1989-05-05

Mr. Dave Dingwall (Cape Breton-East Richmond) moved:: That, in the opinion of this House, the claw-back proposed by the Minister of Finance with regard to the Old Age Security pensions and Family Allowances (1) undermine all Canadian social programs; (2) make easier future incursions against Old Age Security pensions and Family Allowances as well as other social programs, including medicare; (3) will fall most severely on Canadians of moderate means while costing the wealthy little; and That this House, therefore, condemn the Government for this attempt to violate this sacred trust.
He said: Mr. Speaker, I rise today in opposition to the items contained in the recent Budget of the Minister of Finance (Mr. Wilson) as it affects some of the most important social programs in Canada. There has been a long and indeed important history associated with the social programs which have developed over the years in this great country. Successive Governments have tried to deal with those particular programs and where they could, they embellished upon them, and in doing so, they have brought many benefits to Canadians, Canadians in every region, Canadians in every community, rich and poor, young and old alike.
The social programs of the Old Age Security and family allowance are an integral part of Canadian life. To suggest that they are merely social programs providing a benefit to a select few is really missing the point in its entirety. A policy of good social programs such as I have referred to is also good economic policy. There are countless Canadians who have young families and there are countless senior citizens who look forward on a regular basis to receiving the generosity of the Government of Canada.
I have said in many quarters, and indeed, during the most recent federal election campaign, that for many senior citizens, their Old Age Security cheques provide the only sense of dignity they have. There are women, men and couples who have relatively limited income, but the Old Age Security in itself allows them to exercise their wishes and to live in dignity.
What is dignity? Dignity to a woman of 67 years of age may in point of fact mean receiving her Old Age Security cheque and thereafter purchasing items for family members. It may mean a trip to another part of the country to see a loved one. It may also mean paying for a telephone call to someone somewhere else in Canada.
That is the significance of that program which touches many Canadians, but this particular Budget proposes that high income taxpayers repay Old Age Security pensions and family allowance benefits through the tax system at a rate of 15 per cent of individual net income exceeding $50,000. The universal nature of these programs with respect to access has therefore been maintained as high income earners will continue to receive old age security and family allowance cheques. However, universality of these benefits with respect to quality of benefit has been altered. The level of benefit received by families and individuals will no longer be equal, but will be dependent upon the level of income above an established threshold.
These measures in the Budget violate a long held principle in tax policy known as horizontal equity. This principle dictates that individuals are treated equally by the tax system. Individuals at the same level of income should pay the same amount of tax provided all other circumstances are equal.
This Budget will treat old age security pension income differently than other forms of income, and tax it back from high income tax payers at a higher marginal rate than applies to other forms of income. For example, a senior citizen earning $75,000 a year will pay more taxes than an individual at 64 at the same income level because the former old age security benefits will be subject to a higher tax rate. At this level of income that portion of the senior citizen's income comprised of old age security will be subject to a marginal tax of about 100 per cent,

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while the income of a non senior will be taxed at the top rate of 29 per cent.
Where is the fairness? Where is the equity? My view of universality has traditionally supported the concept of equal access to equal benefits across income levels. This concept of universality was integrated with that of a progressive tax system. Successive Liberal Governments strove to increase the level of progressivity in the tax system. The tax system was a corrective, progressive mechanism to assist in a fair distribution of benefits. Every individual within a defined client group received the same benefit regardless of income. At the same time, the tax system introduced the element of fairness by ensuring that high income Canadians pay higher marginal tax rates. Granted, a perfect degree of progressivity was not attained. Yet the tax system under Liberal Governments provided, in my view, a more equitable and fair range of marginal tax rates. Prior to tax reform, the upper marginal tax rate was 34 per cent, exclusive of surtaxes. The Conservatives have now reduced this rate to 29 per cent, exclusive of surtaxes. This move has resulted in lower overall tax rates for upper income Canadians.
Figures from the National Council of Welfare showing the percentage of changes between 1984 and 1991 in total federal and provincial income taxes paid by a dual-income family of four at three different levels of income illustrates this fact very clearly. Income taxes for the working poor in middle income families will increase in this country by 60.2 per cent and 17.4 per cent respectfully between 1984 and 1991. Elowever, families in the upper income range will pay 6.4 per cent less in income taxes over the same period.
The Conservative assault on the old age security and family allowance programs has three distinct components, all of which represent regressive departures from traditional equitable policies. For the first time, the tax back rate of universal programs is linked directly to the benefit received. The tax back rate was previously determined by utilizing progressive marginal tax rates which are impartial as to the sources of income. On its own this linkage between benefit and tax back rate renders universality a sham. The measure is doubly insidious coupled with the regressive tax measures instituted by this Government. As noted above, tax reform
has benefited the rich, and further changes to the child benefits package has significantly eroded the principle of horizontal tax equity. The poor and the middle class are paying a substantially higher rate of tax today than they were in 1984.
A one income family with two children in this country earning a poverty line income of $23,639 will have to pay an increase as a result of this Budget of $324. That is a cumulative effect since 1984 of 60.2 per cent. For a one income family with two children earning $45,422, the percentage increase since 1984 has been 29.3 per cent, whereas for upper income Canadians earning $100,000 with one income and two children, the increase will be roughly between 6 and 7.7 per cent. That is a shame. There is no fairness in this. It is just a further enhancement of the Tory ideology which is to help their rich friends and corporate friends at the expense of poor and middle income Canadians.
What about two income families with two children, where both the husband and wife are working? For those who are at the poverty level, which is roughly around $23,639, and I have quite a few of them in my constituency, as I am sure other Members do as well, this Budget will provide an increase in taxes of roughly $341. What does it mean in terms of the cumulative effect since 1984 on these individuals? It means a tax increase of 176 per cent, whereas for an upper income Canadian earning 100,000, the increase this year will be $1,429. Since 1984, the increase in percentage, as related to the poverty situation that I have just mentioned, is a mere increase of 10.9 per cent. In that there is not very much equity, not very much fairness.
Finally, the Government has embarked on a slippery slope. By varying the level of benefit from universal programs relative to income, the thresholds for the reduction of benefits under both the old age security and family allowance is to be $50,000 of net individual income. However, this threshold is only partially indexed. The Government has indicated that the threshold will be reviewed-and this is key-periodically and adjusted as appropriate. This is a signal they are sending to Canadians that next year, six months from now or 18


Mr. Wappel:: That is Tory equity.


David Charles Dingwall: That is right, it is Tory equity.

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months from now that that threshold could very well be reduced if they wished to take additional forms of income from poor and middle income Canadians. We know the track record. It is evident there for all to see. This means that as the Government looks for additional income or additional savings next year, the threshold could be dropped to $40,000 of net individual income, thereby capturing the family allowance benefits of an additional 530,000 families. Once the precedent is set, I suggest that the desire to achieve greater savings may prove irresistible to a hungry Government looking for new cash.
In any event, the lack of full indexing of this threshold will ensure that those earning $40,000 net individual income today will begin losing their family allowance benefits in eight years' time.
The assault also goes on to other programs other than old age security and family allowance. On December 9, 1983 in the House the Right Hon. Prime Minister (Mr. Mulroney) stated:
Genuine co-operative federalism requires a spirit of generosity.
There must be certain things that are above politics-there are
certain things in Canada which must be safeguarded against any
partisan attack -Medicare has to be one of them at all times.
Let us look at the record. From 1984 to 1989 we know what has happened. Unilaterally the Minister of Finance reduced expenditures and income transfers to the provinces substantially so that smaller provinces are feeling the heat and have stated so publicly. In his Budget papers he is going to give a further reduction of 1 per cent. As a result of the 1986 unilateral cut-backs and the Budget measures of 1989, the cumulative effect of those reductions will mean that Prince Edward Island will receive $7 million less, Newfoundland will receive $34 million less, New Brunswick will receive $43 million and $53 million less. That is for 1989-90 fiscal year.
The Minister of Finance would attempt to have us believe that with that reduction of 1 per cent we are still giving additional income to the provinces. Has the Minister of Finance from Nova Scotia said anything about these cut-backs and how it will affect his province? Has the Premier of Nova Scotia? Have other provincial Ministers said what these cut-backs will mean? These provinces will lose this cash in fiscal year 1989-90.
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The Minister states that we have just reduced a little bit of the growth, by 1 percentage point. One percentage point to the people of Nova Scotia or Newfoundland, or poorer provinces such as that, is an astronomical amount. It is no joking matter. It is not a game of theoretical arithmetic for Ministers of Finance to engage in. Those provinces were planning to have this money in 1989-90 in order to meet their economic commitments. By reducing that amount of money to the provinces, it will mean difficult decisions for provincial Governments to make. For example, it will mean such things as reductions in the number of people who work in our hospitals, whether it be nurses who care for the sick, orderlies who look after the infirm, or whether it be maintenance personnel. Their budget is shrinking, and the provinces will have to shoulder that burden.


Mr. Crosbie:: That's totally wrong.


David Charles Dingwall: Members opposite do not wish to hear the facts, but those are the facts. So much for the generosity of the Prime Minister when it comes to co-operative federalism. He talks about $25 billion over "x" number of years. However, he does not talk about the reductions and how that will affect the lives of Canadians in different regions and communities. Somehow we are supposed to accept holus-bolus that things are okay, people will proceed, and life will go on as normal. However, when provinces that administer many of these programs are going to be short with regard to that financial assistance, I suggest very carefully and very sincerely that that will mean grave and serious consequences for them.
As the former Prime Minister, the former Right Hon. Pierre Trudeau said on that occasion:
It is a matter of Tbry mentality, not a matter of dollars and cents.
Let me tell all those Canadians out there who think it is time for a
change that if they elect a Tory Party they better not be sick.
How true he was.
As a Government we protected those social programs. Successive Liberal Governments have protected those programs. That crowd over there, Mr. Speaker, wish to be tough in economic matters, but the Minister of Finance is really tough. He is such a tough guy that he taxes children. He is even tougher than most Canadians. He has terminated the child care program in terms of additional income for child care spaces. He is the guy

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who has increased taxes since 1984, which has had a devastating effect on the poor and middle-income Canadians in this country, as I alluded to earlier.
I suggest that with the combination of these tax measures and cuts, and the obvious attempt to erode the principal of universality with regard to old age security and family allowance, the shortfall with regard to EPF funding and what it will mean for our provinces, it is a bad sign and a bad signal for Canadians coast-to-coast. Whether one lives in Nova Scotia, Manitoba, the North, Quebec, or Ontario, from previous Governments we have come to expect a sense of equality, a sense of fairness. However, since 1984 coupled with Budget measures repeatedly, and now the most recent Budget of 1989, Canadians have come to learn to expect that there is no friendly hand with the Government of Brian Mulroney.


Mr. Deputy Speaker:: On questions or comments, the Hon. Member for Winnipeg St. James.


Mr. Harvard:: I want to thank my hon. friend for presenting to us some very thoughtful remarks. It would be my hope that every Canadian could read his remarks because he has made some very salient points. The claw-back by the Conservative Government is an effort to make an end run around universality. We all know if this claw-back provision in the Budget goes through, it will be the end of universality as we know it in this country. It will be the resumption of the ugly means test, only being done in a different manner.
Under this provision if old age pension can be taken away at an income level of $70,000 today, it can be taken away at $60,000 tomorrow, and $50,000 the week after. The Government will not stop at family allowances or old age pensions, it will get into medicare, and into every single social program in this country.
Let me remind Members opposite how ugly the means test can be. I recall when I was young my mother telling me about what went on during the Dirty Thirties on the prairies. I recall it very well. Farmers would go to the municipal office only after they had reached the absolute bottom of despair and they would ask for perhaps a bag of flour. An ugly part of the means test is that they would perhaps get a bag of flour, but their names would be put on a list in the front window of the municipal office. TTiat is what is ugly about the means test. I am getting to the question-


Mr. Deputy Speaker:: I would ask the Member to do it now.


John Harvard: I believe that the claw-back provision will prompt Canadians who do not share in a program like this to resent a social benefit of this kind. They will come to resent it. Does the Member not believe that programs like family allowance and old age pension would come to be resented as a result of the claw-back provision?


David Charles Dingwall: Mr. Speaker, my colleague's comment is very astute. He clearly spells out a concern that many Canadians have about the direction in which the country is going with regard to social programs. We have seen a number of government programs and its attempt to deindex, a subject which my colleague will address later in his remarks.
There is a great deal of concern, not only by provincial Governments but by individual Canadians and organizations, about the erosion of universality which began as recently as 1984 and has been coupled with successive tax measures brought in by the Government and the most recent Budget of the Minister of Finance (Mr. Wilson). When you take the cumulative effect, in essence one must conclude that there has been a major assault against the principle of universality which will cause havoc, concern and a great deal of anguish by many Canadians who are presently receiving benefits and hope to receive benefits in the years to come.


John Carnell Crosbie: Mr. Speaker, I want to ask the Hon. Member whether he is familiar with the views of his Party's finance critic who suggested, as a matter of fact on March 21, that the federal deficit be reduced by taxing back all of the family allowance and old age security payments from those who do not need them. This is the Party's official spokesman on matters of finance, speaking for the Party, speaking for the Leader presumably, and speaking for the caucus. I quote from the Ottawa Citizen on March 21. He said:
But MacLaren said drastic action is needed to cut the federal deficit, possibly both tax increases and spending cuts. And the money saved by taxing back social program payments from those that don't need them could be used to reduce the deficit and help those in need, he said.
MacLaren said he also supports the need for a new broadly based national sales tax on goods and services to replace the current narrowly based federal sales tax on manufacturers which he agreed is badly flawed.
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This is all Liberal policy. It has been pronounced by the Liberal finance critic, the Member for Etobicoke North (Mr. MacLaren). The article goes on to say:
On the $29-billion-a-year deficit, MacLaren said that unless the government takes "severe remedial action in this coming budget", the deficit will rise.
"It seems to me vitally important that we ensure that under any cost-cutting program that those who are really needy-not only receive what they are receiving now but receive more because there are pockets of real need in this country".
Programs such as family allowances and old age security should be available to those in need, he said.
"Perhaps the most effective way of ensuring that Canadians in need receive adequate amounts of support is-for those who don't require such support-tax it back", he said.
Who speaks for the Liberal Party, the finance critic or some other person who gets up and spiels off a lot of specious nonsense as the hon. gentleman did today? Who speaks for the Liberal Party? Does anyone speak for it, do 100 people speak for it? Will 100 flowers flourish? When will you get your act together? How can Canadians trust you for one second when they do not know from one minute to the next who is going to say what or who speaks for the Party? Was your finance critic right when he said that every sparrow that falls is going to be blamed on the Canada-U.S. Free Trade Agreement? Who speaks for the Party?


David Charles Dingwall: Mr. Speaker, it is always entertaining to hear from the Hon. Member from Newfoundland. He has adopted the old trick in this House that government Members have used since 1984. When they fall into difficulty with their budgetary measures, as the Minister did in 1979 with a very regressive tax-the 18 cent man-what do they do? The Hon. Member for St. John's West (Mr Crosbie) gets up and hollers, screeches and makes no sense whatsoever.
The Hon. Member refers to an article. He knows that my colleague was being asked about a number of possibilities which the Government might implement. He explained those possibilities. It is the Government which must bear responsibility and must shoulder the burden of singling out the poor and middle-income Canadians for its assault in order to improve its treasury bonds. It is members of the Government who must shoulder that burden, not those of us in the Opposition. They have a mandate and they should respond to the Canadian people with fairness and with dignity.
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Mr. Hovdebo:: Mr. Speaker, I think we all agree to a great extent with the comments of the Hon. Member for Cape Breton-East Richmond (Mr. Dingwall). However, will he explain the difference between the freeze imposed by the Liberal Government in the early 1980s with its six and five program, and the deindexing that is being done by the Government at this time?


David Charles Dingwall: Mr. Speaker, I thought the Hon. Member was here when those particular measures were introduced and debated very forcefully and enthusiastically at the time. He certainly knew that as a result of world-wide recession, which had great impact on the Canadian economy, different measures had to be taken.
I suggest to the Hon. Member that the six and five program to which he refers was one of limited duration, and not a program that would go on forever as a result of the particular tax measures the Minister of Finance (Mr. Wilson) has introduced, not only in this Budget but indeed in previous Budgets. That is the distinction the Hon. Member ought to be cognizant of.


Hon. Perrin Beatty (Minister of National Health and Welfare):: Mr. Speaker, two days ago the Leader of the Opposition (Mr. Tbmer) spoke in moving terms about what the House of Commons could be at its best. He said:
This is and remains the forum of the nation. This is the highest court in the land. This is the place where finally issues must be decided.
He continued by expressing his concern that we must act to make Parliament relevant as a place where the vital issues facing Canada can be decided. All of us who love this institution share his belief of what the House of Commons can be and his sense of what it all too frequently has become.
My fear is that growing numbers of Canadians find not only Parliament but political debate itself hollow and irrelevant. Our political Parties should be offering our citizens competing visions of Canada. Instead, sadly, partisanship too frequently displaces policy, and posturing substitutes for principle.
The motion proposed by the Liberal Party today does not advance the quality of our political debate. Instead, it debases our discussions by misrepresenting the Government's policies without offering Canadians an alternative economic course to follow.

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Over the past few weeks we have heard Member after Member on the opposition side condemn the Government for its alleged failure to control the national debt. The Liberal Party finance critic stated:
In every Budget in every year since this Government came to power in 1984, the Minister of Finance has denounced the deficit. We have heard him promise repeatedly to do something about it. In each of those years the Government has failed utterly to do what it said it would do.
The Leader of the Opposition said:
Business people and financiers everywhere in the world realize that the Canadian deficit and debt are totally out of control.
It is gratifying that at least on one point the Opposition agrees with us, but the issue is not whether Members are willing to admit that the national debt is too large. The real issue is whether they have the desire and the courage to deal with it.
If Canadians had listened closely to what has been said on the opposition side of the House over the course of the past eight days, they could have been forgiven for concluding that Members opposite believe either that the debt burden is not a grave issue or can be solved without sacrifice. The day has passed when we can simply pile deficit upon deficit without worrying about the future. Canadians know that fact, even if sometimes the politicians refuse to acknowledge it. Every home-maker, every small businessman, every farmer recognizes that one cannot go on spending more money than one is bringing in without very serious consequences.
The exact same principles apply to Government as apply to our homes, to our businesses and to our farms. Governments can no more repeal the laws of economics than they can repeal the law of gravity. The simple fact is that each and every Canadian has a debt in Ottawa of more than $12,300. The debt for each person in Canada is $3 larger today than it was at this time yesterday. It will be at least $3 more tomorrow. Our national debt is increasing by $80 million a day.

The result is that this year, we will be spending more on interest payments than on the aggregate of what we spend on health care, family allowance payments, old age security and welfare. Last year, our interest payments represented 31 cents of every dollar obtained from Canadian taxpayers. This year, it will be 35 cents. Unless we do what has to be done immediately, it will be worse next year and the year after, and so forth.

We are not talking about an abstract concept. The debt is a very real issue and it affects each and every Canadian. How we deal with it not just as a Government but as a society will determine the quality of Canadian life in the years to come. Unless we are prepared to act today the very survival of the programs which the Opposition professs to defend is in danger.
This Budget represents the recognition by the Minister of Finance that the time for simply talking about the debt is passed. In finally coming to terms with the legacy of past irresponsibility there are three key principles by which we should test all of our proposals for action.
First, our most important goal must be to ensure the survival of those social programs which help to define ourselves as Canadians. We cannot do the job alone. Our rising debt is a shared problem, a national problem. Only through a common national effort can we deal with it successfully.
Second, in waging our battle we must ensure that those of us who can afford to carry the heavier burden are the ones who are asked to do so.
Third, we must ensure that the poorest and the weakest remain fully protected.
How do these principles apply in the current Budget? Let us look at two examples. The first is the implementation of changes to family allowances and old age security. The Opposition has claimed falsely that increasing the taxes on high-income recipients of family allowance and old age security is raising money on the backs of the needy. How can this be when only the wealthiest recipients are affected? Some 96 per cent of seniors will not be touched by new taxes on old age security. Only the two per cent of seniors who receive more than $76,000 a year will be asked to repay all of the old age security payments. Similarly, the facts show that 86 per cent of Canadian families will remain completely unaffected by the change in family allowances. Those who need the assistance will continue to get it. Those who do not need it will be asked to contribute more to help to restore our economic health.
My second example is child care which was referred to buy the spokesman for the Liberal Party. I have heard allegations that it is the children who will pay for this Budget. In fact, it is the children who will pay if we do not support this Budget, if we allow the debt to grow. Every dollar that is added to our national debt is a dollar that is stolen from our children. We believe that our
May 5, 1989

children are our most important resource. This Government remains committed to child care.
We are also acutely conscious of the needs of lower income families. For this reason we are proceeding with the tax measures affecting children which amount to $2.3 billion, 90 per cent of which is aimed at low and modest income Canadians. Nearly one and a half million families will be helped with the cost of caring for their children.
We are also maintaining the $100 million child care initiatives fund which provides assistance to innovative programs for child care.
Again, the $200 million which we spent last year under CAP, Canada Assistance Plan, and the increase of a further 20 per cent in funding this year, are directed to Canadians in need, once again demonstrating our commitment both to child care and to ensuring that those least able to pay receive the most assistance from the Government.

