pollution in the first place.
Previous Governments-in the case of the federal Government, previous Liberal Governments; in the case of the provincial Government of New Brunswick, previous Conservative Governments-did not act at the time. We wonder if perhaps there had been action in time that jobs would not have been lost, residents would have been safe, the ground water question would have been looked at. We do not know if there were dioxins in the drinking water that people were drinking. The tests date back only to 1987. We do not know the quality of the water that people were drinking for all those years in the 1970s and early 1980s. If something had been done in time, it is possible that we would still have jobs there. The question, should we be sacrificing jobs for the environment and the environment for jobs, would not have come up.
Certainly, the right decision has now been made by the Minister of the Environment for New Brunswick. I congratulate him on making a tough decision. We cannot sacrifice the environment for immediate jobs. We know that the long term result of making that type of decision is loss of jobs, because it means even more serious problems. It means dioxins in fish, an impact on agriculture, and all of that means loss of jobs.

Adjournment Debate
My point here, Mr. Speaker, is that we have Creosote Road and Chemical Creek, and an extremely cavalier attitude taken by Governments at both levels over a long period of time.
Environment Canada and the Government of Canada has had between 1969 and 1988 to act. It found dioxins in water. It ignored recommendations to test the levels around the brook leading from the plant. It waited seven years for the company to test ground water itself, and did not do its own tests. It did not use the powers of the Fisheries Act to clean up the plant site. Ten years of pollution could have been avoided. The power is there. We have Environment Canada. Fisheries is federal jurisdiction. The opportunity to have acted earlier was there.
I hope that this will be a lesson to the federal Government that we need early, prompt action for adequate protection of the health of people in the area and the environment.


Mrs. Pauline Browes (Parliamentary Secretary to Minister of the Environment):: Mr. Speaker, the Domtar wood preservation plant, located near the Miramichi River at Newcastle, New Brunswick, has been in operation for over 60 years. The company began using pentachlorophenol in 1957 at this plant. Certain dioxins are known to be associated with pentachlorophenol, but the highly toxic 2,3,7,8-TCDD has not generally been believed to be one of them.
In 1981 Environment Canada undertook a study of the Domtar site to assess possible contamination. Dioxins were found in a ditch draining the site. A second study was conducted in 1984 which confirmed the presence of dioxins. Very low levels of 2,3,7,8-TCDD were identified. As expected, the predominant dioxin was octochlorinated dibenzo-p-dioxin.
The 1981 study report made several recommendations. Most of these have been carried out, including definition of the type of dioxin present in 1984 and installation of waste water treatment facilities in 1983-85. As a follow-up to this work, the New Brunswick Department of Municipal Affairs and Environment and Domtar undertook further site investigation in 1985 and in 1987. Additional sampling has confirmed that there is contamination of soil and ground water in the plant area.
The Department of Fisheries and Oceans determined the presence of dioxins in lobsters several kilometres downstream from the Domtar site. No trace of the more dangerous 2,3,7,8-TCDD dioxin was found in the lobsters. The results of this study were made available to Environment Canada in late 1987 and has underlined the necessity for a full evaluation of contamination from this site, as well as other possible sources of dioxin near the Miramichi River.
While we had recently been under the impression that a clean-up was imminent or under way, we have since been informed that only preparatory work with some excavation had been initiated at the site through last fall. The Domtar
March 28, 1988
company is now in the process of re-examining all relevant information in order to develop a more acceptable proposal for the clean-up of the site. This proposal must be satisfactory to the Province of New Brunswick and to Environment Canada. Meetings to address this remedial work are under way. The environment department expects to see a company proposal for clean-up this month.
The presence of dioxin in the Miramichi River is a complicated issue. A pulp and paper mill just up river from the Domtar site uses a bleached-kraft process. This process has just recently been recognized as suspect in the generation of dioxins. In view of this complication, Environment Canada is undertaking a study of sources of dioxin in the Miramichi River. This study will be part of a national study set in motion by Environment Canada to define the seriousness of the problem, with a view to seeking clean-up action on the part of any identified polluter.
Recent reports now indicate that Domtar is not going to reopen the plant. Nevertheless, the clean-up will continue. Fortunately, due to the foresight of Environment Canada and the Department of Fisheries and Oceans, the Miramichi problem will probably be defined earlier than most.


