1989-10-17

Hon. Doug Lewis (Minister of Justice and Attorney General of Canada):: Mr. Speaker, I am pleased to table, in both official languages, a number of Order in Council appointments which were made by the government.
Pursuant to the provisions of Standing Order 110(1), these are deemed referred to the appropriate standing committees, a list of which is attached.


SMALL BUSINESS
Hon. Tom Hockin (Minister of State (Small Businesses and Tourism)):: Mr. Speaker, pursuant to Standing Order 32(2) and prior to the beginning of Small Business Week, October 23 to October 27,1 am pleased to table, in both official languages, the first annual report on the state of small business in Canada. It is entitled Growing to Meet Tomorrow.

Mr. Speaker, this annual report highlights the success of small and medium-sized businesses in Canada and points out their important contribution to the country's economy.
The report also includes a listing of programs offered by various departments for small and medium-sized businesses.


COMMITTEES OF THE HOUSE
Mr. Rene Soetens (Ontario):: Mr. Speaker, I have the honour to present the report of the legislative committee on Bill C-4, an act to amend the Energy Supplies Emergency Act and to amend the Access to Information Act in consequence thereof.
[Editor's Note: See today's Votes and Proceedings.]
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PETITIONS
Mr. Peter Milliken (Kingston and the Islands):: Mr. Speaker, I rise to present a petition signed by a number of concerned Canadians from the Toronto-Scarborough area. This petition was collected by my friend, the hon. member for Scarborough West.
The petitioners are petitioning Parliament to reject the vicious, nasty and mean measures contained in the bill and soon to be introduced in Parliament providing a goods and services tax, a draft bill of which we received on Friday from the Minister of Finance.
The petitioners call on Parliament to reject this bill notwithstanding the wicked advertisements that this government saw fit to place in Canadian newspapers to convince Canadians that this is a good tax.


Mr. George Proud (Hillsborough):: Mr. Speaker, I rise pursuant to Standing Order 36 to present petitions signed by constituents of the riding of Hillsborough and other parts of Prince Edward Island.
They too are concerned about the proposed goods and services tax and ask that this Parliament do reject such.


Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, it is my pleasure and my duty to present a petition signed by some constituents in Ottawa-Vanier from Michel Circle and Lavergne, Lebrun and other streets. They claim that the present federal sales tax was

Routine Proceedings
increased from 9 to 13.5 per cent by the Conservative Government.
That this same Government wants to impose a new hidden 9 per cent universal goods and services tax on Canadians.
That imposing this new universal goods and services tax will cause serious and unfair hardships for Canadians on low and moderate incomes.
That imposing this tax would be a costly burden for small businesses and that it would be inflationary-
For these reasons, they humbly ask Parliament to reject this new goods and services tax.


Mr. Jack Whittaker (Okanagan -Similkameen-Merritt):: Mr. Speaker, it gives me a great deal of pleasure today to rise and put before Parliament a petition also with respect to the mean and evil goods and services tax that this government has proposed to bring in.
The petitioners ask and pray that Parliament reject the current proposal for the goods and services tax, reform the taxation system so that there is an effective minimum tax on wealthy individuals and corporations, and ensure that if and when there is a broad public consensus on a sales tax measure to replace the manufacturers sales tax this reform not be an opportunity for the government to impose a massive tax grab.


Mr. Rod Murphy (Churchill):: Mr. Speaker, I have the honour today to present three petitions.
The first petition relates to the goods and services tax. It is signed by a number of people from New Brunswick and other parts of Canada explaining their opposition to the government's intention to bring in a goods and services tax.
They believe that the House of Commons should reject the current proposal for a goods and services tax, reform the taxation system so that there is an effective minimum tax on wealthy individuals and corporations, and ensure that if and when there is a broad public consensus on a sales tax measure to replace the manufacturers' sales tax this reform must not be an opportunity for the government to impose a massive tax grab and cause the Government of Canada-


The Acting Speaker (Mr. Paproski):: The hon. member for Vancouver East.


Rodney Edward Murphy: I have two petitions, Mr. Speaker.


The Acting Speaker (Mr. Paproski):: I will recognize the hon. member after the hon. member for Vancouver East.


Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, I am honoured to present a petition from a number of my constituents in Vancouver East on matters of great concern to them and to the city of Vancouver.
The Vancouver Port Corporation has entered into a 10-year lease with Elder's Grain Limited, a foreign corporation, as lessee to construct a grain transfer plant without any consultation or notice to the people who reside in the contiguous properties.
Therefore the petitioners call upon Parliament to direct the Vancouver Port Corporation to stop the development of this Elder's Grain Limited at the terminal dock site and ask that the community develop a comprehensive plan for Vancouver's inner harbour in co-operation with the city and the port which is compatible with the community.