The debt level is so high that we had to make a difficult decision, namely to proceed more slowly with implementation of a third measure that had been approved, which was to increase without delay the number of spaces in this country's daycare centres.
We have not reneged on our commitment to daycare, certainly not. By the end of our mandate, we will have done what is necessary to attain all our objectives in this area.

That was a commitment that was repeated today by the Prime Minister (Mr. Mulroney) on nation-wide TV.
Let me take a moment to comment specifically on today's motion by the Hon. Member for Cape Breton-East Richmond (Mr. Dingwall). The motion states that this Budget undermines all Canadian social programs. It is difficult to understand precisely what is meant by the statement. In the time allotted for questions and comments, if the Hon. Member has the opportunity, he will clarify these claims for the House.
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It would appear that the Opposition believes that targeting social programs to provide the most support to those who need the most will undermine both the concept of the program and public approval. Indeed, that was exactly the claim that was made by the Hon. Member from Winnipeg when he spoke earlier. Such an assertion is absurd. It implies that if we focus social programs on those who need them, Canadians who do not receive them will withdraw their approval.
There are at least two examples which Canadians support right now which dispute this theory. The Guaranteed Income Supplement and the child tax credit are both programs designed to help lower income Canadians. Both are supported strongly by all Canadians, not just by those who receive the cheques, and Members opposite suggest that these programs be changed to deliver equal benefits to wealthy Canadians.
I invite Members of the House, and I invite Canadians, to review the comments that were made by the Hon. Member from Winnipeg who said that if we focus benefits it is inherently unfair. What would he do with the Guaranteed Income Supplement? What would he do with the child tax credit? What is the position of the New Democratic Party when it comes to providing assistance most to those people who are most in need? That is the position, Mr. Speaker, of the Members opposite when it comes to asking those who can afford to pay to cany the higher share of the burden.
What we have is two Parties locked in the past incapable of recognizing the new realities of 1989, unwilling to be candid with Canadians about their proposals to deal with this national debt burden, prepared to continue to run up deficit after deficit, to pile the burden of debt upon young Canadians which will make it impossible for them in the future to get ahead.


Some Hon. Members:: Hear, hear!


Henry Perrin Beatty: We have heard, Mr. Speaker, in Question Period and in debate in the House of Commons in the past week a great deal about compassion. We have heard about fairness. We have heard about concern. Where is the compassion opposite for young Canadians who are being asked to shoulder the debt burden which is being run up by irresponsible Governments and by politicians who refuse to accept that benefits paid must be covered in taxes?

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Where is the concern for Canada's future when they propose that we simply continue on the same ruinous course year after year without ever reviewing what consequences that will have for Canada? Where is the fairness when they say, go ahead, continue to spend, allow that debt burden to grow, allow an ever-increasing share of the national Budget to be going just for the interest charges on the national debt, to the point where it threatens the very existence of the social programs which they claim to support?
Where is the compassion, the fairness and the concern for Canada when that is the policy that it follows? Where is the honesty that Canadians have a right to expect from Members on all sides of the House?


Thomas (Tom) William Wappel: How many deceits did you carry out on Canadians?


Henry Perrin Beatty: It is not enough to talk about the national debt. It is time for Canadians in this House of Commons, on both sides, to be honest about what, if anything, they would do about it. Canadians are more sophisticated than Members opposite give them credit for. Canadians understand that you cannot simply attack every measure to reduce that debt burden, and at the same time get up, as all of them have done, to say day after day in the House of Commons that the debt be increased, and also at the same time get up, as all of them have done, to say that not enough is being done about the national debt.
Canadians are simply smarter than that. They will not be conned.
When the Opposition suggests that targeting programs to those people who need them the most will cause Canadians to withdraw their support from social programs, they put forward a view of Canadians as mean-spirited and unconcerned about the people who are most in need. It is a view that is both false and unfair to ordinary Canadians. Anyone who knows the history of this country, any of us who represent Canadians in this House of Commons, must surely by now recognize the fact that if there is one characteristic that runs throughout Canadian history it is that of generosity on the part of Canadians and a concern for people who are most in need. A suggestion by Members opposite who claim to be concerned about the poor or claim to be concerned
about the elderly, that giving most assistance to those people most in need will somehow cause Canadians to be mean-spirited, is a distortion of the facts and it is unfair to every Canadian.
I invite Canadians who are watching this debate on television or watching from the galleries as well as members of the press to watch what is done by Members opposite over the course of today. What is the position being taken by members of the Opposition? Their position is that we should be paying equal benefits and that equal benefits should be obtained by those people who are wealthiest in our society. The Party that once spoke for ordinary Canadians, that once professed to be concerned about the people most in need, the New Democratic Party, now speaks for the wealthy. New Democrats are saying their concern is that benefits will be taxed back from those who can most afford to pay.
In a recent poll, which I have in my hand here, some 63 per cent of respondents supported the Government's move to tax back family allowances and old age security at a higher rate from the income of high income recipients. That is a margin of two to one in support of the Government's proposals.
Ms. Hunter How much did the poll cost?


Henry Perrin Beatty: Are these people mean-spirited? Is there something they don't know that members of the Opposition do know? Is there something that is represented in this view that is cruel or unconcerned for the poor wealthy people who will have their benefits taxed back?
The second part of the motion we are debating here today says that the Budget will make easier further incursions against old age security pensions and family allowances, as well as other social programs, including medicare. I hear in this motion disturbing echoes of last year's campaign to frighten the elderly, the sick and the poor by false claims that their well-being would be affected if the Free Trade Agreement were implemented.
Today the argument is different, but the goal of the Opposition is the same, to create fear among the people least able to defend themselves. Any claim that asking wealthier Canadians to carry a larger share of the tax burden paves the way for an attack on medicare is both false and deeply unfair to the sick and to the elderly. It is an invention by the Opposition. It is a claim that was
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specifically repudiated by the Minister of Finance (Mr. Wilson) as recently as yesterday, and it is a tactic which debases the quality of our public debate.
Far from seeking to undermine the social safety net, we are trying to make sure that our programs for seniors and families and our other policies to meet social needs, including health care, continue to exist, not just today but for the future.
The third point in today's motion states that the effect of the Budget:
-will fall most severely on Canadians of moderate means while
costing the wealthy little.
Quite frankly, I do not understand the point the Opposition is trying to make. It is beyond me how the Opposition can argue that a recovery payment that affects only 4 per cent of seniors with incomes over $50,000 or 14 per cent of higher income families is coming at the expense of Canadians of moderate means while costing the wealthy little. If the opposition Members had read the details of the Budget they would know that this statement is groundless.
There has been a great deal of comment from the Opposition that the Government is abandoning the concept of universality. I find the horror that this raises in the hearts of the Liberal Opposition intriguing given the comments of their finance critic and of their Party president.

Mr. Speaker, not I, nor the Minister of Finance nor the Prime Minister but the President of the Liberal Party of Canada, Michel Robert, said that universality was obsolete, according to the newspaper La Presse of April 16, 1989, and I quote:
We had a debate on universality, he added, but we did not ask ourselves whether the debate itself was still timely. As I see it, there is no longer a case for universality. We do not have enough resources. Since the need has become far greater among the poorest in Canada, we must consider reallocating our resources to be able to offer genuine assistance to those who need it most.

It was the Liberal finance critic, not the Minister of Finance on this side, who said:
For my part, I continue to wonder whether family allowances and possibly old age pensions need be universal, especially now that our federal deficits have mounted so markedly-
As the Minister of Finance says, "It's in his book." He is right. I am one of the few Canadians who has actually bought the book. I would advise Canadians, particularly
Supply
Members opposite as they participate in this debate, to take a look at what the official spokesperson for the official Opposition has said.
This is a uniquely Liberal point of view and it is not reflected in the action taken by the Government in the Budget proposal. The Macdonald Royal Commission defined universal programs as:
- those which distribute the same level of gross benefits to all persons with specified traits, irrespective of their incomes. In Canada, all such 'universal' programs define their benefits as taxable income.
By that definition, and all others who have cared to examine the matter closely, universality has not disappeared from Canada. Seniors and families will still receive their monthly cheques, but they will do so without the imposition of a degrading means test. Cashing their cheques will have no stigma attached. Our intention is to make sure that every Canadian has these benefits delivered to him or to her without obstacle and without limitation.
When the Member for Winnipeg gets up and says there is a means test if Canadians are asked to fill out their income tax returns each year, he shows an appalling ignorance of what a means test is. What would he propose when we are filling out our income tax returns? That we do not disclose our income? Since when has the income tax become a means test? It is like Alice in Wonderland, with words now being given meanings which they never had before.
Let me conclude in this way. I spoke earlier about the speech made by the Leader of the Opposition (Mr. 'Rimer) the day before yesterday in which he described this House as the place where issues finally must be decided. I agree that that is what Parliament should be and what it is at its best. When the great issues of the day are debated no one should be surprised that there are disagreements and often heated debate.
No individual and no one Party has a monopoly on truth. Debate about the direction in which we should be going is healthy and necessary, but not the sort of debate which we have been seeing over he past week. Canadians who have watched the House of Commons over the past seven days know that something must be done to bring the national debt under control and they know precisely how this Government proposes to do it. They have also heard the Opposition reject every measure which we have put forward to deal with the problem. They have heard Members opposite universally condemn the Government for not doing enough about the national debt, while at the very same time attacking eveiy cut in

May 5, 1989
spending and every new tax measure which we have proposed.
This is a time for candour and honesty. As we proceed with debate on the Budget, each speech should be judged by whether it offers only hollow, partisan criticism or realistic and honest alternatives on how best to deal with these very real problems.


Mr. Deputy Speaker:: It being 11 o'clock, the House will now proceed to Statements by Members pursuant to Standing Order 31.


STATEMENTS PURSUANT TO S. O. 31
Thomas (Tom) William Wappel: Mr. Speaker, on Tuesday May 2, the world was pleased to see a small part of the Iron Curtain being dismantled. For decades, 240 kilometres of barbed wire fence has stood on the Hungarian-Austrian border but, by order of the Government of Hungary, it is now being removed.
This is a clear indication that East-West relationships are improving and that cold war ideologies are no longer the doctrine of the day. In the past year we have seen glasnost perestroika, the INF treaty and conventional arms reductions in Europe, all symbols of hope and peace.
Although 240 kilometres is but a small portion of the Iron Curtain, it is, hopefully, just the first step toward open and unguarded geopolitical boarders between citizens of the globe.


THE ENVIRONMENT
Mr. Ross Stevenson (Durham):: Mr. Speaker, the Prime Minister (Mr. Mulroney) continues to emphasize to President Bush the critical importance of the Canada-U.S. agreement to control acid rain.
From his first visit to Washington, the Prime Minister has taken bold initiatives toward a mutual agreement for the reduction of acid gas emissions.
As a former university professor who has been involved in environmental issues and research for more than 20 years, I have witnessed the tremendous scientific progress here in Canada. I join with other Canadians in applauding the continuing efforts of the Prime Minister and other Canadian representatives in Washington.
I know they will continue to take every opportunity to advance Canada's position on acid rain. This is an issue on which our desires must and will prevail.


FUR INDUSTRY,-REPLACEMENT OF LEG-HOLD TRAPS
Ms. Audrey McLaughlin (Yukon):: Mr. Speaker, in a recent development, the European Commission of the European Economic Parliament has proposed a ban to import fur and fur products from countries which are using the leg-hold trap. They propose this ban by 1996. This is a move which must be taken very seriously.
The $600 million a year fur industry employs 105,000 Canadians. There are 1,000 trappers in my riding of the Yukon. In fact, over 70 per cent of our furs are exported to the European community. What is necessary now is an immediate commitment on the part of the Government to assist in increased trap research, trapper training and public education, and a shared federal-provincial territorial trap replacement program.
The fur industry is a vital part of our economy and one which, I might add, depends upon the preservation of the environment rather than its destruction.
I call on the Government to make a strong commitment to help this industry.


SPORTS GREATS
Mr. Jean-Guy Guilbault (Drummond):: Mr. Speaker, last Saturday evening in Drummondville, Mr. Leandre Couture was honoured as the sports celebrity of 1989, an award he shares with Rosaire Smith, Harry Howorth, Olivier Carignan, Laurent Sawyer, Guy Bissonnette,
May 5, 1989

Robert (Bob) Pepin, Marcel Larocque, Felicien (Fred) Bourbeau, Yves Tessier and Claude Beland.
He was raised in a family that was involved in sports, and his achievements in baseball, la crosse and hockey during the years 1935-55, were known, both locally and throughout the province.
He always had time for others. His dedication to sports and his community involvement were legendary. He later became a referee, president of the OTJ, coach, co-founder of the Heriot Golf Club, director, manager, advertising manager and finally governor of the Junior Drummondville Rangers, and players like Marcel Dionne, Yvon Lambert and many others have him to thank for their careers.
Maurice Fillion, who worked for him, starting as an instructor, was there to pay tribute to Mr. Couture.
Married to Marcelle Mercure, he was an officer in the Canadian Army and served his country as so many thousands did in 1941. Subsequently, he became officer in command of the Military College and was a member of the Canadian Legion.
Mr. and Mrs. Couture certainly deserve all the congratulations they are receiving, and we want to take this opportunity to thank them for everything they have done.


NATIONAL DEFENCE
Hon. Bob Kaplan (York Centre):: Mr. Speaker, the Mulroney Government's crushing decision to close or cut back 14 military bases across Canada to save $585 million has caused enormous distress in Canada's regional economies, some of which are dependent on the activities which will now be transferred to other bases. In my Toronto riding, Canada's largest military base may well increase as a result.
It seems that no thought was given by the Government to alternatives which would have spared the regions this devastating cut. I propose to the Government that instead of its present plan, it close the base at Downs-view. Essential strategic operations could be continued on less than 5 per cent of the land presently used, and other activities could easily be moved to Camp Borden, 45 miles away.
The Government could earn as much as $750 million from the sale of the over 650 acres of land which are badly needed for residential development. Under the Province of Ontario guidelines there would be 25 per cent affordable housing. The urbanization of the base would create thousands of homes, parks and amenities and an economic boom for Toronto, rather than the disaster the Government's present plan delivers to places like Summerside.
To take that example, the closure of CFB Summerside represents a 4.5 per cent total job loss for the Province of Prince Edward Island and the devastation of the economy of that part of the Island.


MENTAL HEALTH WEEK
Mr. Greg Thompson (Carleton-Charlotte):: Mr. Speaker, May 1 to May 7 is Mental Health Week in Canada and I would like to take this opportunity to commend the men and women of the Canadian Mental Health Association for their efforts to increase public awareness on the issues of mental illness and mental health.
Established in 1918, this association is one of the oldest voluntary organizations in the country. Today the Canadian Mental Health Association has grown to include over 30,000 volunteers with 250 permanent staff in its 190 local branches, 12 provincial and territorial divisions and the national office.
Most recently, the CMHA has been collaborating with the federal Department of Health and Welfare to develop and promote a strategy to bring a message on mental health to the Canadian people.
I know all Members of this House will join me in congratulating both the Canadian Mental Health Association and the Minister of Health and Welfare for their continuing commitment to the betterment of all Canadians.


HOUSING
Mr. Jim Karpoff (Surrey North):: Mr. Speaker, Members of the House of Commons should be made aware of the crisis that now surrounds affordable social housing in Canada as the result of the federal Budget.
Last week saw the outright termination of the rental RRAP program for upgrading housing for low-income

May 5, 1989
Canadians. Today we have the devastating cut in co-operative housing units.
Last year only 60 per cent of the promised 5,000 units were reached. This year it will be just 1,708 units or 34 per cent of the promise. This cut also means that the co-operative housing and rental RRAP organizations which provide valuable resources to individual co-ops and rental organizations will be permanently crippled.
I know the Minister is now having emergency meetings with groups such as the Co-operative Housing Foundation and the Canadian Housing Renewal Association to try and salvage some crumbs from the once promising social housing program in Canada.
I call upon the Minister of Housing who continuously championed the cause of affordable housing while a back-bencher to restore these programs and not become the Minister who opted out of the provision of social housing in Canada.


GAS PRICE INCREASES IN QUEBEC
Mr. Vincent Della Noce (Parliamentary Secretary to Minister of National Revenue):: Mr. Speaker, for some weeks, many Quebecers have told me they are unhappy with the successive gasoline price increases in Quebec. Prices at the pump have gone up by more than 3 cents a litre.
I have consulted with retailers and wholesalers in Quebec and the complaints seem to be serious. Our inquiries show that the oil companies, which had behaved so well over the last four years, are once again recalcitrant.
A few days ago, the Quebec gasoline price inspection and information office (BIPE), at the request of my colleague, (Quebec) Energy Minister Ciaccia, published a special bulletin showing conclusively that Quebec drivers have been hit with three successive gasoline price increases. I would like to point out to Quebecers that the increases ordered by Shell in March and by Ultramar in April seem once again to prove that these companies have raised prices without waiting the required 60 to 90 days.
So as a result, in a seven-week period, over $14 million has gone to boost oil company profits, to the detriment of consumers, retailers and independent wholesalers.
Mr. Speaker, the Quebec Energy Minister-


Mr. Deputy Speaker:: I regret to interrupt the Hon. Member but his time has expired.


THE ECONOMY
John Harvard: Mr. Speaker, while this Government slashes spending on unemployment insurance, cuts funding for VIA Rail, closes military bases and reduces regional development programs, it continues to waste millions of dollars on television commercials promoting its cuts on the backs of those who can least afford the burden.
The Prime Minister (Mr. Mulroney), on his current visit to the U.S., has taken along an entourage of no fewer than 120 persons while many line up at food banks. Recently the Government has spent $35,000 in renovations to the offices of the Minister of the Environment (Mr. Bouchard) at a time when many Canadians have difficulty providing basic shelter for their families. Yet this same Government has spent $2.7 million to, as the Minister of Finance (Mr. Wilson) puts it, educate Canadians on the need to cut the deficit. Each time the commercial runs, thousands of dollars are taken away from those in need.
These are only a few examples of the hypocrisy of this Government which on one hand expects ordinary Canadians to shoulder the burden of deficit reduction while it continues to spend millions of dollars unnecessarily. Members opposite ought to be ashamed of themselves.


ACID RAIN
Mrs. Suzanne Duplessis (Parliamentary Secretary to Minister of State (Science and Technology)):: Mr. Speaker, Prime Minister Mulroney recognizes that the acid rain which is spoiling our forests and our lakes is an extremely important concern for the future of Canada. Our Prime Minister is now a world leader with the protocol signed in Montreal to protect the ozone layer and all the efforts he has made in various countries.
May 5, 1989

Although the newspaper headlines this morning say that the Prime Minister is coming back empty-handed because he has not concluded an acid rain agreement with President Bush, his visit to Boston, where he received a very important prize, made Americans aware and they are surely the ones who will put pressure on the U.S. Congress so that one day we will be able to have an acid rain agreement.


PRIVATIZATION OF SASKATCHEWAN POWER CORPORATION
Mr. Ray Funk (Prince Albert-Churchill River):: Mr. Speaker, I am pleased to rise in this House to pay tribute to the historic battle which the people of Saskatchewan are putting up to save a cherished part of their heritage, the Saskatchewan Power Corporation. I predict that in the same way that the medicare battle of 1962 marked a turning point in the evolution of social policy in Canada, so to the fight to save Sask Power will be a turning point in bringing an end to right-wing economics in this country.
By a margin of 58 per cent to 27 per cent, the people of Saskatchewan are saying no to the pillage of public assets by the Tories and big business. By a margin of 67 per cent to 22 per cent, they are saying no to the privatization of Sask Power.
The ordinary people of this country have had enough, and once again, the people of Saskatchewan are showing the way for a brighter future for everybody, not just the rich and powerful. I am sure I speak for a vast majority of Canadians when I say to the folks back home, congratulations, thank you and good luck.


NATIONAL REVENUE
Mr. Blaine A. Thacker (Lethbridge):: Mr. Speaker, I wish to bring to the attention of the Minister of National Revenue (Mr. Jelinek) that part of the collective agreement which pays mileage to customs officials who work in Coutts, Alberta, but choose to live anywhere beyond 16 kilometres up to a hundred kilometres away. This adversely affects the fine town of Coutts which is the fourth-busiest port of entry into Canada. The elected council and the vast majority of my constituents feel that
this is unfair to Coutts and in general is a waste of taxpayers' money. I ask the Minister to negotiate an end to this part of the collective agreement.