CANADA POST CORPORATION-CLOSURE OF RURAL POST OFFICES- PROVISION OF ALTERNATE SERVICES
Mr. Bob Corbett (Fundy-Royal):: Mr. Speaker, I appreciate having the opportunity to discuss further a question which I brought to the attention of the Minister responsible for Canada Post some number of weeks ago. It is with reference to the closure of post offices in rural Canada.
There is no question that all reasonable and responsible Canadians would support any measure which would make Canada Post more cost effective and cost efficient. Certainly I have stated in the House and in my constituency on numerous occasions that I will support any reasonable plan that will bring postal spending under control and will reduce the burden on the taxpayer.
In 1981, Bill C-42 came into effect, turning Canada Post into a Crown corporation. This took place for a number of reasons, not the least of which was the fact that in the Post Office, there were a number of people at the time and continue to be to this day who were concerned about labour. Labour unrest was profound and labour disputes were indeed many. It was also a fact that the Post Office had accumulated a tremendous debt load and it was a haven for political patronage.
These problems were well recognized prior to 1981. In the 1970s, the Hon. Eric Kierans was Postmaster General under former Prime Minister Trudeau's administration. He determined that indeed the fat should be trimmed from the Post Office. During that period of time, Mr. Kierans undertook to close down some 1,000 post offices in rural Canada without
March 28, 1988

any consultation whatsoever with the communities involved and with no explanation.
As a result of the postal plan, a substantial number of people from rural Canada are living in perpetual fear that their post offices will be the next to get the axe. Unfortunately, some of my constituents have felt this axe. Indeed, the little Village of Bloomfield is such a community. Bloomfield's service was taken away and has been replaced to date with supermailboxes. Up until this time at least, the residents have had to travel some 30 kilometres round-trip to receive even the most basic of postal services.
I do not think any reasonable person could object to Canada Post's plan when a postal facility should be closed for economical reasons or other circumstances like a post office being taken away from Canada Post by the landlord. There should be no disagreement with this or major concerns on the part of the community when Canada Post agrees to provide alternate services such as counter services. Unfortunately, this has not always taken place.
Although Canada Post has often promised to provide better service, the fact is that many people in rural communities where post offices have been taken away feel as though they have been victimized by Canada Post. Better service has been promised but in fact this has not taken place. We feel that there is an obligation on the part of Canada Post to ensure that before the promised new services are implemented, the opportunities and agencies for implementing the services should indeed exist.
We find that Canada Post often refers to meaningful consultation, and this has taken on two meanings. Canada Post apparently believes that meaningful consultation is something that takes place when Canada Post officials explain to the residents of a community what services will be taken away from them. The residents believe that meaningful consultation means that they will have an opportunity to say no to the removal of those services. Clearly, meaningful consultation has not been defined, and that is something that Canada Post should undertake to do.
We feel that better service should be the criteria when postal facilities are taken away. When I say we, I mean Members from rural Canada. Many of us believe that the availability of retail services should be ensured when Canada Post takes existing services away. If alternate services cannot be assured, then indeed plans should be shelved and postponed until alternate services are indeed in place.
In summation, I would suggest that the Crown corporation and all rural Members of this House should ensure that rural Canada is treated fairly in all aspects and not left behind in
Adjournment Debate
our changing society. I would encourage Canada Post to undertake that very seriously.


Lise Bourgault: Mr. Speaker, first, I would like to take this opportunity to underline the many representations the Hon. Member for Fundy-Royal (Mr. Corbett) has made to the Canada Post Corporation.
My colleague referred to the service alternatives. Mr. Speaker, the Canada Post Corporation has assured all Canadians, and the Minister responsible for Canada Post can guarantee that this will continue to be the case, that the postal service is a guaranteed service and that every Canadian must be able to receive and post his mail.
I should remind the Hon. Member that we have made a commitment and that there can be no change in service before there has been consultation with the community, the citizens involved and the Members of Parliament.
Naturally, we are all somewhat reluctant to accept changes. However, the Canadian society is changing, and when we analyse what is going on in the Canada Post Corporation, we find that the way of life of many people has changed and the postal service no longer meets their needs.
When a post office must close, it is because the person who provides the service has informed Canada Post that he or she is resigning, retiring or wants to get out of the business.
This is what happened in Bloomfield Station, Mr. Speaker. There was an announcement that Canada Post was planning to look at alternative methods to serve the 50 families who had been deprived of the postal service for some time. Attempts have unfortunately been unsuccessful because, I think, quite a tight campaign led by the union prevented that type of service from being offered. Superboxes were installed. Naturally, they provide ideal service, twenty four hours a day. You can go and pick up or send your mail any time it pleases you.
Of course, not long ago, as my colleague is no doubt aware, the Corporation concluded an agreement with Bloomfield Varieties store to install a retail sales counter. I point out that there is a significant improvement of the service in Bloomfield Station.
I want my colleague to know that according to what I have been told there are only 9.1 kilometres between Blomfield Station and Norton and 12 kilometres between Bloomfield and Hampton. 1 was surprised to hear him say the distance was about 30 kilometres. I would like him to tell me if it is so.
In conclusion, Mr. Speaker, I want to assure all Hon. Members that the Minister responsible for Canada Post Corporation is doing everything he can to have acceptable and profitable postal services maintained for all Canadians.