Mr. Tom Wappel (Scarborough West):: Mr. Speaker, I rise today pursuant to Standing Order 36 to present two petitions to Parliament duly certified as to form and content.
Both petitions relate to the proposed 9 per cent goods and services tax, and they are signed by a total of 56 irate residents of my riding. They are irate because the present government is not listening to Canadians with respect to this sales tax.
They call upon Parliament to categorically and unequivocally reject any legislation brought forward to implement the said goods and services tax.


Ms. Beth Phinney (Hamilton Mountain):: Mr. Speaker, today I have the honour and privilege to present a petition signed by approximately 1,200 residents of Hamilton Mountain. The petitioners have spoken out
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overwhelmingly against the Conservative government's proposed 9 per cent goods and services tax. The petitioners believe that the tax is unfair.
These petitioners humbly pray and call upon this House to reject the Conservative government's 9 per cent goods and services tax proposal.


Mr. David Kilgour (Edmonton Southeast):: Mr. Speaker, I rise pursuant to Standing Order 36 to present a petition signed by approximately 37 of my constituents.
The petition demands, in effect, that Bill 178 of the province of Quebec be disallowed by the federal government as being contrary to our Canadian Charter of Rights and Freedoms.


Rodney Edward Murphy: Mr. Speaker, I have the honour to present two more petitions today. One is signed by 168 residents from Manitoba, Saskatchewan, and Alberta who are in support of Canada's only inland seaport.
These petitioners call upon the House of Commons to direct the minister responsible for the Wheat Board to ensure that at least 3 per cent of Canada's annual grain shipments are shipped through the Port of Churchill.
They also request that the government aggressively pursue additional ways to utilize this important seaport to ship exports other than grain.


Rodney Edward Murphy: Mr. Speaker, my last petition is signed by residents of the community of Churchill, Manitoba, along with others in the province of Manitoba.
They are protesting the decision of the federal government to cut back VIA Rail service in Canada. They believe that the government's announcement will only hurt the national rail system. It will cause the lay-off of Canadian workers.
The Government of Canada should make sure that we have an adequate, substantial and modem rail service for all Canadians.
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QUESTIONS ON THE ORDER PAPER
Mr. Albert Cooper (Parliamentary Secretary to Government House Leader):: Mr. Speaker, I ask that all the questions be allowed to stand.


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


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Wednesday, October 11, consideration of the motion of Mr. Wilson (Etobicoke Centre) that Bill C-28, an act to amend the Income Tax Act, the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act, the Old Age Security Act, the Public Utilities Income Tkx Transfer Act, the War Veterans Allowance Act and a related act, be read the second time and referred to a legislative committee.
Albert Glen Cooper: Mr. Speaker, in the last little while we have had a practice of allowing each party to divide its time and, instead of the usual 20 and 10 minute speech, to use it in two tens and two fives.
I have had informal discussions with the other two parties, and I am wondering if the House would be prepared to give its consent for us to put that practice in place today for the second day of debate on Bill C-28.


Jean-Robert Gauthier: Mr. Speaker, since the opposition was instrumental in implementing this practice of 10-minute speeches followed by 5 minutes for questions and comments, we would certainly not oppose such a procedure at second reading of a bill. I would hope the government would do this more often at second reading to give more members a chance to speak. I think that 10 minute speeches and five minute questions and comments are more constructive.
I have some hesitation because, if I heard the Parliamentary Secretary correctly, he said two 10-minute speeches followed by 5 minutes for questions and comments. I would rather have the rotation that we had: a 10-minute speech and 5 from the opposition, a 10-min-

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utes speech and 5 from the government side and vice versa, keeping in mind there is a 4-1 ratio here of applicability in terms of how often the opposition gets on. Rather than having the 20-minute speeches split into two tens and two fives on one side, I would rather we rotate all day.


Rodney Edward Murphy: Mr. Speaker, we may have to go back to the drawing board on this one. We still wish to have the option to have a full 20-minute speech from time to time during the day. I think we had better discuss this further.


The Acting Speaker (Mr. Paproski):: May I suggest that the member who rises states whether he will take 20 minutes, plus 10 minutes for question and comments, or 10 minutes plus 5. Is that agreed?


Albert Glen Cooper: Mr. Speaker, we do have a substantial agreement among ourselves, and we can arrange for the parties to do that.
We would encourage the members to go with the 10 and 5 in the normal rotation because it is not our intention in any way to rob members of the NDP, the Liberal party or the government of an opportunity to speak. What we would like to do is expand that opportunity at the second reading level as related to the comments made by the Whip of the Official Opposition.


The Acting Speaker (Mr. Paproski):: Am I to understand that when the member rises he will ask for either a 20-minute speech plus 10 minutes for question and comments or 10 minutes plus 5?


Some Hon. Members:: Agreed.


The Acting Speaker (Mr. Paproski):: So agreed. The hon. member for Edmonton Northwest.