INDUSTRIAL DEVELOPMENT
Mr. Jean-Claude Malepart (Laurier-Sainte-Marie):: Mr. Speaker, first, the Conservative Government's decision on Monday not to locate the Space Agency in Montreal proves beyond any doubt that the Mayor of Montreal, Jean Dore, was had by the Prime Minister (Mr. Mulroney), and he was not the first one.
Second, this decision proves beyond any doubt that our two Ministers responsible for the Montreal area, the Minister of Labour (Mr. Corbeil) and the Secretary of State of Canada (Mr. Weiner), have no clout in the Conservative Cabinet when it comes to defending Montreal's interests.
In addition, the three new Conservative superstars, the Hon. Members for Rosemont, Outremont and Bou-rassa (Mr. Tremblay, Mr. Hogue and Mrs. Gibeau), are no better than the Desrosiers and Gravels when it comes to delivering the goods.
Mr. Speaker, there is another issue where Montreal is being had, and that is rail transport-VIA Rail. In conclusion, we can say that under Tory rule, not only has Montreal lost the title of Canada's metropolis, but it has now become a suburb of Longueuil!


THE ECONOMY
Mrs. Barbara Sparrow (Calgary Southwest):: Mr. Speaker, no one likes high interest rates, especially the people of Alberta, and I am here to fight for them. High interest rates are hurting all of western Canada.
Some people have called for different rates for different regions. That would cause absolute chaos in Canada. Money would flow from the low to the high rate areas and totally distort the market-place.
Deficit debt reduction is a must and that is what this Government is doing. Without the cuts and tax increases contained in the Budget, Canada's opportunities to reduce high interest rates would have been curtailed. The Bank of Canada rate has dropped slightly. Longterm mortgage rates have dropped a little. Central Canada's economy is cooling. Working together today to

May 5, 1989
Oral Questions
reduce the deficit debt will benefit everyone in the years ahead.



ORAL QUESTION PERIOD


Hon. Warren AUmand (Notre-Dame-de-Grace):: Mr. Speaker, my question is for the Minister of Finance. The April unemployment figures released this morning indicate that since March, the unemployment rate has increased by three points to 7.8 per cent with more than one million Canadians unemployed and increases in unemployment in eight out of ten provinces, increases for women and increases for youth. In these circumstances, how can the Minister justify his deflationary Budget with higher taxes, high interest rates, cuts in unemployment insurance and cuts in regional development? For the last week, we have said that this is the wrong Budget and this morning's statistics confirm that. Why is the Minister adding to this misfortune? Is he trying to drive the country into a recession?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, I have said on many occasions that this Budget is to do exactly the opposite. If we had not taken these actions, we would be moving much closer to a recession because of the impact of the high debt on the economy. Surely the Hon. Member should understand this.
I have listened to the Hon. Member very carefully. I think this is the first time in four years that he has been on his feet asking questions about the unemployment rate because every other time, it has been coming down. A million and a half jobs have been created during the course of the past four and a half years, and the record that we have achieved as a country during that period of time we believe will be reinforced by the Budget that was brought out last week.


UNEMPLOYMENT RATE FORECASTS
Hon. Warren Allmand (Notre-Dame-de-Grace-La-chine East):: Mr. Speaker, the statistics released this morning confirm the forecast that the Minister tabled with his Budget last week. In his document entitled Canada's Economic Prospects in the 1990s, he said that unemployment would increase in 1989 to 8.2 per cent and in 1990 to 8.5 per cent.
A report published this morning by Wood Gundy, a well known Canadian investment house, said that the Budget has caused it to revise its economic forecast for next year, and under its new forecast, unemployment would rise to 9.2 per cent in 1990 and we would be pushed into a shallow recession.
With that kind of forecast, and I am referring to the Minister's own forecast, why did he bring in such a recessionary Budget? Can he not understand that the best way to deal with the deficit is to stimulate economic growth and not to strangle investors, consumers and Canadian workers?


Michael Holcombe Wilson: Mr. Speaker, I can very well understand the desire on the part of all Hon. Members of the House to get lower interest rates. This Budget, by putting a better balance between budgetary policy and interest rate policy, is designed to get interest rates down so that we can ensure that we continue the tremendous record of growth that we have exhibited as a country over the last number of years.
The Hon. Member refers to the fact that we are projecting a small increase in the unemployment rate. He neglects to say that we are also projecting an increase in the number of jobs that will be created, as has been the case over the past year. There has been close to
200,000	jobs created and that surely is a positive sign that this economy is a healthy one.


William Warren Allmand: Mr. Speaker, not everyone is wrong except the Minister. He is driving the country into a recession.


INTEREST RATES-NEGATIVE EFFECTS
William Warren Allmand: Mr. Speaker, for months now, the provincial governments
May 5, 1989

have been saying that interest rates are too high and have a very negative impact on the economy, on investments and on jobs. When will the Minister start listening to the provinces and other Canadian institutions to change these misguided policies? When?


Michael Holcombe Wilson: Mr. Speaker, I think the Hon. Member wrote down that question before he heard my answer to his second question.


William Warren Allmand: I know what the provinces have said.


Michael Holcombe Wilson: I just told the Hon. Member what the provinces have said. I don't think he was listening very carefully. Let us get to the point. The point is that the Hon. Member wants to get interest rates down. We also want to get interest rates down.


William Warren Allmand: And jobs.


Michael Holcombe Wilson: The Hon. Member wants to have jobs. We are creating jobs in this country at a very satisfactory rate. I want to say to the Hon. Member that you cannot just snap your fingers and say, interest rates go down. They go down through the operations of the market-place. The Hon. Member is suggesting that we ignore the market-place, get interest rates down in an unnatural way. He knows full well that that will lead us right back to the policies of the Government that he was a part of in the 1970s and the early 1980s that led to the high inflation, high interest rates of 25 per cent back in 1981-82, and the huge unemployment disaster which we had at that time. This Government is going to avoid that.


William Warren Allmand: Wrong Budget, Mike.


THE ENVIRONMENT
Mr. Jack Iyerak Anawak (Nunatsiaq):: Mr. Speaker, my question is for the Acting Prime Minister. Canadians are concerned that the Prime Minister was unable to secure from President Bush a solid commitment to negotiate an acid rain accord. Although the President confirmed his administration would introduce domestic legislation to cut sulphur dioxide emissions, Canadians did not get any specific details on the nature of the legislation. Why is the Prime Minister once again coming back empty
Oral Questions
handed? Why has he not been able to secure a firm commitment from the President on acid rain control?


Right Hon. Joe Clark (Secretary of State for External Affairs):: Mr. Speaker, I appreciate the Hon. Member's genuine interest in arriving finally at an accord which will bring some control to acid rain emissions on both sides of the 49th parallel. In fact, we have made some veiy considerable progress, as the Hon. Member will know. There is a proposal coming before the United States Congress by late May or early June that will provide the U.S. legislators with authority in their own jurisdiction to proceed with actions similar to those already taken in Canada. That will provide the basis for an accord between the two countries. The necessity of that accord is agreed to by the President of the United States and the Prime Minister of Canada. The negotiations on that accord will begin shortly after the matter is through the U.S. Congress.
This is very substantial progress, and brings an end to a period when Canadians have been seeking, without much response from the United States, some common action against acid rain. We are making significant progress. I know the Hon. Member will join me and other members in the House in celebrating that.


AWARD PRESENTED TO PRIME MINISTER
Jack Iyerak Anawak: Mr. Speaker, my supplementary question is again for the Acting Prime Minister. The Prime Minister while in Washington accepted an award from a group whose chairman is the head of the USX Corporation, a company which does not believe acid rain is a problem that needs further controls. A position paper of the company says, and I quote:
The case for acid rain control remains unproved.
Does the Acting Prime Minister agree that in accepting this award the Prime Minister has damaged Canadian credibility on the need for a Canada-U.S. acid rain accord? Has the Prime Minister not implicitly accepted the views of the U.S. company which has been described as one of the country's worst polluters?


Charles Joseph Clark: Of course not, Mr. Speaker. I think it is a rather lamentable practice for the House for Members on the opposite side, for simply partisan reasons, to attack an honour that comes not only to the Prime Minister of Canada, but to the whole of Canada-


Mr. Simon de Jong (Regina-Qu'Appelle):: From that company? Come on.

May 5, 1989
Oral Questions


Charles Joseph Clark: -for leadership that we have shown on environmental matters.


Some Hon. Members:: Hear, hear!


Charles Joseph Clark: I think in these circumstances it is worth making the point that this is only the second time this award has been presented. It was presented last year to the Prime Minister of Norway, the Hon. Gro Brund-tland, whose credentials as an environmentalist are very well known. I am sure the Hon. Member would not want to cast a negative reflection upon the credentials of Prime Minister Brundtland, or indeed upon the credentials of Canada by making that kind of implication.


NATIONAL REVENUE
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is addressed to the Minister of Finance. During the election campaign, the chairman of the House finance committee pointed out that the Government's proposed new sales tax would increase revenue by some $10 billion. At the time the Prime Minister said, way out of line. The Minister of Finance said, wrong. I want to ask the Minister of Finance, since he was in the committee yesterday, and finally admitted the truth, about what the chairman of the finance committee had to say, namely, that there was a $10 billion additional tax grab coming as a result of this new tax. Why did the Minister say one thing during the election and tell the truth after the election?


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member is distorting the facts. I have always said that the new sales tax would replace the existing sales tax, plus fund a new refundable sales tax credit, plus lower the income tax rate for middle-income earners, plus I said quite recently that we would remove the surtaxes. The misinterpretation that the Hon. Member tried to apply at the time of the election, and again, is that there would be another $10 billion on top of that. That is simply not true. The amount of money that will be raised by the new sales tax, the goods and services tax, will be used to replace the existing tax, bring in a generous refundable sales tax, which I would expect the Hon. Member would be congratulating us for, plus we will reduce middle income tax rates.


COMMITMENT DURING ELECTION CAMPAIGN
John Edward Broadbent: Mr. Speaker, the Prime Minister of Canada was on Canada AM this morning. He said in response to a question that the people of Canada were not listening to him during the election. He was wrong. The people of Canada were listening to the Prime Minister. The problem is that the Prime Minister was not telling the truth, nor was the Minister of Finance. I would like to pick up on what he just said. He is quoted from the Toronto Star during the election campaign criticizing the chairman of the finance committee, the man who was telling the truth. The Minister of Finance said this:
The bottom line is that (the sales tax) will not be used to raise the revenues of the Government of Canada.
Was the Minister of Finance then saying that it was going to be revenue- neutral, that any new sales tax was going to be totally offset in its impact by other tax reductions?
Will the Minister of Finance now admit that he misled the people of Canada, that the new sales tax is not going to be totally offset, and that finally the net effect of this is a thousand dollar per family additional tax grab?


Michael Holcombe Wilson: Mr. Speaker, again I reject what the Hon. Member has just said. I said very clearly in the election campaign-I will repeat what I said in the first answer-that the new sales tax would replace the existing sales tax. It would allow us to reduce middle income tax rates. It would also allow us to remove the surtaxes. I am saying now that because of the seriousness of our financial position, it does not appear that we will be able to eliminate those surtaxes. We have a serious deficit problem.
Well, the Hon. Member is shaking his head, Mr. Speaker. He disagrees that we have a serious deficit problem. He disagrees that we have a debt problem. He does not understand the fact that 12 cents of every tax dollar was going to pay interest about 20 years ago. That has now increased to 35 cents of every tax dollar. If this Hon. Member does not understand the implications of that, and says that we still do not have a serious debt problem, he is in Alice In Wonderland.


John Edward Broadbent: The Minister of Finance used to have credibility. According to the Minister, we had a deficit problem last fall. It did not only appear in the last couple of months. It was last fall that the Minister of Finance was saying these things, and the Chairman of the
May 5, 1989

Finance Committee was telling the truth. I say to the Minister of Finance that we know who was telling the truth.


Some Hon. Members:: Hear, hear!


IMPACT OF SALES TAX ON MIDDLE-INCOME FAMILY
John Edward Broadbent: Mr. Speaker, would the Minister admit to Canadians today that with his new sales tax, the average family will pay $1,000 more?


Michael Holcombe Wilson: Mr. Speaker, let me just read from the Budget here. The Government's goal is to ensure that families earning less than $30,000 per year-that's the average income in the country today-will be better off- b-e-t-t-e-r off as a result of the implementation of sales tax reform.


John Edward Broadbent: Tell the truth.


Michael Holcombe Wilson: I am prepared to read it more slowly if the Hon. Member missed it, but there it is in black and white.


THE BUDGET
Mr. John Manley (Ottawa South):: Mr. Speaker, my question is also for the Minister of Finance and it relates to the sales tax scam that has been unearthed in recent days.
We went through an election campaign when it was clearly stated that the purpose of this sales tax was to replace the manufacturers' sales tax. We are now hearing that it is intended to replace a whole series of other sales taxes and other problems that the Minister himself has created.
We now hear that the surtaxes will not be replaced by the sales tax. We heard during the election campaign that the sales tax was only to replace the manufacturers' sales tax. When can we start to believe the Minister? When is the Minister finally going to tell us what this sales tax is intended to do?


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member might have a little better response to his questions if he would state the facts accurately.
Oral Questions
He has stated that during the election campaign and prior to it I stated that the new sales tax would only replace the existing sales tax. That is totally wrong. I have said time and time again, and the people in the Press Gallery are getting tired of listening to me say it, that it would replace the existing sales tax, plus fund a new generous refundable sales tax credit, plus it would allow us to reduce the levels of taxation for middle-income earners.
Those two additional amounts would be funded by the new sales tax system. I have said that time and time again.


INCREASE IN TAX
John Paul Manley: Mr. Speaker, revenue- neutral takes on a new meaning every time the Minister speaks.


Some Hon. Members:: Hear, hear!


John Paul Manley: Reform for the manufacturers' sales tax was justified on the basis that this heinous tax was a silent killer of jobs. If that is the case, how can the Minister justify raising it from 9 per cent in 1984 to 13.5 per cent in this Budget?


Michael Holcombe Wilson: Mr. Speaker, I have made no bones about the fact that we have to raise this tax because we have a serious debt problem. That is the purpose that was set out in this Budget last week.
The Hon. Member says that it is a silent killer of jobs. That is correct. Now I would hope that the Hon. Member would be supporting us with the introduction of the new goods and services tax, as the Members of the Finance Committee did on a unanimous basis in the last Parliament, signed by the two finance critics of the Liberal Party, stating that we must change the old sales tax, we must get rid of the manufacturers' sales tax, and we must bring in a new sales tax.
I have yet to hear what new sales tax the Liberal Party would bring in, because it would be exactly the same sales tax that is proposed in this Budget.


THE BUDGET
Ms. Catherine Callbeck (Malpeque):: Mr. Speaker, my question is for the Minister of Finance. In the recent Budget the people of Prince Edward Island have seen their funding for hospitals and education cut back, the

Oral Questions
regional development funding cut back, their taxes go up, and then the final blow, the closing of the Canadian Forces Base in Summerside.
I want to ask the Minister does he realize that 1,300 jobs will be cut out of Prince Edward Island with the closure of this base? Does he realize that $50 million annually will be taken from the economy of the province?
If he does realize these things, why did the Government decide to close the Canadian Forces Base at Summerside?


Michael Holcombe Wilson: Mr. Speaker, I am sure my colleague, the Minister of National Defence, would like to address part of the question, but let me be quite clear: The Hon. Member has just said we are going to cut the established programs financing for Prince Edward Island. It is going to go up by $5 million in 1989-90, and another $5 million in 1990-91. That is a five per cent increase. The equalization program that we have not changed will go up $12 million in this current year and another $10 million next year. Surely the Hon. Member should not be distorting the facts by saying that we are going to cut this funding. The funding is going to continue.
The Hon. Member refers to a range of issues that relate to Prince Edward Island. She could make those same comments about a range of issues that affect a number of provinces, all the provinces. We know that the Budget itself is going to have an impact on all parts of the country, but that is the nature of the debt problem that we have and the fact that 35 cents of every tax dollar is now going to pay the interest. That is more money than we spend on old age security, family allowance, medicare, and social assistance.
Surely we have to get that amount under control so that we can maintain these programs which are so important to people right across the country.


IMPACT ON PRINCE EDWARD ISLAND
Catherine S. Callbeck: Mr. Speaker, the Minister's own papers show that the province of Prince Edward Island is going to receive less money than promised. My question to the Minister is the following.
The Minister stated that we have to reduce the deficit. We all have to take part in shouldering this burden. Why does he expect the province of Prince Edward Island to shoulder such a large and unreasonable part of this burden?
Will the Minister stand in the House today and admit that the closure the CFB base at Summerside is unfair to the people of Prince Edward Island?


Hon. Bill McKnight (Minister of National Defence):: Mr. Speaker, my colleague has addressed some of the concerns expressed by the Hon. Member from Prince Edward Island. I would not like to leave people with the understanding that this new found interest by her and her Party in national defence is for any other reason than a provincial election being held inPrince Edward Island.
The people who have the ability and the requirement of the service and a commitment to this country, the men and women who serve inthe military today-I see Members in the Liberal Party smiling-the men and women who serve in the military today deserve more from the people of Canada than to be located in regions for economic development. What they deserve is the ability as Canadians to share the load in getting the debt down.
By restructuring the military, we hope to be able to bring into proportion the Operations and Maintenance and the personnel in order that we can provide the equipment necessary for the men and women who serve all Canadians.


THE BUDGET
Audrey Marlene McLaughlin: Mr. Speaker, my question is directed to the Minister of Finance. Once again, Canadians are seeing another broken promise by the Government. During the election the Minister said that the surtax on personal income tax would come off when the sales tax was imposed. How are Canadians supposed to believe the Government when temporary is now permanent, $10 billion is not $10 billion, revenue-neutral is not revenue-neutral?
Yesterday the Minister indicated that the temporary surtax on personal income would not necessarily be removed with the imposition of the sales tax. Will he confirm that he does not intend to keep his promise and the personal income surtax is now a permanent feature of the tax system?


Michael Holcombe Wilson: Mr. Speaker, I will tell the Hon. Member that the promise that I definitely will keep is that we will continue to provide good financial economic management for this
May 5, 1989

country so that we can continue to see the growth in this economy and the jobs that come with it.
The Hon. Member knows full well that we have had a completely different set of circumstances-


Simon Leendert de Jong: Six months ago.


Michael Holcombe Wilson: -with the high interest rates we have seen over the course of the past few months. That has knocked us off stride in our objective of getting the deficit down and getting the debt under control. Measures must be taken now to deal with that.
The Hon. Member's Party has been continually calling for lower interest rates, which we would like to get as well, but one cannot just dream down a road and say: "Let's have lower interest rates". We must bring in policies that will generate those lower interest rates. That is exactly what we are trying to do as a result of the Budget that was tabled last week.


TAX EQUITY
Audrey Marlene McLaughlin: Mr. Speaker, in 1986, over 6,000 wealthy Canadians did not pay any tax. The Minister, in his Budget, has increased the surtax, but I remind him that 8 per cent of zero is zero.
I remind him that Canadians are listening. Is this the Minister's version of tax fairness? When will he ensure that the wealthy pay their fair share?


Michael Holcombe Wilson: Mr. Speaker, let me point out to the Hon. Member what is in the Budget.


John Edward Broadbent: We know.


Michael Holcombe Wilson: We have brought in a high income surtax so that someone earning about $30,000 or $40,000 will pay $75, $85, $90 more in tax, but someone earning $100,000 will pay more than $1,000 more in tax, and someone earning $200,000 will pay more than $2,000 more in tax. Surely that indicates to the Hon. Member that we are asking those who can afford to shoulder a heavier burden in meeting this debt problem to do so.
What we have done in previous Budgets, beginning in October, 1984, is to continually weed out, identify and eliminate a number of tax breaks, tax preferences, tax loopholes that upper-income Canadians have been taking advantage of-
Oral Questions


Simon Leendert de Jong: Then you upped the rates. How can you stand there and give us that? How dare you stand up-


Michael Holcombe Wilson: If the Hon. Member who wants to be Leader of his Party-I can't think of a more frustrating position to be in-would listen to the answer, he has been on the Finance Committee and he knows the number of these tax preferences we have removed and identified. The Hon. Member should know that we have been taking action and will continue to take action.


Simon Leendert de Jong: What a bunch of bunk.


THE BUDGET
Mrs. Edna Anderson (Simcoe Centre):: Mr. Speaker, my question is directed to the Minister of Finance. Will he explain to the House the Government's rationale for involving family allowance and old age pensions for incomes over $50,000 as a measure of decreasing our national debt?


Michael Holcombe Wilson: Mr. Speaker, let me refer the Hon. Member to the statement in the Budget speech:
The central purpose of the social safety net is to assist those most in need, not to subsidize those with high incomes.
We have stated on many occasions in the House that the cost of servicing the government debt has gone up significantly as a percent of our tax dollars. For every tax dollar that we pay now, 35 cents goes to servicing the government debt. If we can control that amount, and this is one of those measures that will help us control the funded debt, we will be able to do more to maintain and enhance the social programs for those who are most in need, those who need the help the most.


THE ECONOMY
Mr. Francis G. LeBlanc (Cape Breton Highlands- Canso):: Mr. Speaker, in the absence of the Minister of Fisheries and Oceans, my question is directed to the Minister for International Trade. Many communities in Atlantic Canada face economic disaster because of quota reductions and a shortage of fish stocks in Atlantic waters.