March 28, 1988
Adjournment Debate


NATIONAL REVENUE-PRINCIPAL GROUP BANKRUPTCY-
[Stage Direction]
PAYMENT OF TAXES BY INVESTORS/REQUEST THAT DEMANDS FOR PAYMENT OF TAXES BE STOPPED
Simon Leendert de Jong: Mr. Speaker, I rise today to elaborate further on a question I posed to the Minister of National Revenue (Mr. MacKay) last Tuesday. It concerned the actions of Revenue Canada in taxing those investors in the Principal Group, financial institutions which went into receivership last June.
The Government is attempting to collect taxes on interest which those investors and depositors would have earned but, in many cases, never actually saw. There were a variety of investments and types of deposits involved. Some were on an accrual basis and some had received their interest but it was left in deposits or rolled over into new investments.
It seems to me that there is unfairness here. Many of these depositors are older, retired people who had deposited all of their life savings in these institutions. Many of these people are without means. For the Government to ask them to pay taxes on money that they never saw is, I think, unfair.
I suppose that within the strict confines of the Income Tax Act bureaucrats would say, as the Deputy Minister of National Revenue is reported to have said, that the fact of the bankruptcy of an investment company is no excuse. That seems a little hard-hearted. I think it is basically wrong that the Government is attempting to collect taxes on money which people never received.
I recognize that there are some problems with this case and the Government will have some problems changing some of the rules and regulations, but it needs to be done in terms of fairness.
In the last few years we have seen various financial institutions go bankrupt. People have lost their money, especially those who are not fully covered by the Canada Deposit Insurance Corporation. I think there should be some special provisions in the Income Tax Act that taxes to be paid on interest earned before the institution went bankrupt be deferred until the company is properly wound down and the investors know how much they will recoup. If they recoup their interest as well as their original investment, the Government should tax at that time.
There are many instances of deferral of taxes in this country. The common estimate now is of some $20 billion in deferred taxes. It would certainly be fair if the Government did not proceed to attempt to collect taxes on interest earned which the investors never received.
For the Government to say that eventually the investors will get back the money they pay in taxes is beside the point. It will take at least two or three, and perhaps four or five years before the company is properly wound down and the investors know
how much they owe or how much the Government will be able to pay them back. As I mentioned before, many of the investors and depositors are older, retired people on fixed incomes who cannot afford, in essence, to lend the Government money now which they will get back in three, four, or five years.
The responses which I have received from government Members and which my Leader received on Wednesday encourage us to hope that perhaps this week the Government will announce that it has found a way to ensure that these people will not have to pay these taxes. I hope that when the Government's spokesperson responds to my presentation this evening she will have some good news for us all.


Lise Bourgault: Mr. Speaker, I wish to make a few comments regarding the fiscal implications of the Principal Group failure. It has been said, among other things, that taxpayers would have to pay tax on income from interest they never received.
Allow me, Mr. Speaker, to say that those individuals who elected to use the cash accounting method and did not receive interest payments, paid in cash or credited to their account before it was blocked, will not have to pay tax on accrued interests. However, those who did receive interest payments, paid in cash or credited to their account, will have to include that amount on their income tax return. They are required to do so by the existing Income Tax Act and the Minister of National Revenue, for his part, must enforce the Act.
On the other hand, people who have calculated their revenue according to the accrual method of accounting and whose investment contract with the Principal Group had not expired when it was frozen will be allowed, once the whole matter is settled, to deduct an amount not exceeding the interest already declared.
Present legislation provides a certain relief for taxpayers in that situation, depending on the circumstances.
We are nevertheless deeply concerned about the difficulties facing some investors. Some of them could indeed lose a big part of their capital and they realize that they have a tax obligation regarding the interest reinvested in the Principal Group.
So you will certainly understand that it is a very complex situation resulting from the collapse of a group of companies with a complex structure and widespread ramifications. Although the questions put in this House are straightforward, the problem is not. The officials of National Revenue-Taxation and of the Finance Departement are compiling facts and evaluating the implications of certain means of providing relief. Meanwhile, both departments are working together on that subject, examining which means might be appropriate in the circumstances. And I can assure the Hon. Member that a response is indeed forthcoming in that case.
March 28, 1988


The Acting Speaker (Mr. Paproski):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 11 a.m., pursuant to Standing Order 3(1).	Adjournment Debate The House adjourned at 6.27 p.m.

Tuesday, March 29, 1988


[Stage Direction]
Prayers