May 5, 1989
Oral Questions
Already we have witnessed the disruption to the community of Port Mouton as a result of the closure by Clearwater of its fish processing plant there. Now the president of National Sea Products is warning of further lay-offs and plant closings.
Does the Government have a comprehensive plan to assist the unemployed in these communities? If so, will he tell the House what measures his Government will put in place to ensure that these communities do not follow the fate of Summerside?


John Carnell Crosbie: Mr. Speaker, the only information we have to date is what I suppose one could call a warning by the president of National Sea Products Limited that they have excess plant capacity, that markets have not been the best, the number of fish plants has increased in Nova Scotia and the cod stocks have gone down. He has not yet made any announcement of closures of any fish plants. However, if he does, then all the normal government programs will go into effect. The National Employment Service, the unemployment insurance programs, other adjustment programs will go into effect as they have in the past and as they will in the future.


FISH PLANT WORKERS-EFFECT OF NEW UNEMPLOYMENT INSURANCE REGULATIONS
Francis G. LeBlanc: Mr. Speaker, the proposed changes to the unemployment insurance program that were recently announced will mean that the unemployed fish plant workers throughout Atlantic Canada will need significantly more weeks to qualify for fewer weeks of benefits after having paid more in unemployment insurance premiums so that the Government can get out of contributing anything to the unemployment insurance program at all. This is at precisely the same time as unemployment rates are rising and major quota reductions are pointing to less work for these workers.
Will the Minister explain the fairness in that? Where is the justice in this so-called labour force development strategy?


John Carnell Crosbie: Mr. Speaker, as a result of the vastly improved employment record of the last three or four years, the Government's contribution to the unemployment insurance fund has been less and less necessary because the deficit no longer existed. The forecast for unemployment
in the area shows a slight increase over last year, but still a great improvement over the record of the Government that came before us. I do not believe that the dire forecast of the hon. gentleman will prove to be accurate.


THE BUDGET
Mr. Joseph Volpe (Eglinton-Lawrence):: Mr. Speaker, we have been witnessing today, as we have over the course of the last month, a Government telling us one thing and proceeding to do something else.
In the absence of the Minister of Employment and Immigration, my question is directed to the Minister of Finance. As an example of saying one thing and doing another, I draw the attention of the Minister to the fact that the Government has removed $800 million from the unemployment insurance fund to supplement the Government's past cuts in training programs. It has restricted eligibility for benefits-


Some Hon. Members:: Question!


Giuseppe (Joseph) Volpe: It has reduced the benefit period. In the interim this Budget proposes an additional cut of $2.9 billion in regional extended benefits. With the unemployment rate in the upswing-


Some Hon. Members:: Question!


Mr. Deputy Speaker:: Would the Hon. Member please put his question.


Giuseppe (Joseph) Volpe: Mr. Speaker, with the unemployment rate on the upswing in eight of ten provinces, will the Government tell Canadians that the Government does not intend to abandon its responsibilities in employment programs?


Hon. Jean J. Charest (Minister of State (Youth) and Minister of State (Fitness and Amateur Sport):: Mr. Speaker, I do not know where the Hon. Member has been since the House was reopened.
It seems to me that the Minister of Employment and Immigration announced a revamping of the Unemployment Insurance Act so that we could invest more money-much needed money-into training and retraining, while maintaining at the same time the level of commitment that we have had for the Canadian Jobs Strategy that now stands at approximately over $1.7 billion.
May 5, 1989

The change in the UI Act and the new reform in human resource strategy will enable the Government to bring forward over $800 million of new money so that we can help people move from unemployment into the new job opportunities that will be present in Canada because of the great Budget of the Minister of Finance and everything that the Government has been doing.


Some Hon. Members:: Hear, hear!


INCREASE IN UNEMPLOYMENT RATE-GOVERNMENT'S POSITION
Giuseppe (Joseph) Volpe: Mr. Speaker, my question was about his funding sources. Obviously, the Minister did not understand the question.
In fact, his indignation proves that his policy and this Government's policy are going to create poverty. The Minister chooses to ignore the dismal reality, just as he chooses to ignore his responsibilities.
Mr. Speaker, I would like to know whether the Minister thinks it is fair, considering rising unemployment, that women, young people and the disadvantaged should be made to suffer for this Government's incompetence.


Jean J. Charest: Mr. Speaker, I suppose the Hon. Member for Eglington-Lawrence has the excuse of not having been in the House when, in the past, his own Party made predictions on the impact of the Budgets of the Minister of Finance.
Mr. Speaker, I was here, and I can give you the benefit of my experience. In 1985, when the Minister of Finance brought down his Budget, the Liberal Party's finance critic predicted that 100,000 jobs would be lost. On every Budget night, the New Democrats said that hundreds of thousands of jobs would be lost.
Mr. Speaker, since then 1,300,000 jobs have been created in Canada, and that is since this Government came to power.
Oral Questions


THE BUDGET
Mr. Lorne Nystrom (Yorkton-Melville):: Mr. Speaker, my question is directed to the Bay Street boy, the Minister of Finance.
I want him to answer a specific question in the House today, if that is at all possible. Back in October of 1988 in the election campaign the Minister said and I quote: "The bottom line is that the sales tax will not be used to raise the revenues of the Government of Canada. Mr. Blenkam is not speaking for the Government of Canada, I am speaking for the Government of Canada".
What I want to know now is whether or not the Minister will admit in the House today that the national sales tax, the goods and service tax, will not be revenue-neutral, that the Chairman of the Finance Committee spoke the truth, and that the Minister is now in the process of breaking a commitment to the people of Canada.


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: Mr. Speaker, this is the third member of the New Democratic Party who has distorted what I said during the election campaign.


John Edward Broadbent: They are your words.


Michael Holcombe Wilson: The Leader of the New Democratic Party says that they are my words. If he would read my words in total then I would accept it, but he has not. He is selectively reading them so that it distorts what I said.
I will repeat what I said. We are going to bring in a new sales tax which will replace the old sales tax, which will allow us to reduce middle-income taxes, and which will allow us to eliminate the surtaxes.
I have said recently that because of the debt problem we are not going to be able to eliminate the surtaxes as quickly as we would like. The number of $10 billion is taken totally out of context. The Leader of the New Democratic Party is saying, as is his finance critic, that that was $10 billion in additional revenues-


John Edward Broadbent: No, we are not.

May 5, 1989
Oral Questions


Michael Holcombe Wilson: -over and above what we intended to raise. That is totally wrong.


John Edward Broadbent: We did not say that.


Michael Holcombe Wilson: The Hon. Member says he did not say it. He is distorting totally then what he just said when he asked me the question five minutes ago.


EFFECT ON INFLATION RATE
Lorne Edmund Nystrom: Mr. Speaker, the whole country remembers that he did say that it would be revenue-neutral. He has now admitted that he is breaking that commitment to the people of Canada.
What I also want to know is this. In the Finance Committee yesterday morning the Minister said that this new sales tax would add 2.5 per cent to 3 per cent to the inflation rate. We all know that Mr. Crow puts up interest rates when the inflation rate goes up. Can the Minister now tell the people of Canada what impact this increase in the national sales tax will have on interest rates in Canada? Because inflation is now a problem in the Minister's mind will he at least delay the national sales tax until the inflationary pressures ease up?


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: Mr. Speaker, again, the Hon. Member is quoting selectively what I said in the committee yesterday.


Lorne Edmund Nystrom: Exactly what you said.


Michael Holcombe Wilson: What I said, and I repeat, yes, the inflation impact-one shot over a very short period of time-is in the order of 2.5 per cent to 3 per cent.
What I went on to say is that the Governor of the Bank of Canada, the Bank of Canada, will be looking at the underlying impact of a variety of things on the performance of the economy, the underlying demand growth in the economy,before deciding what the levels of interest rates should be, what the conduct of monetary policy should be. The Governor of the Bank of Canada understands that that is a one-shot increase in prices.
There is an ongoing set of circumstances in the economy that are far more important to the decisions that are related to the conduct of monetary policy. That is what he will be following.


CANADA POST
Ms. Albina Guarnieri (Mississauga East):: Mr. Speaker, my question is directed to the Minister responsible for Canada Post.
Workers at the Canada Post Gateway plant have reported systematic harassment by management in a clear effort to break the morale of both employees and the postal union. Today's The Toronto Star reports that there is currently an investigation under way to substantiate allegations that supervisors are accepting bribes to facilitate employee hiring. Will the Minister now confirm that an investigation is under way?
Given that my constituents have been coming to my office complaining that they have lost their jobs at Gateway because they have supposedly failed aptitude tests, can the Minister assure us now that employees of Canada Post who have lost their jobs as a result of these less than credible aptitude tests will have their dismissal reviewed by an independent arbitrator to ensure that these individuals were not victimized? Would the Minister agree that stamps are not the only things that have to be licked in order to keep the mail going?


Hon. Harvie Andre (Minister of Regional Industrial Expansion and Minister of State for Science and Technology):: Mr. Speaker, some days ago a member of my Party reported to my office that in fact there were suggestions of job buying or job selling. The Post Office undertook an investigation. This morning, charges were laid against a Post Office employee.
I do not think it would be appropriate for me to provide any more detail than that at this point in time.


SCOPE OF INVESTIGATION-MINISTER'S POSITION
Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, I have a supplementary for the Minister responsible for the Canada Post Corporation, on the same case.
Could the Minister inform the House whether the investigation deals only with the Gateway Post Office or whether other post offices in Canada are included? If so, could he tell the House whether he has the impression that this problem exists beyond the confines of the Canada Post Corporation?
May 5, 1989


Harvie Andre: Mr. Speaker, if the Hon. Member is aware of illegal activities in other postal operations-


Don Boudria: I am asking you.


Harvie Andre: -if he will bring them to my attention or or that of the Post Office, an investigation will be undertaken.


Don Boudria: I should have asked the question slower.


Harvie Andre: In response to information provided, an investigation was undertaken and charges laid.
The Hon. Member has asked whether the Post Office is engaged in a witch-hunt across the country. I am not aware of that.


Mr. Deputy Speaker:: If the House agrees we will have one question from the Hon. Member for Essex-Windsor and one question from the Hon. Member for Oxford.


EMPLOYMENT
Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, I have a question for the Minister of Finance. The unemployment figures released today show a major increase from March of this year, plus a major increase from April of last year.
The Government said that jobs would increase under the Free Trade Deal and now, for the first time in three years, jobs have decreased by 54,000.
I ask the Government and the Minister: Do they not recognize that high taxes and high interest rates are pushing this country into a major recession which will hurt thousands of people?


Michael Holcombe Wilson: Mr. Speaker, maybe the Hon. Member could let me know from where he is getting these figures. In April, 1988, the level of employment was 12,188,000.


William Warren Allmand: What was the rate?


Michael Holcombe Wilson: It was about the same as it is today.
In April, 1989, the level of employment was 12,384,000. That adds up to, I believe, 196,000 more people working today than was the case 12 months ago.
Points of Order
Surely the Hon. Member can understand that tremendous progress.


BROILER HATCHING EGGS AND CHICKS
Mr. Bruce Halliday (Oxford):: Mr. Speaker, my question is for the Minister for International Trade. For some months now farmers in my riding and across the country who raise broiler hatching eggs and chicks have been asking to have their product placed on the import control list. Can the Minister tell us if and when he may be able to recognize their request?


John Carnell Crosbie: Mr. Speaker, I am delighted to have received the only reasonable question this morning.


Some Hon. Members:: Oh, oh!


John Carnell Crosbie: The situation is that broiler hatching eggs and chicks will be placed on the import control list effective May 8, next Monday.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: There are already import controls existing on chicken, turkey, eggs and related products to support marketing plans established under the Farm Products Marketing Agencies Act. We believe the measure to be consistent with our rights and obligations under the GATT. We are operating under Article XI of the GATT.
We have taken steps to inform our trading partners of the changes to the import control list. We will give the domestic industry administrative details of the new controls, including the level of import quotas within the next few days.
I thank the hon. gentleman for his question which shows his interest in this subject.


POINTS OF ORDER
John Harvard: Mr. Speaker, with your permission I would like to make a revision to a figure I used in remarks I made earlier today. A figure of 120 was used. The figure ought to have read 20.


COMMENTS MADE DURING QUESTION PERIOD
Steven W. Langdon: Mr. Speaker, during the Question Period certain statistics were

May 5, 1989
Petitions
thrown out by myself and the Minister of Finance. I simply want to make the point-


Charles Joseph Clark: Order!


Steven W. Langdon: -that the change from March of this year to April of this year was a decrease of 54,000 jobs.


Mr. Deputy Speaker:: The Chair finds that this is a matter of debate.



ROUTINE PROCEEDINGS


Jean J. Charest: Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the Government's response to two petitions.
(Editor's Note: See Today's Votes and Proceedings.)


Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, I have the honour to table several dozen petitions. The petitioners state that when the South Moresby Park Agreement was signed the federal Government committed itself to spending $20 million or more to explore for minerals and hydrocarbons in this first national marine park. Allowing for mining or drilling in parklands sets a completely unacceptable precedent and renders the whole concept of park creation meaningless. Moreover, exploring for hydrocarbons in these waters is too dangerous. The West Coast of British Columbia is Canada's most earthquake prone region, the Queen Charlotte Island Basin has an even higher earthquake activity than the San Andreas fault. Hecate Strait has one of the roughest and most unpredictable seas in the world.
Therefore, the undersigned do not want anymore hydrocarbon exploration activities to take place in the coastal waters, be they at the initiative of the public or the private sector, nor do they want a Government to pay for any such activities from this day on, August 12, 1988.
These petitions are signed by several hundred people residing in British Columbia. I am pleased to table their petition in the House.


Mr. Jim Hawkes (Calgary West):: Mr. Speaker, it is my pleasure today to table a petition signed by some 1,800 mechanics from the Province of Alberta. They come from our cities and from our small towns such as Hussar, Bassano, Brooks, Vulcan and many other smaller communities.
The mechanics of Alberta would like the Government to pay attention to their request for relief under the Income Thx Act for the cost of their tools. It is a cost of gaining employment which is unique to the mechanics' profession. I hope the Government will give it every consideration.
I might point out that this is the second petition of this kind. Mr. Chris Grieve, a mechanic in the Province of Alberta, deserves a lot of credit for getting over 3,000 signatures from mechanics in our province to sign this petition.


Mr. Iain Angus (Thunder Bay-Atikokan):: Mr. Speaker, pursuant to Standing Order 36,1 have the honour and duty to table two sets of petitions, both having been certified correct as to form and content by the Clerk of Petitions. The first is signed by residents of Thunder Bay, Ontario, Kakabeka Falls, Kaministiqua, Gilles, Murillo and rural areas around Thunder Bay. The petitioners point out that an effective and efficient national passenger rail system in Canada is a desirable form of transportation for many Canadians. They go on to note that this Government has refused to provide VIA the necessary support to fully realize its potential to develop the kind of national passenger network that Canadians want and deserve. They conclude by calling upon Parliament to live up to its original pledge to support VIA Rail, to abandon plans for further cuts to VIA's budget and provide the necessary resources to allow VIA to operate as a modem effective transportation company rather than a museum.
The second petition is signed by residents of Trail and Revelstoke, B.C. as well as other parts of British Columbia. The petitioners point out that the Conservative Party of Canada said in its report on passenger rail services that the federal Government has the responsibility to ensure that rail passenger services in Canada be retained, modernized and expanded as an important part
May 5, 1989

of our national transportation system. They call upon the Government to live up to its original pledge and support VIA Rail, and to abandon plans for further cuts to VIA's budget.


[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Jean J. Charest: Mr. Speaker, there is a question that I would ask you kindly to call-starred question No. 42. And if you allow me, Mr. Speaker, I have a written answer here that I could table to show it has been read right here in the House.


[Stage Direction]
Question No.42-Mr. Wappel:
On March 14, 1989, did the Minister of State for Small Business
and Tourism release an information package entitled Canada Grows
With Tourism and, if so, what was the (a) per-unit (b) totalproduction cost (c) total number of units produced?
Jean J. Charest: The information package entitled Canada Grows With Tourism was prepared by the Tourism Industry Association of Canada (OTIA) for National Tourism Week (NTW), which will take place from May 15 to 21, 1989. The aim of NTW is to make the importance of tourism for Canada better known. The information package was distributed throughout Canada to help reach this objective.
As part of its involvement with NTW, Tourism Canada financed the production of some items in the information package, in particular:
- the folders
-the summary of last year's activities -model speeches -the guide of suggested activities -the brochure on tourism
The cost of Tourism Canada's participation is as follows:
Supply
(a)	unit cost (per package)-$10.92
(b)	total production cost-$65,540
(c)	number of units produced-6,000

In addition, Mr. Speaker, with the indulgence of the House, I would ask your permission to return to Motions in order to present a motion that should have been presented when you called for it.


Mr. Deputy Speaker:: Does the House agree?


Some Hon. Members:: Agreed.


BUSINESS OF THE HOUSE
Jean J. Charest: Mr. Speaker, I would like to present this motion with consent and after consultations with both opposition Parties. The motion reads:
That any recorded division if required or requested on Thursday, May 11, 1989, during or at the conclusion of that day's resumed debate on the Budget, Ways and Means Proceeding No. 1, stand deferred until 6 p.m. on Monday, May 15, 1989.


Mr. Deputy Speaker:: Does the Hon. Deputy Government House Leader have the unanimous consent of the House to move the motion?


Some Hon. Members:: Agreed.


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


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Dingwall:
That, in the opinion of this House, the claw-backs proposed by the Minister of Finance with regard to the Old Age Security pensions and Family Allowances (1) undermine all Canadian social programs; (2) make easier future incursions against Old Age Security pensions and Family Allowances as well as other social programs, including
[Stage Direction]
May 5, 1989
Supply
medicare; (3) will fall most severely on Canadians of moderate means while costing the wealthy little; and
That this House, therefore, condemn the Government for this attempt to violate this sacred trust.
Mr. Deputy Speaker:: Before we started Question Period there were 10 minutes left in the question and comment period of the speech from the Hon. the Minister of National Health and Welfare. On questions and comments, the Hon. Member for Kamloops.


Mr. Riis:: Mr. Speaker, I have listened carefully to the Hon. Minister's presentation, and regardless of the points he was making, the truth of the matter would be that a number of senior citizens will not be retaining their OAS cheques as a result of this Budget measure, in terms of what they call a claw-back provision for pensioners.
I would like to ask the Minister the following question, based on a little historic precedent. Back in 1925 when this began during a Liberal minority Government, a rather visionary labour Member of Parliament who with his partner, held the balance of power, introduced an Old Age Pension Bill. It passed the House in 1926 with a Liberal minority Government. At that time it was opposed by the Conservatives in the House. It was then blocked in the Senate by the Conservative majority of the day, much the same as the Liberal majority blocked the free trade deal.
An election was called and the arguments made at the time by Conservative Senators primarily were that any idea of a pension would hurt families because it would remove the obligation of children to care for their elderly parents. They also said that if we gave a pension to everyone, some criminals would get the pension and that would not be right. It would encourage people not to save to prepare for their retirement years.
An election was called and not suprisingly, the Conservatives were absolutely trounced and Mackenzie King reintroduced the Old Age Pension Bill. Even then it was opposed unanimously by the Tories in the House. It was even opposed again by the Conservatives in the Senate but they reluctantly let it pass because the people had spoken in the general election.
I remember reading my history, although I was not around in those days, that the Conservatives opposed the principle of giving a pension to anybody. Well, a lot has happened since then.
I would like to ask the Minister, is this not a reflection of that old Conservative view that charity has a place but any idea that everyone would actually collect a pension cheque based on their rights as Canadian citizens is something that the Conservative party simply cannot accept?


An Hon. Member:: That is right.


Henry Perrin Beatty: No, Mr. Speaker, it is not. I was in intrigued that the hon. gentleman should reach back to I believe 19-


Nelson Andrew Riis: 1925.


An Hon. Member:: That is before you were bom.


Henry Perrin Beatty: Yes, it was some 24 years before I was bom and the hon. gentleman is still living in the past. He does not recognize the realities of 1989 are markedly different from the realities of 1924. For example, the hon. gentleman does not seem to be aware of the fact that in this Budget the Government sets aside a further $865 million in payments to seniors because we believe that this generation has an obligation to seniors who saw us through the Depression and who helped to build for us the sort of society that my generation is privileged to have today.
There is a fundamental question here and that is whether or not we believe as Members of Parliament and as Canadians that in the attack that we make on this mountain of federal debt those of us who are better off should be asked to carry more of the burden. The historic position of the New Democratic Party had been that wealthier Canadians should be asked to pay more. Indeed, the Member for Yukon (Ms. McLaughlin), today was up on her feet demanding-


An Hon. Member:: Income tax.


Henry Perrin Beatty: Exactly. Demanding that taxes should be increased upon wealthy Canadians.
They talk out of both sides of their mouths. When the Minister of Finance (Mr. Wilson) does precisely that and says that the top 4 per cent of pensioners will be asked to contribute some of that pension back, they cry foul and they say that we are oppressing the rich by doing this and that it is unacceptable to them.
The 96 per cent of Canadians who are not touched by this, the lower 96 per cent, recognize that it is fair that those of us who are wealthier should be asked to carry our fair share of the burden. Our policy in a society which continues to age and age gracefully is to protect
May 5, 1989

pensions for the future by ensuring that we can get a handle on that mountain of federal debt.


Mr. Deputy Speaker:: The Hon. Member for Scarborough West on a question or comment.


Thomas (Tom) William Wappel: Mr. Speaker, I am not going to make comments but I am going to ask two very specific questions of the Hon. Minister.


Henry Perrin Beatty: Thank you.


Thomas (Tom) William Wappel: My colleague from Cape Breton-East Richmond in his speech earlier in the day used certain figures. I would like to know if the Hon. Member agrees with the figures that he used, which I will cite in a moment. If he does, can he provide an explanation. Namely, is it a fact that Canadians earning $23,000, around the poverty line, have since 1984 had their taxes increased by over 60 per cent, while those earning $100,000 or more have had their taxes increased by only 8 per cent, plus or minus a percentage? Is that true, and if it is what does the Hon. Minister have to say about it?
The second question is in connection with his remarks in his speech where he pointed to the Members on this side of the House and accused us of being blind, partisan and indicating that we were opposed to the Government's Budget for partisan reasons. I would like to ask him if he is aware of the comments of the Member for Calgary Northeast (Mr. Kindy), who is a member of his own Party, who is quoted in The Calgary Herald of April 30 as having said that he was opposed to the new sales tax which the Government was proposing because he feels that it is "regressive because it's on the backs of consumers".
I again quote:
Calling the tax unfair and the wrong way to reduce the federal deficit, Kindy said it will involve hiring another 4,000 civil servants and cost $200 million to administer.
I do not consider that partisan since he sits on that side just a few rows behind the Hon. Minister. I would like the Hon. Minister's comments on his own Member's statements.


Henry Perrin Beatty: I would be delighted to respond to these two questions. I will leave to the Parliamentary Secretary the Minister of Finance (Mr. Vincent) comments with regard to the taxation system in general. I will stick, perhaps, to my particular area which is the area of social
Supply
programs and ensuring equity for people who are most in need.
The hon. gentleman professes a concern for Canadians who are most in need, particularly low-income Canadians. Yet his Party opposes a measure in this Budget, and indeed that is the whole point of the debate today, their opposition to a measure which will try to protect the pensions, the family allowances and the medicare of lower-income Canadians by asking higher-income Canadians to pay higher taxes on their old age pensions and on their family allowances.
You cannot have it both ways. Either you believe that lower-income Canadians should be protected and those of us who can afford to pay should be asked to pay more, or you do not. You cannot talk out of both sides of your mouth. What I proposed earlier in the day was that we apply one simple test to everyone who speaks today. Do they candidly and honestly state what they would do to deal with this mountain of federal debt? Do they propose that it can be dealt with simply by patent remedies, patent medicine or do they recognize that it is a serious problem and serious solutions have to be followed?
There is room on all sides of the House for debate and for disagreement as to how best deal with this issue. I made that point in my remarks earlier. But where there is not room is for us to simply substitute partisan posturing for policy.


Hon. Members:: Hear. Hear!


Henry Perrin Beatty: Canadians have a right to much more than that.
An Hon. Member Right on.


Mr. Deputy Speaker:: The Member for Vancouver East on a question or comment.


Ms. Mitchell:: Mr. Speaker, I would like to ask the Minister, unless I missed it, why he did not comment or explain at all to parents in Canada, particularly to many women who are in the work-force or would like to get into the work-force, about this Government's promises for five or six years that child care would be a top priority, that it was essential to equality in this country, and furthermore as the special Committee on Childcare documented, it is very damaging to this generation of children not to have good quality care that is affordable. I do not know about the Minister's experience. I hope he is talking to people who need child care, but every week in my riding, I hear from women on welfare

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and indeed even professional women who simply cannot find any space for their children. These children are literally at risk as a result.
First, I would like to ask the Minister why the Government cut this program out, especially since he is talking about equity for those in greatest need. He is talking about the children of the future, but the Government surely cannot ignore the million and a half children at present who need child care desperately. Many of them, one in six, are poor and their mothers are locked in the welfare system, which is also the Minister's responsibility. They have no opportunity to get into training or to get out of the welfare system and into work if they do not have good child care.
Why did the Minister not at least use the $2.4 billion which is going to regressive child care tax breaks to those wealthier Canadians, not necessarily rich, breaks which ignore the ones with the greatest need? That measure, of course, creates no new spaces for child care.
The Minister was good at fighting for nuclear subs. Why did he not fight hard for children and to protect that money which was for child care spaces? I say that even though I did not agree with the way the Bill was being implemented? However, the money should be there and we should work out a sensible plan and build for the future. By not doing that, he is indeed putting those in greatest need at great risk.


Henry Perrin Beatty: Mr. Speaker, the Hon. Member is quite correct in saying that she simply missed what I said in my speech with regard to child care, because I did indeed answer that question in the context of my remarks. Let me review first for the Hon. Member what is being done. She criticizes the child tax credit. Some 90 per cent of the assistance delivered-


Margaret Anne Mitchell: No, child care expenses.


Henry Perrin Beatty: Yes, that is exactly what she was saying. She referred to a figure of $2.4 billion-


Margaret Anne Mitchell: I am talking about child care expenses.


Henry Perrin Beatty: The Hon. Member may deny it now, but she referred, and she can check the "blues", to a figure of $2.4 billion for tax assistance. This goes through in two ways. The first is through the child care tax deduction, but the other 90 per cent is delivered through the child tax credit. If the Hon. Member proposes that we cut that $2.4 billion worth of assistance, she would be taking it
away from the child tax credit which provides the majority of assistance to people on the low end of the income scale. I hope she will reconsider that.
Second, the $100 million child care initiatives fund remains in place. Third, the Canada Assistance Plan, which is aimed to provide assistance for child care to those people most in need, remains in place. We have paid in the past year some $200 million under CAP and we expect a 20 per cent increase this coming year.
Finally the Hon. Member asked about the children of the present. Indeed, every child in Canada today has a debt in his or her name in Ottawa of $12,300, a debt that increased $3 in the last 24 hours and will increase by $3 in the next 24 hours and in each subsequent 24 hours. That is precisely the issue.
If Hon. Members opposite claim to be concerned about young Canadians and about the future, then they have an obligation to stop stealing from those children, to stop running up a mountain of debt which cripples their ability in the future to build something for themselves. It is the height of irresponsibility for those of us who serve in Parliament to steal from the children by refusing to accept our responsibility to manage the affairs of Canada responsibly.


Nelson Andrew Riis: Mr. Speaker, it is not a pleasure to rise today to speak on what the Minister of Finance (Mr. Wilson) has termed the clawing back of old age pensions and the clawing back of family allowance payments. I want to begin my remarks today by saying that being a Canadian means something to Canadian citizens. The fact that a person is a Canadian citizen means some very important things.
We are recognizing not only that people who live in Canada are proud to be Canadian but that there are thousands and tens of thousands and, I suspect, millions of people in the world who would love to be Canadian citizens. The reason for that is that being a Canadian citizen means certain things. It means we have a set of responsibilities as Canadian citizens, but it also means that we receive certain rights and certain benefits. There are certain aspects of being a Canadian citizen that we perceive as being good.
Being Canadian citizens means that our children will have access to elementary and high school education. It does not matter if we are rich or poor, if we live in eastern or western Canada. It does not matter about our ethnic or religious backgrounds. Our children will be
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able to go to school, and the cost of that school will come out of general revenue.
There are other very important rights. There is the right of families with children to receive family allowance support. The Government of Canada wants to invest in this most important resource and is prepared to pay a certain amount to the family during the important formative years of children to offset some of the costs that a mother or father or both will have raising children. That is a right that Canadian citizens have. We are proud of that right.
We also have access to police protection and to other forms of security in our communities including community services and a variety of social services. Again it does not matter whether we are rich or poor, where we live or what our backgrounds are, we have equal access to those services and that protection. The police never ask, whether you have paid your taxes. They never ask, what your religious affiliation is. That is a service Canadian citizens get automatically.
The same is true of medical care and hospital care. Canadian citizens are able to walk into hospitals if in need and be cared for, regardless of who they are and their level of income.
Fundamental to our rights is the right to obtain an old age pension cheque. A citizen who is 65 years of age and has worked to build what we are proud of in Canada is entitled to an old age security cheque. We have had that right for decades, and we had to struggle originally to get that concept introduced. People across Canada said that this ought to be a fundamental right that goes with citizenship in Canada. It is. That is why Canadians are proud of our achievements and proud of what it means to be a Canadian. It is an important symbol.
Regardless of who one is, whether one is from a rich class, from a disadvantaged group, or from a certain community, just being a Canadian citizen makes one eligible for these basic fundamental rights. It is a real framework of security and protection, and this framework creates a decent standard of living for all Canadians. It gives Canadians peace of mind to know, for example, that if they work in their country, help build our country of Canada, when they reach age 65, they will receive pension cheques from the people of Canada, not from the Government but from the country they helped build. That gives older people real peace of mind, a real
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sense of security. It gives them real hope for the future. That is what it means to be a Canadian today.
All other countries do not have these rights. As a matter of fact, in most other countries in the world, those rights of citizenship are not in existence. Those rights are not found in the United States. Yes, Americans share some of our rights like freedom of speech, freedom of movement, and political and religious freedom. Those are other fundamental rights that we have in our country and we share them with the United States.
Do they have universal hospital care in the United States? There are many cases where people are rushed to hospital and the doctor meets them at the door and asks for their credit card and, it they do not have a credit card, they will not get medical care. We fought against that mindset. We avoided that market-place health care model.
We know people who have become sick in the United States and have literally bankrupted their families by paying for the required health care because they did not have universal medical insurance in that country.
What about old age pensions? Do people in the United States have an old age pension system like the one we have in Canada? The answer is no. They have a contributory pension plan to which they contribute as they work, a pension like the Canada Pension Plan. They will receive pensions, or they will have a means test such as our means test for the Guaranteed Income Supplement. However, when they reach age 65 they do not automatically get an old age pension cheque in the United States.
This is what it meant to be a Canadian-it was one of the few countries in the world where the pension comes with citizenship, but no more. The Conservative Government of the day has broken that right of citizenship.
My dad is 85 years old. He has told me about the old days when the elderly had to take a means test. They had to prove that they were poor enough to qualify for a cheque. He said that we do not want to see that kind of day return to Canada.
My dad is not happy these days because that is exactly what this Government has introduced-a type of means test which says that certain senior citizens will not get their old age pension cheques in the future. That is what

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it means; that is what they have done. The people of Canada have been misled.
On March 7, 1984, the Prime Minister said: "Our position is simple and straightforward. We are in favour of universality in social programs, and it shall not be touched". Then, not long ago, on October 15, 1988, in Summerside, P.E.I., the Prime Minister told a group of seniors: "Let me say a special word to the senior citizens. In the future Canada will be doing more, not less, for all of you. As long as I am Prime Minister of Canada social benefits, and especially those for the elderly, will be improved, not diminished by our Government which is committed to social justice and fairness for Canadians".
The Prime Minister was not telling the truth. There is no other way to say it. I hate to use that term to describe the Prime Minister of our country. Elowever, he told senior citizens that he would never introduce a program where they would not get their old age security cheques, and he has done just that. Some 128,000 pensioners in Canada will lose part or all of their old age security cheques as a result of this Budget, what they call the claw-back provision. They will have their pensions or part of their pensions clawed back, as the Minister of Finance has described it. As far as family allowances are concerned, 575,000 families will have all or part of their family allowances clawed back. That is the reality.
For the moment that is what this Budget does, but we know that there will be another Budget next year and the following year; there will be a Budget every year into the future. While 128,000 pensioners will be hit as a result of the 1989 Budget, ten years from now, if nothing else changes, the number will increase to 300,000 and in twenty years over a million pensioners will have all or part of their pension cheques clawed back by the federal Government. Those are the figures of Statistics Canada.
There is another sinister element. Today the Government has said that if they make in excess of $50,000 it is clawing back their old age security cheques. What will be in next year's Budget? Will it lower that amount to $40,000, to $30,000 and then to $25,000? Why not? Why should we trust this Government to do anything but that? It promised our seniors that it would never do what it has just done.
We do not have enough paper in this place to list all the broken promises we have seen from this Government in the last four years. Why would any pensioner find any comfort in a Government saying that it is $50,000 now and that is it? It has not said that, by the
way; it has given no assurance that that is to be the cut-off. TOday it is $50,000. Next year it could be $40,000 and $25,000 just as easily. Once this idea of universality is broken it is easy to erode it further. I am sure that $50,000 sounds like a lot of money to people today, but with the inflation rate going up every year teachers who are not making $50,000 today will be making more than that with cost of living increases and they will not get their Old Age Security cheques. Nurses will not get Old Age Security cheques. Tradesmen will not get Old Age Security cheques. People working on trains, planes and ships will not get Old Age Security cheques. That is precisely what this Government is saying today.
The Government wants to shatter the whole concept of universality where everyone is treated fairly, equitably and justly. Now there will be a means test. If a person makes a certain income he or she will not get what other Canadian citizens will receive.
This is called harmonizing with the United States. It is that part of the Free Trade Agreement aimed at harmonizing the social programs of Canada, not with a progressive country in western Europe but with the United States of America. The U.S. does not have universality in its pension system, nor universality in terms of its health care or hospital care. Yet, the Government has begun the process of making programs like those in Alabama, Tennessee and Florida. Once Canadians realize what is happening to them, I do not think they will accept it for one minute.
There is something extremely cruel going on here, extremely underhanded and extremely sinister. Once the Government says that it is to abandon the universality attached to pensions-and that has been done-and that it is to abandon the policy of universality attached to family allowances, what is next? We can only speculate what is coming next.
Will medicare be next? Will the Government say to you, Mr. Speaker, "you make $50,000 a year; when you go to the hospital or to a clinic you had better take your credit card or cash because unless you are prepared to pay for your health care, you are not going to get any". That is what is next; the writing is on the wall.
What about education, Mr. Speaker? When you send your children to Grade 5 and you are making $50,000 a year, why don't you pay extra for their education? You can afford that. What about police protection? What about ambulance service? You can pay for that. Where does it end, Mr. Speaker? Once you break this sacred trust, once you break this commitment to universality,
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anything is up for grabs. Does it end with hospital care? Does it end with education?
What this Government has decided to do is move our country toward social services based on charity, that those most in need must make their case and prove to the Government of Canada that they are in need. This is language it uses as a result of advice from its corporate friends.
Its corporate friends have said that we cannot afford these social programs and that we should target them programs to those in need. If you can prove, Mr. Speaker, that you are needy, if you can prove that you are poor enough to need an Old Age Security cheque, then you will get it. That is where we are going; that is the end result of the process we have just begun with this particular Budget.
My dad is angry. He fought with others to ensure that a universal Old Age Security system was introduced in our country. He just filled out his income tax return; he is 85 years old, he has a modest saving, and he had to pay taxes this year. He asked: "Son, does Alcan Aluminium have to pay taxes with $320 million in profits?" I said: "Dad, I don't think they pay taxes. I don't have the exact figures because they are very hard to get. You must really dig to find out what companies pay any taxes".
However, here are some who do not pay any taxes at all. Alcan Aluminium is at the top of the heap. Then of course there is Royal Trust Co., Brascan, Trilon Financial, Power Financial, Hees International, Xerox Canada, Cadillac Fairview, Placer Development, Gulf Canada Resources, Confederation Life Insurance, Saskatchewan Mining Development, Total Petroleum, Bramalea, and Hudson's Bay. I could read a list of 89,000 profitable corporations that do not pay a single penny.
What kind of cruel Government would say to Alcan Aluminum that it can make $300 million in profits and not have to pay a single penny in tax? However, presumably my dad is going to have to pay taxes and now he is going to find that his old age pension checks will be clawed back by the Government. That is the type of country that the Conservative Government has created. It is wrong, but why would we be surprised?
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Those of us who are interested in history have read what has gone on in the past. Today the Conservatives are only doing what they have always done. Back in 1984, the very first thing the Government did was to try to reduce pensions. For some reason, the Government does not like pensions. It tried to deindex pensions so that senior citizens would receive less than they deserved.
I would like to share the following story with you, Mr. Speaker, because it tells us why the Conservative Government is doing this dastardly deed against senior citizens today. In 1925 we had a Liberal minority Government. The forerunners of the New Democrats at the time stood up and said that we need to have a pension in this country; if a person struggles, works, and contributes their whole life and retires at age 65, on behalf of the people of Canada they should receive a pension to ensure that their later lives are continued in dignity. The Conservatives in the House of Commons thought that this was terrible. They said that they could never consider an idea of a pension to a senior citizen. The Liberals were not sure what to do, but they introduced the Bill.
It was a minority Government in 1926 and the Liberals introduced the Bill and supported it, as did the forerunners of the New Democrats. But it was opposed to the last Conservative in the House. Every single Conservative stated they were against pensions. They were asked why they were against pensions. They stated that if we give pensioners any money, their children will escape their obligation to care for their people. They also stated that there are older criminals out there and if a general pension cheque is sent out it would mean that some criminals would actually get a pension cheque. They also stated it would encourage senior citizens not to save for their retirement years. Every single Conservative was against the concept of a pension.
Interestingly enough, it went to the Senate. It passed through the House of Commons because of the New Democrats of the day and the Liberal Government of the day. Then it went to the Senate where the Conservatives had the majority and it was stopped dead in its tracks. They stated that they would not pass the legislation.

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An election was called and the Tories were trounced completely, and an old age pension Bill was introduced. The Tory Senators still opposed the idea but they felt they had an obligation to let it through.
From the very beginning, Conservative Members of Parliament and Conservative Senators opposed the idea of a pension on principle. We ought not to be surprised today when we hear the Government stating that it is going to begin clawing back pensions. This year it is going to claw back 128,000, and more and more as the years go on.
Canadians will not forget this long list of problems. Underlying the principle of universality is the explicit social contract that public programs and public services will be available to all and that each of us will pay according to our ability to pay. Everyone will receive an old age security cheque, and those who are wealthy will pay more tax; those who are poor will pay no tax. That is not what we have in this country. We have a very goofy system. In our country, not everyone pays tax. Many millionaires do not pay tax at all. It is interesting to look at what upper income people have experienced over the last years of Tory Government.
In 1980, under a liberal Government, the tax rate for the highest income earners was 43 per cent. In other words, a wealthy person would pay 43 per cent income tax. The Liberals dropped that down to 34 per cent. They said the rich were paying too much. In 1987, the Conservatives dropped it to a 29 per cent tax rate. It does not matter whether a person makes $200,000 or $200 million, he or she pays 29 per cent. It is absolutely fascinating that under the Conservative Government the top 1 per cent of wage earners, the very rich, have seen their taxes go down during the Tory Government administration, and the very poor and average Canadians have seen their taxes increase by hundreds of dollars.
In closing, with this Government we have had a long history of lies, broken promises, an extended pattern of half-truths. The pensioners of Canada will not forget what the Government has done to them. The families of Canada will not forget what the Government has done to them. One of Canada's most positive aspects of citizenship has now been abandoned, and that is the principle that regardless of who you are and what income you have, you are entitled to an old age security cheque.


Mr. Deputy Speaker:: On questions or comments, the Hon Member for York South-Weston.


Mr. Nunziata:: I would like to ask the Hon. Member who has just spoken to give me his thoughts with respect to the over-all picture, if we put this particular Budget into perspective, given the actions of the Conservative Government since 1984.1 wish to ask the Hon. Member to speculate on what Canada might be like in 20 or 30 years time when he and I will be senior citizens and have children and grandchildren.
For example, can the Hon. Member comment on the fact that a few years ago the Government did away with the Foreign Investment Review Agency? In the last Parliament we entered into a Free Trade Agreement with the United States that would literally tear down all economic barriers between Canada and the United States.
As the Hon. Member has put it, with this particular Budget the Government has started to claw back pensions and family allowances so that they are no longer sacred trusts. The Unemployment Insurance Program in Canada has been privatized. Part of Air Canada was privatized in the last Parliament, and we understand the Government intends to fully privatize it. Passenger rail service in Canada may very well become a thing of past.
I ask the Hon. Member to put all these decisions into perspective. Canada is the pride of the world because of these very things. We have a health-care system that is second to none in the world, and an education system that is second to none. What impact will Government policies have on this Canada that is loved throughout the world in terms of our quality of life and in terms of the collective compassion of all Canadians?
It seems to me that given the actions and the agenda of this particular Government, that agenda being one of dismantling Canada as we know it piece by piece, can he speculate on what Canada may be like in 20 or 30 years time?


Nelson Andrew Riis: : I appreciate the question of my hon. friend. I must say when one projects into the future, particularly the next four years, one becomes very concerned indeed. We do not know what we can trust with the Government.
I respect the Minister who is in his place at the moment and who spoke earlier. He might say today that the Government does not plan to reduce the ceiling on pension clawbacks below $50,000, or he might say that they do not plan to continue dismantling all the social programs, and he may be correct. However, we have heard so many lies. We have had promises broken so many times that it does not matter what the Prime

Minister says any more. The people of Canada cannot believe him.
During the election campaign, many of us said our concern about the free trade deal with the United States was that there would be a dismantling of programs and that there would be a downward pressure on the high standards that we have accomplished in this country to approximate those found in Tennessee, Texas, or South Carolina. The Prime Minister stated that regional development programs, pensions, or family allowance would not be touched. He went on to talk about all the things he would not do. However, when we look at the Budget we see that he has done them all. The Prime Minister has done everything he said he would not do. He has broken promise after promise. We will take no comfort from anything the Prime Minister says. Obviously he does not mean what he says or does not know or understand what he is saying.
My hon. friend asks what the future will be like. We have struggled for decades to build a rather unique home for Canadians. We have had a very high standard of living. We have had peace of mind because of some very well developed, thoughtful and sophisticated social programs. For instance, someone retiring at age 65 would get a pension. A person raising a family would get a family allowance cheque. A person who is sick or injured would go to the hospital and be cared for.
As a result of the present Government, we are seeing that elements of those systems are no longer in place. Some 128,000 senior citizens will have to give back their Old Age Security cheques. Over half a million families raising children will have their family allowance cheques clawed back by the Conservative Government. Where will it end?
Actually in the good old days we used to make decisions about the future of our country. In cities like Vancouver, Kamloops, Toronto, Montreal and Regina, we actually made decisions about our country because we had some control over the companies in our economy. As a result of the sell-out in the Free Trade Agreement decisions about our children's future will not be made here in Canada but in Omaha, Los Angles, New York, Dallas and Houston.
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I doubt if the Texans in Houston have our children's concerns at heart when they make investment decisions about whether to close a plant, start a new marketing line, or do research and development.
We have built and developed a system through decades of hard struggle to make this a country one of which we are proud to be citizens. We are seeing it being dismantled by the Conservative Government. These programs are being eroded and dismantled day after day so that the Prime Minister can fulfil his dream that one day we will be part of the United States and our programs will be like those in the United States where they do not have universal health care or a universal pension system. This is what the Prime Minister must want, because that is what he is trying to accomplish.


John V. Nunziata: Mr. Speaker, with every crime there has to be a motive. There has to be a mens rea, as they say in criminal law. There must be a reason why one wants to commit a particular crime.
I suggest to the Hon. Member that what the Government is doing with respect to the future of Canada is a crime, given what has taken many years to develop. Could the Hon. Member explain what the Government is doing? I cannot for the life of me understand what that motive may be.
The Government talks about the deficit. Deficit financing has been with us for some time. We also know for a fact that when the Government came to power the debt was approximately $170 billion. In five short years that debt has almost doubled. We have a situation where the Conservative Government, led by the Prime Minister, is the author of half the national debt.
Given that the annual deficit is its major preoccupation, will he comment on the fairness of what the Government has done in terms of asking Canadians to shoulder the burden while certain Canadians have been forced to shoulder more?
With the size of any federal constituency in Prince Edward Island, for example, the impact is absolutely devastating. Will he comment on the fairness, equity and economic justice, given the motive of the Government?


Nelson Andrew Riis: Mr. Speaker, I appreciate my hon. friend's question. In my mind the motive is clear. The Government committed itself to President Reagan to dismantle the country.
The Conservative Party introduced CBC and now it is trying to get rid of CBC. It introduced Air Canada and now it wants to get rid of Air Canada. It introduced VIA and now it wants to get rid of VIA Rail.

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There is a long list of what it means to be Canadian. Slowly but surely the Government is ridding us of all the vestiges of what being Canadian is all about.
As my hon. friend says, the Conservatives have virtually doubled the debt of the country in five short years. The Minister of Finance says that the reason for all these cruel, heavy-handed, unjust provisions in the Budget is to reduce the deficit. He tells us in the next breath that the deficit will actually go up this year and next year. One must ask what is the motive. Why is the Government causing such far-reaching devastation to the country?
It is simple. This is stage two of the free trade deal with the United States. Our Prime Minister promised President Reagan that he would try to make Canada like the United States. He promised that he would try to drive down and depress our quality of life to approximate that quality of life in the southern states. That is what he promised. Unfortunately for Canadians who were misled, that is what he is doing.


Jean-Claude Malépart: Mr. Speaker, the motion moved today by the Liberal Party condemns the Conservative Government for doing a hatchet job on social programs and for attacking and in fact putting an end to the universality of these programs. We must remember that we have three major social programs in this country that are cherished by all Canadians and are universal: old age security pensions, family allowances and medicare, which is universal and free.
Mr. Speaker, we must recall that these programs are not welfare. They were not given to us as a kind of charity. There was no means test to be eligible for old age security, family allowances or health care across this country.
Canada's seniors are right when they say that universality is on the way out as result of the surtax on old age security and family allowances. An editorial in Le Devoir said that this spelled the end of universal social programs. Some people will say that the Government's hypocritical approach does not deprive social programs,
old age security or family allowances of their universality. I believe this is the beginning of the end of universality, because before these proposals were made, all Canadians aged 65 and over would receive their old age security pension cheques, and at the end of the fiscal year, when they did their tax returns, they would add up their old age security cheques, their RRSP income, their investment income and rental income. There is no justification for a surtax on old age security, because these benefits are already more highly taxed than income from an RRSP which itself is tax free.
What the Tories are proposing this year is an all out attack on old age security cheques, and the Minister of Labour (Mr. Corbeil) says: those earning $50,000 or more. I am defending people with that kind of income, because tomorrow, they will go after the $10,000 group.


Some Hon. Members:: Oh, oh!


Jean-Claude Malépart: Mr. Speaker, who are these people with an income of $50,000 or more? They are the fathers and mothers of most of the Members in this House. They are Canadians who are now 65 and who raised their children in some very difficult circumstances. These are the families, the elderly, who had to pay at the time because there was no medicare hospital insurance. What the Minister of Labour does not know is that from 1952 to 1972, these senior citizens paid a special tax to be eligible for universal social programs.
I know the Minister of Labour is not aware of that-he does'nt know.
As we saw today, those people accepted to pay a special tax in order to qualify for a program that is now taken away from them. How can people trust this Government after such actions?
Mr. Speaker, senior citizens today-but this is the second time this Tory Government is attacking Old Age Security Pensions. They started with deindexation, but thank God and the Liberal Party and senior citizens, after seven weeks of fighting during which all Conservative Members expressed their support for deindexation after what Mrs. Denis told the Prime Minister on Parliament Hill-Charlie Brown!-he had to apologize

on TV and his Minister of Finance had to make amends and say it was all a mistake.
Well, once more you're making a mistake, you Tbries, and once more you misled the people. The 65-year olds. Universality was established because every person who worked all his or her life and paid taxes, who painstakingly put money aside, who even paid a special tax during 20 years to be entitled to universality, those people should not be deprived of it.
Moreover, this Tory Government starts at the level of $50,000 a year or more, even though this does not even reduce its deficit. Next year, it will lower that to the $30,000 income level, and the year after that to $20,000. And it makes no difference which Government is in power. Just as income tax was meant to be a temporary measure but has become a permanent fixture, the Minister's surtax was temporary. It is now permanent and has been increased, Mr. Speaker.
And now they attack people with $50,000 yearly income-and I am not speaking of my constituents. If today's poor families, today's poor senior citizens do not join forces with everyone else to make the Government relent on its attack against social program universality, the next victims will be those with a $30,000 yearly income, and after that those with $20,000.
We have seen that before with respect to other programs, Mr. Speaker. When the universal Old Age Security program was implemented it was only fair to the men and women who had worked for hours on end during their active lifetime, they had paid their taxes and they rightfully expected to be entitled to OAS benefits at the end of their career. The guaranteed income supplement was just another way to make life easier for less fortunate elderly Canadians. The whole program was designed to help as many people as possible.
But again the Government is misleading senior citizens. Not only the Prime Minister, him and his mother. No a single Conservative Member here would dare stand up and say he or she did warn older people that some of them would have to pay back their OAS benefits. Not one of them told the people.
Here they are again telling us they take from the rich to give to the poor, but that is not true, Mr. Speaker. Had the Government said it would raise the guaranteed income supplement paid to people living under the poverty line by taking back $300 million from others
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earning more than $50,000 a year, I would have said that the Prime Minister (Mr. Mulroney) was not pulling the wool over the eyes of Canadians.
But it just is not so. The Government grabs that money so the banks will not have to pay their fair share to reduce the debt and lower the deficit.
Mr. Speaker, that is the kind of approach and policy which make people lose confidence in their Government and their politicians regardless of their political persuasion.
Let us consider family allowances and family policies. One of the problems facing Canada and Quebec is the declining birth rate. We all know how much it costs to raise a family these days.
When the family allowances program was launched it was designed to help families with children, as opposed to childless couples. Now it seems the Conservatives want children to come only from poor families, they do not seek to help middle-income families.
I would suggest this is why Quebec Liberal Government Family Minister Therese Lavoie-Roux said that the Budget of the Minister of Finance is an anti-family Budget. We remember that it maintained de-indexation of family allowances and lowered the child tax credit eligibility threshold. It has also recently imposed a special tax on family allowances and cancelled plans to increase child care spaces, which was the most important thing in that area.
Mr. Speaker, I agree with Mrs. Therese Lavoie-Roux that it is an anti-family Budget. And now that the declining birthrate is a problem it is not a good time to take money away from families with children. It should be the opposite: we should encourage young couples to have children by helping them with the extra costs involved.
Mr. Speaker, health and hospitalization insurance is another program that is free and universal. Health Ministers throughout the country, be they Liberals or Conservatives, are not fools. Before the Budget was tabled, they all sent the Minister of Finance an SOS saying that his 1986 Bill C-96 resulted in a $5,776 billion cut in the health and hospitalization insurance funding program. Hospitals have had to close beds and deny treatment to patients in order to make ends meet. You have people suffering, people who need a heart bypass operation but who must wait a year; some even die

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before being admitted to hospital because there's not enough money.
In its Bill C-96, the Government cut $133 million in Newfoundland, $29 million in Prince Edward Island, $201 in Nova Scotia, $162 million in New Brunswick, $1,479 million in Quebec, $2,081 million in Ontario, $242 million in Manitoba, $236 million in Saskatchewan, $549 million in Alberta and $663 million in British Columbia. Not only did that heartless Minister of Finance-we will never be able to find him a heart for a bypass operation-not only did that inhumane Minister ignore the problems in the health and hospitalization sector, but he also tried in his Budget to reduce by one per cent the federal contribution to the health system.
The 1989-90 Estimates of the President of the Treasury Board call for a $160 million cut in funding for hospitals and health services in comparison with 1988-89.
Provincial Health and Finance Ministers, be they Conservative or Liberal, as well as Senator Paul David, a Conservative Senator who is also an eminent heart surgeon and the founder of the Montreal Institute of Cardiology and who knows what he is talking about since he is no Bay Street broker, said, after an investigation into the matter, that if emergency rooms are overcrowded, if there are long waiting lists throughout the country, if people must wait for treatment due to a lack of space, if hospital equipment is obsolete, if people in some parts of the country are at a disadvantage because local hospitals do not have the equipement required to save lives or to treat people and alleviate their suffering as much as possible, it is because there is not enough money.
Senator David is not a political schemer. He is a recognized specialist in his field.
And here again, the Minister of Finance (Mr. Wilson) and the Prime Minister (Mr. Mulroney) are insensitive to all these aspects. It is the same as in 1985 when this Government decided to tax all drugs, even those used by diabetics who have to give themselves an injection with a syringe every day to survive. For the Conservative Government, for the same Finance Minister, it was no big deal taxing them. Taxing drugs that cardiac patients and people with respiratory disorders need to survive was
not serious. For the Conservative Members, that was not an issue. After three weeks of struggle with my colleague from Hamilton, the Finance Minister had to admit that he was wrong. What he had done was inhuman. He had to go back, withdraw his tax on all drugs for people with diabetes, cardio-vascular diseases and respiratory disorders.
Mr. Speaker, it is still time. The Minister of Finance will have to admit that the most shocking thing in his Budget is the attack on the sick. And today, I am in a position to speak about it, because before, I had not known sickness. I know what it means to go to a hospital and see people in the corridor. I know what it means to need treatment to survive, to have one foot in the grave, and to have the hospital tell you that they cannot admit you this week. You will have to wait till next week. They had to close 88 beds.
I do not know how that affects you, but the Minister of Transport (Mr. Bouchard) had the same experience I did. He too knows what it is about. There are people who could be cured without the slightest suffering because of new discoveries, but for lack of money, because the Conservative Government prefers to spare our banking system, would rather not tax the banks, would rather not raise the share of tax that business has to pay-it prefers to sacrifice people's health.
And when I see the Minister of National Health and Welfare (Mr. Beatty) tell us that the people will continue to defend social programs if they do not get them- I can tell the Minister of National Health and Welfare that he is not often out in the field, he does not go to disadvantaged communities. You just have to look at Quebec, at the cuts the Government made to welfare payments.
You did not hear the former mayor of Anjou come to the defence of people on social welfare. Of course not, they do not worry because they have no such people, they live in a small world of their own. As a result of bad prejudices concerning these people, the unemployed people on welfare, it is true that in our system there are bad citizens like the rich who cheat on their taxes, but they are no worse than the others.
The minute people realize they will be working all their lives and paying taxes, yet not be entitled to OAS benefits, it stands to reason they will not defend the system because they will feel they have been treated unfairly.
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We had more of the same when the present Minister of Transport held the Employment and Immigration portfolio. He decided that people who lost their jobs no longer qualified for unemployment insurance benefits, yet these people were getting what was coming to them, as employees they had paid their share of pension contributions as had their employer, but again the Conservative Members kept saying not to worry. After arguing with them for 17 months the Government finally admitted they were right and had to pay unemployment benefits back to 47,000 claimants who were entitled to that money.
Today still the Government practices discrimination. People are told: If you pay your premiums then lose your job and seek other employment you are entitled to unemployment insurance regardless of your income.
Right now a rich man who gets $350 from his RRSP or from a tenant is entitled to full unemployment insurance benefits, but not so the ordinary worker who withdraws $200 from the pension plan to which both he and his employer contribute. Who would have thought a Government would come into office and do something like that! At one time or another some people may have said it was nothing to worry about. We see the same thing coming today. They begin at the $50,000 bracket, nothing to be concerned about, they are going after people earning in excess of $50,000, Mr. Speaker, but it is just a question of time before the ceiling drops down to $40,000.
Already the table is not indexed. Automatically, by income levels, this will come down, and the next target will be $30 000. And then, quite simply, the kind of Minister of Finance we have today will say: Look now, we already established the means test for the guaranteed income supplement or the child tax credit. So we might just as well extend that means test to everything else and so eliminate those whose income tops $15 000 or $20 000. Certainly someone will say: You mail a cheque, and the money spent on mailing old pension cheques we might as well save that rather than claiming it back at the end of the year!
In conclusion, Mr. Speaker, I urge some Conservative Members to do as they did on other struggles I led. The Hon. Member for Abitibi was not afraid to rise in support of senior citizens and face his Government. I hope that some will rise, speak to the Minister of Finance and tell him not to touch the health care system. Everyone here has constituents who suffer, who are ill or
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who will be. We must defend those people who cannot come here on Parliament Hill to speak for themselves. This is what we are elected for.
Mr. Speaker, rather than have this charade of social program dismantling, the Government should have said: "We honestly want to improve social programs" and look after to the people who are most in need, and established a guaranteed yearly income program. But not this charade of attacking and destroying piece by piece the vital universal social programs. The people paid for them, not the Prime Minister.


Vincent Della Noce: On a point of order, Mr. Speaker.


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


Vincent Della Noce: Thank you, Mr. Speaker. I was anxious to hear the Hon. Member for Laurier-Sainte-Marie (Mr. Malepart) whom I respect greatly conclude his remarks since I did not want to interrupt him on a point of order. But I was a little surprised to hear him try and defend people with $50,000 plus income-


Mr. Deputy Speaker:: This is not a point of order. Questions and comments. The Hon. Member for Lotbi-niere (Mr. Tremblay).


Mr. TVemblay (Lotbiniere):: Thank you, Mr. Speaker. I must admit that the Hon. Member for Laurier-Sainte-Marie (Mr. Malepart) speaks with more authority about senior citizens than about the Space Agency. And of course there is the emotional side with his references to the sick and to his own health, and we are of course aware of that situation. My comment was, and I made it when the microphone was still closed, that at last he was waking up. And in fact, Mr. Speaker, I would like to hear his comments because he was himself a Government Member from 1975 to 1984.
Does he realize what kind of legacy his Party left us in 1984? Mr. Speaker, perhaps I may give a short summary. During the previous 110 years, in other words, since Confederation, successive Governments had accumulated a total debt that was less than $20 billion by 1967, when we celebrated our centennial. About 3 cents of every dollar paid in taxes went to service the debt. In 10 years, Mr. Speaker, from 1975 to 1984, when the Hon. Member for Laurier-Sainte-Marie sat in this House, the debt soared to about $200 billion. Did the Hon. Member for Laurier-Sainte-Marie rise in the House at that time, Mr. Speaker? Did he rise in the House when the Energy Ministers of the time closed as many as three

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plants in East Montreal, three refineries? We didn't hear him then.


Vincent Della Noce: Ten in Canada.


Maurice Tremblay: Ten in Canada. Did he rise then, Mr. Speaker? Does he remember the kind of legacy they left us in 1984? About $200 billion. They left us a legacy to manage the deficit, to manage negative growth. That is what we were left by the Liberal Government. Did the Hon. Member rise then? When we introduced Bill C-26 in 1986, which provided benefits for widows and widowers, did he rise in the House to ask the Conservative Government why we didn't extend those benefits to everyone? I think he should remember that during the last 21 years his Government was in power, they never passed this kind of legislation for anyone. Did the Hon. Member for Laurier-Sainte-Marie rise then? Mr. Speaker, I would like to hear what the Hon. Member has to say and I had to wait until today, when the Hon. Member decided to wake up. However, there was a time when he should have spoken, and he did not.


Jean-Claude Malépart: Mr. Speaker, the Hon. Member doesn't seem to have learned a thing, although this is his second term. I didn't ask him to rise in the House, I asked him to rise in caucus. I can inform the Hon. Member that in caucus, my Party proposed cuts in family allowances. However, we won in caucus. They were not cut. My Party's legacy was universal health insurance for everyone and universal pensions for everyone. The social programs we have today were introduced by the Liberal Party, not by the Tories.


Some Hon. Members:: Hear, hear.


Jean-Claude Malépart: It was Trudeau and Pearson. Members did not have to fight their causes here, they did so in Caucus where we were able to win our battles. We didn't need the Opposition to fight our battles. It is pretty obvious the Hon. Member has learned nothing in his second term. He was lucky to be elected on the basis of a pack of lies, like all the others.
He referred just now to Bill C-26 which continues to discriminate against all elderly Canadians between the ages of 60 and 64 who are single or separated and who live in his riding. He did not defend them. And he could
at least have asked his Minister to give to the poor the money he is taking away from the rich. These people are poor, and he could not defend them!


M. DeBIois:: Mr. Speaker, I always listen with interest to the Hon. Member form Laurier-Sainte-Marie (Mr. Malepart) because he is a good speaker and sometimes even eloquent. But I would like to remind him of the very interesting opinion expressed by the National Council on Welfare in its comments on the Budget. The problem is that we are saddled with a huge debt which must be spread as equitably as possible by any responsible government. In the Budget, the Government is asking people who can afford it most to make an effort. And I must admit that I am surprised and a bit disappointed to hear the Hon. Member from Laurier- Sainte-Marie, for whom I have a lot of respect, stand up for the rich.
We are trying to make a transfer, and here is what the National Council on Welfare had to say: "The advantage of the claw-back is that it saves money not by tampering with the principle of universality, but rather by increasing the progressivity of social programs. Most defenders of universality believe that benefits should be distributed in a progressive fashion: as the income rises, the benefits diminish, and vice versa. The claw-back does no damage to universality. Old age pension and family allowance cheques would still go out to all the pensioners and parents, regardless of their incomes, but it does reduce the net value of benefit to upper-income recipients". That is what we have done. We are merely asking people whose net income-we are talking about net income not gross income-is over $50,000 a year to make a little extra effort to reduce the debt which, if nothing is done now, will reach in a few years such proportions that the social programs we enjoy now will have to be discontinued. I wonder what he Hon. Member from Laurier- Sainte-Marie has to say about that.


Jean-Claude Malépart: Mr. Speaker, I appreciate the question. I have never denied the existence of a debt or deficit problem. Yet, I suggest this Tory Government is wrong to ask sick people to share this burden. When a man gets sick, he has no time to ponder whether he can afford to be sick. He urgently seeks treatment. The Goverment should never use sick people as hostages.

Concerning the affluent people earning $50,000 and more, it is true that they do not need me to defend them, but having dealt for 25 years with social issues, I know that governments always start with the rich and finish with the poor. Remember the time when the PQ Government decided to reduce to $130 the social assistance paid to young Quebecers because it felt that these people were lazy and that eventually they would get a job. What happened? These young people began shooting drugs and got involved in prostitution to survive. That is only the start! If you told me that there are no other areas where the Government could get money, that all affluent people pay their fair share of income tax, that all corporations pay their dues, I would reply: We must change the social programs. If we want to save on social programs, let us establish a guaranteed annual income.
We have twelve social programs, especially the way you operate, to provide assistance to people. Which means that if we were to put together in the same group the mothers with children, the aged and the unemployed, we could considerably reduce the overhead and give more to the really poor people. But what you are proposing is not a solution to improve our social programs but strictly a means to reduce your deficit by taking away money from those people you should leave alone. Senior Canadians are not responsible for creating this deficit! You would like to go to these people who are 65 years of age and who have lived sparingly all their lives to be able to save a little money and today- Our generation seems to be saying: Our parents are used to paying through the nose. Let them continue to pay, because we are not going to. Personally, I object. My parents have made enough sacrifices. Its our turn to make sacrifices and to attack the affluent, the banks, the really rich, in order to get rid of this debt forever.
Mr. Deputy Speaker Order, please! There are only two minutes left. The Hon. Member for Duvemay (Mr. Della Noce) may use up one, than the other Member for Laurier-Sainte-Marie (Mr. Malepart) the other.


M. Della Noce:: Mr. Speaker, I definitaly want the record to show, what the Hon. Member for Laurier- Sainte-Marie (Mr. Malepart) said earlier. He claimed to be standing up for the people earning over $50,000 because he is afraid of what will happen some day to
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those who earn $10,000. I do hope his predictions are incorrect and that time will prove him wrong.
But I was most stunned by what he said after that. He maintained that only the fathers and mothers of Hon. Members of this House earn $50,000. Now I want to tell my colleague what my mother was left with after working her whole life. She is now in a hospital, in a home where she has to pay $860 per month even though she only gets $545 per month in guaranteed income supplement. With the provincial supplement, that amounts to $8,000 a year. So, you see, my mother does not belong to the group the Hon. Member of Laurier-Sainte-Marie was referring to. Let us talk about what she got from the social services your party gave us- It is too bad that you did not see things that way before, that the Hon. Member for Laurier-Sainte-Marie did not feel that way before, because what you left us is not much to live on, my mother only gets $8,160 a year. It's a good thing she has a son to pay the difference since it costs $860 per month! There might be others in a similar situation, I don't know.


Jean-Claude Malépart: Mr. Speaker, Mr. Muffler here may not know that the Conservatives were against all the measures we proposed in order for his mother to get $8,000. But already, the Hon. Member thinks the benefits are not high enough and he is ready, probably because the rent at his mother's home is going up- The reason being that your government has cut health care services by another $200 million. If your mother is getting poorer, you only have yourself to blame for it!


Mr. Pierre H. Vincent (Parliamentary Secretary to Minister of Finance):: I listened with interest to the speech of the Hon. Member for Laurier-Sainte-Marie (Mr. Malepart), as I did to questions and his answers.
What surprised me most in the thirty minutes he spoke were the words: Your deficit! That is what he said, as we will read in Hansard on Monday: Your deficit! While we know very well, Mr. Speaker, that it is not our deficit, that it is the country's deficit that started with his Liberal Government which was in office for twenty years!
Mr. Speaker, let me answer the various points he raised. For one thing, Mr. Speaker, regarding medicare, we know the federal Government transfers money to the provinces mainly in two ways. First through what we call

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the established programs financing and second through equalization payments to some provinces.
Mr. Speaker, it has been pointed out that the Budget we introduced is cutting by 1 per cent the increase in established programs financing to the provinces. That means the federal Government will make bigger payments to the provinces over the next five years, regardless of that $25 million reduction over that period. And the Budget does not change anything to the equalization payments that are made to some provinces, including Quebec.
More important still, Mr. Speaker, the Canadian Government is transfering money to provinces but has absolutely no say in the way it is spent. Provinces can say and do whatever they want with the money we give them to build roads, schools, hospitals or whatever. We have no control whatsoever.
This is why the attack by the Hon. Member for Laurier-Sainte-Marie is absolutely ludicrous in that respect.
He referred to family allowance, old age security pensions, he said we set this at $50,000 this year but we would reduce it in the future down to $10,000.1 suggest that before criticizing the Budget, a review of the comments it raised is in order. The first interesting comment came from the Finance critic of the Liberal Party of Canada, who said on March 21, 1989 that we should tax family allowance and old age security pensions, and they should be taxed back from the people with a certain income level. Yes, you heard correctly, this came from the Finance critic of the Liberal Party of Canada. He said so before the Budget: Tax old age security pensions and family allowance back from those who do not need them!
He also suggested, and we are in total agreement with him, the annual deficit had to be tackled. The annual deficit is a rather vague concept. What does that mean, an annual deficit, Mr. Speaker? The Canadian Government's annual deficit, is the amount it spends over and above the revenue. This means that for 25 years, every year, the Canadian Government has been spending, and I repeat every year, year after year, the Canadian Government has been spending more money than it took in. Over four years, we succeeded in reducing our deficit because when we came to power in 1984, we were left with a $39 billion deficit. This means that in 1984, under a Liberal Government, we as a nation spent $39 billion more than Government revenues. Over four years we reduced that to $28 billion. The accumulation of yearly
overspending is responsible for our having today a national debt in the order of $320 billion.
Mr. Speaker, $320 billion is something much too large for many people to comprehend. Those $320 billion mean $3 million an hour. The national debt is growing at the rate of $3 million an hour, or $80 million a day. This is the problem we have in this country. And this is the legacy left us by that Party, the Liberal Party of Canada. This is what we inherited from them, Mr. Speaker, and we must deal with it.
Listening to the comments coming from the Opposition, all they say on any matter is: money, money, money, give more money away, spend more! What do we spend on in this Government, how is this Government being managed since 1984?
Of each dollar that came into our coffers here in Ottawa, 16 cents only are used for managing the country, paying for public service salaries, federal buildings, etc. Only 16 cents. On the other hand, 35 cents go to interest payments. Not to the debt, but to the interests on the debt.


Thomas (Tom) William Wappel: That is now, that was not in 1984. It has gone up. Paint a correct picture.


Pierre H. Vincent: The members opposite say it was 32 cents in 1984. There's nothing to boast about that. It's horrible. At 32 cents, I would be ashamed. I can understand why you went into hiding. There's nothing to boast about that.
Mr. Speaker, a lot of money, about 25 cents of each dollar, goes to the provinces. A lot of money is allotted to old age pensions, to family allowances, to unemployment insurance.
Members opposite are saying there should be cuts. We spend 16 cents out of every dollar on administering the country, and the reason there are no additional funds is that we use 35 cents out of every dollar go towards paying the interest on the monstrous debt which the party opposite started to accumulate. The opposition doesn't understand that, but Canadians listening to us do. They understand that if you earn $20,000 a year and spend $25,000, after twenty years, you will be $100,000 in the red. Canadian families have no trouble understanding that. They also understand that if you have a net income of $50,000 a year, you will still be well off even if you don't get the full amount of your old age pension or your family allowances. The claw-back will affect 4 percent of the 3,000,000 Canadians who receive an old age pension benefits. And only 2 percent will get nothing
May 5, 1989

or will have to forfeit the full amount of their pension. What income level are we talking about? To get nothing or to have to forfeit the full amount of your annual old age pension, you must make $77,000 net from other sources, $77,000 net, Mr. Speaker. The opposition says that people will lose their cheques. That is simply not true.
Citizens entitled to old age security pensions did receive their cheques last month, and will get them again this month, and next month, and even next year, but if their net income is over $77,000, they will have to pay back the amount of benefits they received when paying their taxes. But that only applies to 2 per cent of seniors in Canada.
You know, Mr. Speaker, for the last four years, every time a new budget was tabled, I have had the opportunity, as Parliamentary Secretary to the Minister of Finance, to visit each and every region in Quebec to explain the budget to the people. Everywhere I went, wether I met with the Richelieu club, the Rotary club, the Chamber of Commerce, the AFEAS, or seniors, I have always been asked the same question: Do you think it is right that Canada's former Prime Minister, who receives something like $100,000 in pension because he was Prime Minister, and I respect that, it's none of my business, but who earns enough-


An Hon. Member:: He's entitled to it!


M. Vincent:: -to live, do you think it is right that he should also receive old age security and family allowances benefits- He gets both of them. He is over 65 years of age, and has children under 18. Do you know what most people answered? No, it is not right! No, a person who is well-off, who earns over $77,000 a year in net income, should not be entitled to old age security and family allowances benefits.
Mr. Speaker, we should realize that the expressions "Old Age Security Pensions" and "Family Allowances" really mean that they are for the needy. I suggest that if I get a net income of $77,000 a year, I can do without an additional payment of $500 or $600 a month. This is something Canadian men and women understand. This is something Quebec men and women understand. Yet, the Opposition just cannot understand it, which is unfortunate, Mr. Speaker. It is unfortunate because a
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while ago, they tried to frighten people- The Hon. Member for Laurier-Sainte-Marie (Mr. Malepart) was scaring everybody by saying: That is only a start he said, and it will get even worse in the future! Quite the contrary, Mr. Speaker!
I mentioned before that the Canadian Government will have to come up with $39 billion just in interests. We must find a way to stop this drain.
As the Liberal Party of Canada financial critic was saying, we must cut the deficit to prevent the national debt from increasing further; this way, we would have the necessary resources to set up new programs for Canadians. But if we fail to seize the bull by the horns this year and the years after, if we do not take major steps to reduce the annual deficit-the plan is to reduce it to $15 billion by 1993-1994-to reduce our debt, what the Hon. Member for Laurier-Sainte-Marie (Mr. Malepart) was saying is likely to happen. It is true that the Government would have no money for anybody or anything. There would be no more social programs. The Government would be satisfied with collecting the Canadian taxpayers' money and issuing cheques to pay the interests on the debts incurred by this Government. That's what would happen, Mr. Speaker. With 35 cents out of every dollar to pay interests, there is not a single family or corporation which could survive such a system.
Hence the importance of this Budget and at every level. Mr. Speaker, you must have noted in the Budget I am sure that there is a special tax on corporations. We are going to collect from major corporations a minimum of $1 billion in revenues every year. So, they should stop telling me that the Government is not asking everybody to do their share. The larger corporations are taxed. Banking institutions and financial services are taxed too, so that everybody is doing its share. The provinces will have to face a slower increase in their payments from the Federal Government; individuals will have an additional tax to pay. Corporations have one too. Everybody has to do his share, because this is the major problem of our country. When the situation is such that the International Monetary Fund tells us our debt and our deficit could lead to major trouble, I think, Mr. Speaker, we have hit the red light. Way back when we got the green light,

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sometime later it turned yellow but now we are looking at the red light.
True, once again, because of this Budget and those measures, a senior 65 and older whose net income is over $70,000,1 repeat over $70,000, will have to give back the excess old age pension he received. But suppose that, for some reason, the income of that same person is down to $15,000 the following year. He will have received cheques the whole time and at the end of the second year he will keep the full amount of the old age pension because his income will be under $50,000.
The Hon. Member for Laurier-Sainte-Marie said also that it was not indexed. Mr. Speaker, since 1984, there have been three or four increases in the federal sales tax credit and the child tax credit, and the old age pensions are upped every three months. You can see therefore there is no risk whatsoever that the income seniors are entitled to will be cancelled, lowered, whatever expression you prefer. There is absolutely no danger of that.
I think that for once-I have never seen it in four years-the Opposition should leave all partisanship aside and join forces against a problem that is not that of the riding of Trois-Rivieres or Duvemay, but a national problem they created. They should work in co-operation with the Progressive Conservative Government to have this Budget adopted as soon as possible so that in the future we will be able to offer Canadian men and women the social programs they want and others they also long for.
Other programs could be implemented if we did not have to spend 35 cents of every dollar in 1989-90 to pay the interest. And we have not even begun to pay back the debt! The debt now amounts to $320 billion and increases by $3 million an hour. We have not even started thinking about reimbursing that debt.
I think, Mr. Speaker, that the Opposition should make an effort. Let's put partisanship aside and take stock of the situation. The Opposition should support our efforts. There is nothing wrong with an opposition party admitting that the Government has come up with a good policy. They won't die if they concede that a policy is good. In four years, I have never heard a member of the Opposition admit that we had done something right. Not once in four years! In 1988, the Canadian people recognized that we had done something right. And I think that it should teach the Opposition a positive lesson. When bills are valid and important to the country, they should admit that the Progressive Conservative Party is right in this case. Their credibility would
automatically be reinforced. However, as things now stand, they always say no to everything. It is impossible to always say no. Say what you want, it's impossible!
Mr. Speaker, I realize that my time is almost up and I would like to conclude by pointing out that the family allowance eligibility threshold of $50,000 continues to apply and that the level at which one ceases to be eligible for family allowances varies according to the number of incomes and children. I hope these explanations will give some good ideas to members of the Opposition.


Mr. Bellemare:: Mr. Speaker, I listened with interest to part of the presentation by the Hon. Member for Trois-Rivieres (Mr. Vincent). I also heard him denigrate my colleague from Laurier-Sainte-Marie (Mr. Malepart), this good man who protects people in difficulty, who protects the poor, who protects the sick, who protects those in need! The Hon. Member for Laurier- Sainte-Marie wants to protect people who need to go to hospital, elderly people who need to be able to have a pleasant and decent life. I heard the Hon. Member for Trois-Rivieres talk about the debt and suggest to the Opposition that we should not take sides, that we should support them and applaud them for what they have done over four years-
Mr. Speaker, I have only been here since last November 21, and today you must say, as in a boxing match, you do not talk about previous fights; the one that counts is now. We are talking about the next four years, the next four years of the Conservative Party, not about past years. Because I will remind the Hon. Member for Trois-Rivieres, if he wants to talk about the last four years, that the debt in 1984 was perhaps around $120 billion. What was the debt in 1988, Hon. Member? And from whom did you inherit it?
There was a debt in 1984, but in 1988, what was it and where did you get the debt incurred between 1984 and 1988?
Now, the issue, Mr. Speaker, is that they want to pay off the debt on the backs of those who receive benefits or payments, senior citizens. The money you will save by taxing those who allegedly earn over $50,000 a year, instead of taxing those who make a lot of money, the rich-in short, why do you, the Hon. Member for Trois-Rivieres, attack one of the social programs? And your target in attacking a social program is those people who earn more than a certain amount, but you know that over the years, the cost of living rises and some day, those who are considered poor today with an income of $20,000 or $23,000 will in a few years be making $50,000.
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They may be the new poor then, when people will perhaps be earning $200,000 or $300,000 a year.
So I say to the Hon. Member for Trois-Rivieres: What will you do with the money you save on social benefits that you tax back and with the money that you take from the provinces?


Pierre H. Vincent: Mr. Speaker, I want to point out that I did not denigrate my colleague from Laurier-Sainte-Marie (Mr. Malepart). I only said I did not agree with him, and I still do not agree with him. As to saying he is a saint man, we can argue about that some other time!
Mr. Speaker, the Hon. Member opposite said we should look at today's problems, not yesterday's.
How pleased I am to hear that, Mr. Speaker, that is what I said for twenty minutes. Our problem right now is the $320 billion national debt. I have been saying that for twenty minutes.
My colleague opposite just caught on. Am I ever glad! That is the problem right now, the problem we describe as a $320 billion national debt, 35 cents of every dollar to be paid in interests.
Mr. Speaker, that is the problem. That much he understands, but the rest of it is still a mystery to him, so I will go over it again.
I earn an income other than the OAS pension, I am 66 years old, my net annual income amounts to $55,000. So I say, and the people of Quebec whom I met and Canadians generally say: Sure enough, we can tax back some of his OAS benefits and he will still be doing all right.
Mr. Speaker, I did say some of his pension benefits, because between $55,000 and $77,000 the amount I get will gradually decrease.
What happens when my net annual income exceeds $77,000 is that I get my pension cheque every month, but at the end of the year I simply pay back to the federal Government an amount equivalent to the value of those twelve cheques. A net income of more than $77,000 a year! I have always said and I repeat that we are speaking of "net income", Mr. Speaker.
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An Hon. Member:: We need that money.


Pierre H. Vincent: We need it because if we go on as the Opposition proposes, we soon will not even have enough money to help those who make only $5,000 a year. That is the thrust of the system. We have to take the money where it is and-


An Hon. Member:: From the rich.


Pierre H. Vincent: -from the rich, I hope, and not from the poor! To take the money and give it to those 65 years old who do not have an income of $50,000!
That is the purpose of the Budget and that is what has to be done today, as my Opposition friend said, because of the debt they left us, Mr. Speaker.


Stanley J. Hovdebo: Mr. Speaker, the Hon. Member has made a number of passionate statements which suggest that the whole direction of the Budget has been to reduce the deficit and the debt. We all know that this particular Budget increased the deficit a little from what it was last year. It increases the national debt by $30 billion.
We have been been told by Statistics Canada that a 1 per cent reduction in the interest rate would reduce the deficit by $1.5 billion. A 1 per cent reduction in unemployment, that is, a 1 per cent increase in the number of people who work, would bring $2.2 billion into the coffers. Yet the Budget and the policy of the Government on interest rates and on cut-backs will increase interest rates and unemployment. The Government admits that the Budget will increase the unemployment rate.
Why has the Government not taken advantage of those natural ways of reducing the deficit, and consequently the national debt, rather than leaving interest rates high and increasing the unemployment rate? In that manner, there could be more dollars paid toward the deficit and the national debt.


Pierre H. Vincent: Mr. Speaker, let me thank my colleague for his question, since we have in fact dealt with thas aspect today. That is a very important point. The Canadian people wants to know.
We have to look at what happened in 1981-82 when there was a recession. The Liberal Government of the day said: Let inflation go up and let's not touch to the interest rates for inflation will inevitably go down again.

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Mr. Speaker, we know what happened. Inflation reached 12 and 13 per cent and since it was too high they had no other choice than to raise interest rates to 22 and 23 per cent in an attempt to control it.
Our government accepted that responsibility. We told ourselves it was time to control inflation, and that increasing the interest rate was the way to do it. We knew that by doing so we would be hurting Canadians, but also the federal government! That goes without saying. But we acted in the best interests of our nation. It was the best solution: I think all Canadians would rather see the interest rate at 14 per cent instead of 22 per cent, as we have seen it before. When the interest rate reached 22 per cent, I was in business, Mr. Speaker, and I can tell you I worked very long days!
So, you have here the position of the government, the economic course of action we want to follow.
Finally, Mr. Speaker, the deficit will grow again this year, that's right. It will grow because the debt service costs, that is the amount of interests we have to pay, has increased by $6 billion, due to the fact that we have decided to control inflation by increasing interest rates.


Albina Guarnieri: Mr. Speaker, it is with great sorrow that I must rise today to defend the principle of universality, a principle that requires no defence to those in pursuit of a just society. It is a principle which the Prime Minister (Mr. Mulroney) himself has so often referred to as a sacred trust. I say with sorrow because the Government, in order to fulfil its obligations under the Free Trade Agreement, is creating Canadian social policy in the American image. The Government is clearly attempting to graft the American version of social Darwinism on Canadian social policy.
The Liberal Party touched a nerve in the last election when it warned Canadians that the Tory free trade agenda was more than just a economic contract. It involved the destruction of the cherished social service safety net. At that time the Prime Minister assured Canadians that universality was not on the trade agenda and that no Canadian leader in his right mind would consider touching the sacred trust.
Well, the Prime Minister misled the Canadian people. The principle of universality has been gutted. The Government has undermined the very backbone of Canadian social policy.
The principle of universality lies at the heart of a compassionate state. It is the birthright of every Canadian to be provided with not just the basic needs of survival but with the foundation of a meaningful and dignified life. This is why Canada offers more than the catch as catch can programs of the United States, and this is why we fought so hard against the Government's plan to integrate the social programs of Canada with the United States.
But this is precisely what the Government has initiated. It has tried to make the job of the Minister for International Trade (Mr. Crosbie) that much easier on the eve of the subsidy negotiations with the United States. Universality in Canada is not as the Government seems to feel, an income supplement to the rich. It is a sacred contract between the legislators in this House and all the Canadian people. We have adopted universality as a national philosophy to ensure that all Canadians have equal access to a high standard of education and health care. It guarantees that provincial Governments, through federal transfer payments, undertake to provide a basic standard of living that encompasses a decent standard of food and shelter to those who are unable to provide adequately for themselves.
It is, in essence, a guarantee of equality of opportunity. It ensures all Canadians an equal playing field.
Let me quote from a speech that the Prime Minister himself made last October 15. At that time he said a special word should be said to senior citizens:
In the future Canada will be doing more not less for all of you. As long as I am Prime Minister of Canada, social benefits, especially those for the elderly, will be improved not diminished by our Government, which is committed to social justice and fairness to Canadians.
I should point out that this speech was made in Summerside, Prince Edward Island. Perhaps we should ask the senior citizens of Summerside what they now think of their Prime Minister.
That this Government has seized this moment to end the principle of universality when we are clearly on the cusp of an economic downturn indicates just how hollow the Government's promises really are.
May 5, 1989

The Government's action also raises a larger issue. If universality is no longer considered a sacred trust by the Government, what is next on the Toiy agenda? Is it health care?
Policies can be set and replaced, but once traditional values and principles are abandoned they are veiy difficult to reclaim. This Budget proposes that Canadians repay old age security and family allowances at a rate of 15 per cent of the individual net income exceeding $50,000. The level of benefit received by families and individuals will no longer be equal but will be dependent upon the established threshold. These measures clearly violate the long-standing tax policy known as horizontal equity. This concept proclaims that individuals are treated equally under the tax system and that individuals at the same level of income should be taxed at the same rate. However, this Budget treats old age security income as extraordinary income. It is treated differently from other forms of income.
To take an extreme example, a senior citizen who earns $75,000 will pay more in taxes than a 64-year old who earns the same income. This is because under the proposed system, old age security income is subject to a higher tax rate. The senior will have part of his income taxed back at 100 per cent while the 64-year old will still only be subject to the top rate of 29 per cent before surtaxes. How is that for fairness?
I would like to read a brief passage from an article by Marjorie Nichols in the Ottawa Citizen dated April 29, entitled "Wilson's fiscal axe cuts heart of social programs". She writes:
It is sophistry to argue that programs that eliminate all benefits to some are still universal. It is as silly as the Prime Minister's foolish attempt Friday morning to argue that ending universality will help the poor. It won't. The poor don't get any more. The Government just pays less, that's all.
She concluded with the statement:
Don't trust a Tory to tell the truth about a social program.
Well, bravo Marjorie. That is precisely what Canadians are thinking and saying.
Family allowances are not a gift. They are needed to cover the extra cost of living in raising children. With the Minister of Finance's new regressive sales tax, this benefit will be needed more than ever.
The family allowance cheque is of particular significance to women. Because of the changing social structure in Canada today, full-time homemakers and
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mothers receive no recognition. They are often treated as non-productive, second-class citizens. Probably the only real source of recognition they get for the work they do is their family allowance cheque. It is probably the only cheque they will receive in their own name. I repeat, this universal right is not a gift, it is an integral part of the Canadian social identity.
Even in strict financial terms, it is difficult to rationalize the Tories' attack on the family allowance system. The family allowance program is one of Canada's cheapest in terms of over-all expenditures. In fact, expenditures have decreased in the past few years due to changing demographics and due to the previous tax measures. The cost of this program will be $2.6 billion this year as opposed to $2.9 billion in 1984-85.
Family allowances are already considered taxable benefits. Already approximately 30 per cent of family allowance benefits are returned in taxation revenues, so this additional shot at middle-class families is clearly outrageous. Canadians have always accepted the concept of equal access to equal benefits at all income levels as part of the Canadian social ideal.
Successive Liberal Governments have tied this fundamental principle of universality to a progressive tax system. It was this system which ensured a fair distribution of social benefits. The Tory view of equitable distribution is clearly quite different. The Government has launched an all-out assault on the family allowance and Old Age Security.
For the first time, the Government has directly linked a tax back rate of a social program to the benefit received. This linkage alone is enough to expose this Government's notion of universality as a sham. However, when coupled with other regressive tax measures put in place by the Government, it is a disgrace. This is an extremely dangerous precedent. Canadians are concerned about where these measures will take us.
Today, the Tories have set the claw-back threshold at $50,000. However, this Budget has not pleased the Government's corporate backers. They are disappointed that the Government has failed to reduce the deficit. They cry for more. Perhaps the Tories will feel next year that once the principle of universality has been tapped there will still be water in the well and they will set the threshold at $40,000.

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Where does it stop? The urge to cut back even further will become irresistible. Where will it end? This Government has totally lost its credibility.
I would like to conclude by quoting from a speech made by the Tory Whip, the Hon. Member for Calgary West (Mr. Hawkes), who said while debating a similar related issue in this House in 1983: "This particular piece of legislation is an attack on the principle of universality and we are voting against it. Every speech we have made is in accordance with that principle".
This is a time for mourning, because we have not heard from one Ibry in this past week who has had the courage to speak out on the principle which obviously appears to have once been one of the mainstays of Tory philosophy.

Mr. Speaker, since World War II, Canadians have given themselves a universal system of social programs such as family allowances, old age security pensions and medicare. Universality means that all Canadians have access to the same quality of services, regardless of their income.
However, universality is attacked for the first time in the last Budget presented by Mr. Wilson. When the principle of universality is no longer respected, the government has the discretionary power to decide who is going to have access to social services and who is not. This is a very dangerous precedent. The government will decide who is going to receive the money that is paid by Canadian taxpayers.
Mr. Speaker, this strange and injustifiable notion of social justice that the Conservatives have is not consistent with that of most Canadians.

When this Government tried to deindex seniors' pensions, thousands of seniors rose up in protest. Now, with the introduction of the new agenda all Canadians will rise up in anger. We will not be betrayed again. The true Canadian social vision will prevail.


Some Hon. Members:: Hear, hear!


Mr. Redway:: Mr. Speaker, I listened with care to the Hon. Member's comments. I listened with mounting concern and mounting disturbance over the impression which she has been trying to convey to Canadians. I
speak as one who some four and one-half years ago stood up in the House to question the Government with respect to its stand on the principle of universality. I speak as one who spoke out publicly to question the Government on its move to partially deindex old age pensions. I speak as one who felt the concerns of the Whip of my own Party, and the concerns of others in my own Party, when I spoke out on those issues.
However, I spoke out on those issues because I have been firmly committed to the principle of universality. I have made that statement quite clearly and quite strongly with my constituents and with the Canadian people.
This particular proposal that is before the House clearly observes the principles of universality. There is no question about that.


Some Hon. Members:: Oh, oh!


Alan Redway: The Hon. Members on the other side can hiss, boo and shout and try to obscure the facts. However, they cannot obscure the real facts. Every person 65 years of age or over who applies for the old age pension has in the past received an old age pension cheque and will continue to receive an old age pension cheque.
As the Hon. Member indicated, the Prime Minister (Mr. Mulroney) said that old age pension benefits will continue to increase. In fact, those old age pensions continue to be fully indexed and continue to increase each year with the cost of living according to full indexation. What has happened is that as part of a progressive tax system there is now being applied a tax to people with higher incomes rather than lower incomes. That is part of a progressive tax system. That is a system which I would assume the Hon. Member and the members of the Liberal Party should be in favour of. I have heard them in the past speak out many times on the question of the unfairness of the tax system and the fact that the rich should be taxed and the poor should be taxed at lower levels. That is exactly what this proposal is doing. The tax is at a higher level for people with higher incomes than it is for those with lower incomes.
I would ask the Hon. Member this: Is she and is her Party in favour of a progressive tax system which taxes people with higher incomes more than those with lower incomes?


Albina Guarnieri: Mr. Speaker, I thank the Hon. Member for his commentary. I appreciate his commitment to the principle of universality. You will forgive my sceptic-

ism, Mr. Speaker, since we have heard it before from our colleagues from the other side of the House.
If you will recall, Mr. Speaker, I asked a question on universality to which the Minister of National Health and Welfare replied. I distinctly remember his answer. It was quite concise. He did say he was committed to the principle of universality. As I pointed out subsequently, there is a difference between principle and application.
In answer to the Hon. Member's question, I think it is quite obvious that the Tories cannot be trusted to pursue deficit reduction in a manner that is fair and equitable to all Canadians. The Budget discriminates against many sectors of Canadian society. Families with children are penalized in this Budget. One-parent families are penalized. Seniors are penalized. Women are most definitely penalized.
I trust that Hon. Members from the other side of this House will search their souls and rectify the inequities that currently exist in the Budget of the Minister of Finance (Mr. Wilson).


Steven W. Langdon: Mr. Speaker, I guess I am provoked by this latest exchange to make a comment. The comment is this: I have heard a lot of nonsense from the Conservative Party over the years, and not only from the Minister of Housing (Mr. Redway). He has usually been able to put points of view across that have reflected some understanding of reality and some sense of fairness. But he would have us believe that it is fair for a person who is aged 35 and making $100,000 a year should be paying a lower tax rate-


Alan Redway: Mr. Speaker, I would love to have the opportunity to debate the Hon. Member. He appears to want to debate me now, but this is an opportunity for questions and comments. If you will allow me equal time to respond to the Hon. Member after his comment directed at me rather than the Speaker, I would be pleased to do so, sir.


Some Hon. Members:: Oh, oh!


Mr. Deputy Speaker:: The period for questions and comments, of course, as the Member knows, is reserved for comments on the speech made by the Hon. Member for Mississauga East (Ms. Guamieri).


Steven W. Langdon: In that case, Mr. Speaker, I want to make it quite clear that I thought the Member was absolutely correct, contrary to some of the silly suggestions from across the way, in pointing out that when you have a system of universality, what you succeed in doing is creating a system that in tax terms is fair. At the
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present stage, of course, pensions are taxable and they are taxable at the rate at which any other piece of income is taxable. As the Member suggested, what this will do is create a situation where we take this special little piece of income, which is the return to senior citizens for the years of work they have put into this country, and we will tax it at a higher rate; in fact, ultimately at a confiscatory rate.


Mr. Kilgour:: Very interesting.


Steven W. Langdon: We are going to take everything away from these senior citizens. Why is it that those people should be chosen? That is the question I guess I would ask the Member who has spoken. It seems to me that this reflects the clear commitment against pensions right from the beginning of the Conservative Party and I would ask the Member if she would see things in those terms, too.


Albina Guarnieri: Mr. Speaker, I thank the Hon. Member for his insightful comments.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


Albina Guarnieri: I spoke from the heart. I never studied to be a court jester, so you will have to forgive me if I am not as entertaining as the Hon. Member across from me.


Some Hon. Members:: Oh, oh!


Albina Guarnieri: I think that is a very insightful question that the Hon. Member put to me. In return I would like to put it to the individuals where I think the question belongs, that is, to the Members opposite us.
Why have they penalized the weak, the vulnerable elements of our society?


Henry Perrin Beatty: The weak rich. The upper income weak.


Albina Guarnieri: We have heard from the Tories this theory of Robin Hood. Well, I maintain that they are the Sheriffs of Nottingham, not the Robin Hoods of this world.


Frederick James (Jim) Hawkes: Mr. Speaker, it is nice to know that a new Member of the Chamber has taken the trouble to read a speech of mine from 1983.
I had the honour as a new Member in this House in 1979 to speak second on the Budget. I took great pride in rising in this House to inform the Members that in my view the 1979 Crosbie Budget-and I had the honour to speak after the then Hon. Minister of Finance-was the fairest Budget to poor people that had been presented to this House in the 1970s, and I watched the Members of the New Democratic Party and the Members of the Liberal Party in the House at that time stand up, vote

May 5, 1989
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against the Budget, defeat the Government and cause an election to take place.


Some Hon. Members:: Hear, hear!


Frederick James (Jim) Hawkes: One year later the organization that looks after the interests of those in poverty in Canada put out a public document that said the Crosbie Budget was the fairest budget to poor people that had been presented to this Parliament in the decade of the 1970s. Yet the Liberals and NDP voted against it and took it away from the poor people of this nation. Now I stand in this House and I say the millionaires of this country do not need the family allowance, they do not need the OAS, which is non-contributory pension, they will be glad to donate those back to the public treasury so the poor people of this nation can benefit from that money. I am proud to stand here and vote for it.


Some Hon. Members:: Hear, hear!


Albina Guarnieri: Mr. Speaker, obviously the Member turned a deaf ear to my pleas of fairness. But I notice that the Member did use the term fairness quite liberally-
I would like to ask the Member a question, if I may beg the indulgence of this House, as to where the fairness is for a family with two children in which both parents work and both earn $40,000 in income. They will not be forced to repay any of the family allowance payments which they receive since neither parent has a net income of $50,000. In contrast, a family that earns $60,000 net income will be forced to repay part or all of the family allowance it receives. I would love to hear the answer.


Mr. Deputy Speaker:: Is there unanimous consent to allow the Member for Calgary West (Mr. Hawkes) a short time to answer?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


Suzanne Fortin-Duplessis: family or individual, it happened when Canada started living beyond its means.
At first it started small. Early government deficits were not seen by some as much of a problem. But the deficits began to grow each year. By the early 1980's the deficit soared out of control so that by the time this government had come into office, the $18 billion debt accumulated over the first century of Confederation had balloned to nearly $200 billion. At the same time the annual deficit was $38 billion.
The country had been placed on a treadmill. The enormous national debt began feeding on itself because of the sheer size of the interest that had to be paid every year.
This government did not stand idly by in the face of this enormous fiscal problem. From 1984 to 1989 this government introduced several important measures to bring government expenditr '.s under control and to increase the yield from federal revenues.
The spending record of the last years demonstrates conclusively the success of our expenditure management strategy. From 1984-85 to 1988-89, total budgetary expenditures increased at an annual average rate of 5 per cent. In contrast, in the previous four years, expenditures rose an average of 15 per cent.
Nearly 45 per cent of the increased expenditure was due to higher public debt charges. The treadmill of debt we inherited is illustrated by the fact that by 1988-89, public debt charges were the single largest component of government expenditure.
This government has faced up to the debt problem over the last four years. To improve costs and improve government efficiency, we introduced measures to reduce operating costs. Tb remove inefficiencies, payments to Crown corporations and various subsidies were reduced. At the same time however, measures were taken to help those most in need and to help individuals adapt to changing economic and social circumstances.
Even so, the combination of expenditure management and continued economic growth were not sufficient to assure continual reductions in the annual deficit. Revenue-increasing actions were also required.
The yield from the tax system has been declining since the late 1970's and has contributed to the increases in the deficit experienced to 1984-85, this was due to actions instituted in the mid 1970's as well as the effect of the recession of 1981-82.
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However, since 1984, even before the 1989 budget, this government has introduced tax measures that have resulted in budgetary revenues increasing from 15.9 per cent to 17.4 per cent of GDP from 1984-85 to 1988-89.
The 1989 budget takes this effort further, necessarily. It is impotant to understand all the benefits that come from debt control.
First, debt control reduces the burden imposed on the future of our children. From 1981-82 to the time this government took office, the public debt per household rose from $12,300 to $23,100, an increase of almost 90 per cent. Since that time the growth of public debt per household has slowed despite the treadmill of high interest payments. Nonetheless public debt per houshold still stands at $34,200.
Second, debt control provides fiscal flexibility. The high cost of servicing the debt, projected to reach over $39 billion in 1989-90 or 35 per cent of all budgetary revenues, reduces the government's ability to respond to changes in the economy and to provide public programs. Furthermore, in order to achieve ongoing reductions in the deficit, combinations of program expenditure reductions and revenue increases are required just to offset increases in interest payments on the debt.
Third, debt control contributes to a healthy and prosperous economy which is the foundation for the maintenance of our system of social programs. Sustained economic growth requires low and stable interest rates, low inflation rates and a high degree of investor confidence. Debt control reduces demand and increases savings. Along with changes in the structure and functioning of the Canadian economy in areas such as trade with the U.S., deregulation of energy and transportation, privatization of Crown corporations, the replacement of the Foreign Investment Review Agency with Investment Canada, and personal and corporate tax reform, debt control has been a significant factor in the strong economic record of achievemjnt since 1984.
Fourth, debt control will raise the living standards for our children. It promotes high rates of investment by providing an economic environment conducive to growth and by reducing the shares of national savings absorbed by government to finance consumption. Ultimately this leads to higher productivity, more and better jobs, higher incomes and results in an enhanced ability to finance needed social programs.

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Therefore this government has taken action in this budget to meet the threat posed by the growing public debt. We have had difficult choices to make but we have proposed a package of measures that reduce spending and increase taxes while protecting those Canadians most in need.
Furthermore, this government remains committed to a caring and compassionate society.
Our policies have helped the needy and the disadvantaged-and will continue to help these people in the coming years, regardless of what the oppositon has being alleging. And this Budget does not jeopardize the social safety net-in fact, the Budget measures preserve the social safety net by establishing the path for a sound financial basis for social programs in the future.
Our commitment is reflected in our success in reducing the incidence of poverty and hardship among Canadians. Since this government has come into power in 1984, well over 600,000 fewer people are living under the poverty line and the incidence of poverty has fallen from 17.3 per cent to 14.1 per cent.
These advancements are in large part a direct response to the Government's performance on both the economic and social fronts.
In this regard, our economic policies have improved income security by creating more jobs across Canada-in fact, over 1.3 million jobs were created-and "the best social policy is a job". They have also held inflation in check.
We have already brought the Canadian economy back to a solid footing after the recession of the early 1980's. We are now consolidating that economic base in order to do even better.
Through tax reform, we improved the simplicity, fairness and equity of the income tax system by converting personal exemptions to credits and by lowering and reducing the number of income tax rates. 850,000 low-income Canadians were taken off the tax rolls as the result of this policy change.
The Government remains firmly committed to maintaining social programs while recognizing the need to direct benefits to those most in need. One only has to look at the important improvements made in recent years in respect of benefits available to families to see that this Government strongly believes in assisting families in need.
Family allowances are currently received by over three and one-half million families on behalf of six and one-half million children. Gross federal payments in 1988-89 for this benefit totalled $2.6 billion.
The Child Thx Credit program directs funds to lower-income parents.
Since 1984, the maximum value of the basic credit has increased by more than 50 per cent; that is, it has increased from $367 to $559 per child. In addition, to ensure that benefits are received by parents on a timely basis, the credit is now prepaid in November of each year. Approximately 800,000 Canadians received the prepayment last November.
For families with preschool-aged children, effective for the 1988 tax year, a supplement has been introduced to the basic child tax credit equal to $100 per child. The supplement was also prepaid along with the basic credit in November. For the 1989 and subsequent tax years, the value of the supplement will increase to $200.
The issue of family violence is also a concern for this government-because it has long-lasting effects not only on individuals and families, but on society as a whole. Clearly, we all have an interest in resolving this problem. In 1988, the Federal Government announced a $40 million commitment to help address the problem of family violence. The cornerstone of this initiative is the establishment of 500 new short-term shelter units through CMHC for crisis assistance. The first emergency shelter funded through this initiative was opened in Swift Current, Saskatchewan.
Given the increasing Labour force participation rates of women and the changing structure of families, there is no doubt that child care is an important matter which the government must actively support, and we do provide substantial support-in the order of over $600 million per annum.
Included in this, of course, is the $200 million federal contribution to provincial/territorial governments in respect of their expenditures for child care services, under the Canada Assistance Plan.
Also included are the tax revenues foregone in respect of the Child Care Expense Deduction. Effective for the 1988 tax year, this deduction was increased in order to better reflect the actual costs of care faced by parents using receipted child care. For parents with preschool-aged children, the maximum deduction is now $4,000 per child, up from $2,000.
There is a $100 million child care initiatives fund which is intended to support innovative approaches to child
May 5, 1989

care. To date, the fund has supported a wide range of projects including a national child care survey by the National Day Care Research Network, a national conference sponsored by the Canadian Child Day Care Federation (which was held in early April in Winnipeg), and an evaluation of family day home care in Ontario.
The Government is committed to a comprehensive strategy for responding to the Labour Force Challenges of the 1990's. To ensure that the Canadian Labour Force of the 1990's will be highly skilled and capable of adapting to an evolving work environment, a new Labour Force Development Strategy was developed and announced in April.
Included in the strategy is the introduction of a multi-tiered system of maternity, parental and sickness benefits. The new regime will allow claimants to receive each type of benefit up to its maximum, as long as the cumulative duration of special benefits does not exceed 30 weeks.
Canadians can take considerable comfort and pride in the health and social security system that has been developed and fostered in this country. The most important thing that can be done to maintain and enhance this system is ensure a healthy and prosperous economy. The Government must act in a fiscally responsible manner now, in order to ensure a generous future for the generations to come.
To sum up Mr. Speaker, everyone in this House has a responsibility to pass on to Canadian children a system of health and social programs that will meet their needs and provide the kind of protection Canadians expect and demand.
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Unless it is recognized that such a system cannot happen without a commitment to fiscal responsibility, then future generations will be faced with a legacy weaker than the one we inherited.


Mr. Deputy Speaker:: It being 5.45 p.m., it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the business of Supply pursuant to Standing Order 81(14).

Accordingly, the question is on the motion standing in the name of the Hon. Member Cape Breton-East Richmond (Mr. Dingwall). Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


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


Some Hon. Members:: Yea.


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


Some Hon. Members:: Nay.


Mr. Deputy Speaker:: In my opinion the nays have it. Pursuant to Standing Order 46(5), the recorded division stands deferred until six o'clock on Monday, May 8,1989.
It being 2.47 o'clock, this House stands adjourned until Monday next at 11 o'clock pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 2.47 p.m.