Mr. Murray W. Dorin (Edmonton Northwest):: Mr. Speaker, since I did not stay up all night preparing a speech for this morning, I will in the spirit of co-operation attempt to stay to around 10 minutes or so.
Today of course we are debating Bill C-28, the amendments to the Income Tax Act that flow from this year's budget presented by the Minister of Finance in April.
Before addressing the tax matters that are in this particular piece of legislation, one should consider the context in which they are being put forward, because in any budget there are a number of elements.
First, there is the presentation of the government's fiscal plans for the year including its spending plans. From that we can determine the government's financial requirements, and from that the government must determine how they are going to fund those financial requirements, either through borrowing, through taxation, or perhaps through some other means.
If we take a look at the last five years during which time this government has been governing, we have seen a fairly consistent pattern over that time. Government spending in the over-all has been held down to something less than the rate of inflation in the country. At the same time, the economy has grown, but there has also been some need to put in certain tax measures to fund essential programming.
When talking about the spending side we can look at four elements of government spending which are essentially where government money goes. The first element is interest. Unfortunately, we have a large accumulated debt which generates an annual interest bill each year of about $30 billion. That, of course, must be paid through the interest payments, Canada Savings Bonds and other means that the government uses to finance its debt and its borrowing. We have approximately $30 billion a year in interest payments.
The second element of government spending is transfer payments to provinces. That sounds complicated, but what it means is the money that we give to provincial governments to fund social programs in addition to then-own tax revenue. By far the largest element is the amount of money that goes to support health care at the provincial government level. It is approximately $25 billion. We can call that the second quarter or second element of government spending.
The third element is transfers to individuals which are essentially for pensions and family allowances, the vast bulk of which are for pensions.
When we look at those three elements of government spending we find that we have a very difficult time in trying to maintain spending or cut spending without diminishing those programs. First, in relation to interest, one would have to default on our bonds, default on our debt, or not pay Canada Savings Bonds. I do not think
October 17, 1989

anybody is suggesting that that would be a very proper thing to do.
The second element of government spending, the transfer payments to provinces to fund health care, most people believe that we should continue to pay. There is a formula under which the government pays that amount based on the growth in the economy each year which means that that bill continues to escalate.
First, we have the interest bill escalating by roughly $3 billion a year due to the continuing deficit, as long as that is there. Then we have the transfer payments to provinces increasing by an amount of about $1 billion a year simply to maintain our existing level of health care and other services. Then we have the third element, transfers to people, which are increasing every year because there are more and more people over the age of 65 in our population. Unless we can somehow stop people from ageing, we are going to have a continuing ageing population. That adds approximately $1 billion a year to the government's requirements.
With all of that, the government must find an additional $4 or $5 billion a year just to maintain those essential services. We often hear people saying that what they should really do is cut their expenditures. That is fine. I think that we would all like to do that. However, we must realize that any significant cuts in government expenditures are going to have to be addressed at those areas because when we come to the last quarter of government spending it goes for everything else. Now, that is the area in which most people want cuts, because they do not monitor it particularly carefully, it is somewhat diffuse, and there are a lot of civil servants out there who think that there is a lot of money available through waste and misuse to be found.
That last quarter of government spending goes to pay all the civil service salaries, offices for them to work in, paper for them to shuffle, and virtually all of the expenditures that go along with the operation and maintenance of the government, including police, customs agents, and for that matter, tax collectors, and I suppose some people think we could do with fewer of those.
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That part of government spending has been held down. In fact, over the last five years it has been about 17 per cent of total government spending; it is about $1 billion less in absolute dollar terms than it was five years ago, in spite of the fact that we have had roughly 4 per cent inflation each year. The number of civil servants has been reduced to the 1972 level. That is the area that has borne the brunt of government expenditure cuts over the last five years, in order to support and maintain the other three areas that I described earlier. However, we have reached a point where we simply cannot make substantial cuts in that area any longer without seriously diminishing the services and the operations of the government which people desire.
We have two choices. We can either do something in the two areas, either through transfers to provinces which fund health care, or transfers to people which fund pensions, or we can try to increase taxation. This budget does some of both. In the area of transfers to people it is going to tax back and recover, from people with incomes of over $50,000 a year, the benefits that they received through the family allowance and pension system.
There have been some people who have been opposing this. There have been some people who have come to see me about this. I had a group of senior citizens come to see me about this. I told them what I want to tell you, Mr. Speaker.
In my view it is absolutely unfair for me to ask people who are in the workforce working or even trying to plan for their retirement, making an average income of $27,000 a year, which is approximately the average income in Canada, or perhaps living on an average family income of $47,000 a year, which is approximately the average family income in Canada, to pay more taxes so that we can continue to provide benefits to people who have retired, who are no longer in the workforce, who are over 65, and have substantially enough wealth that they still have an income of over $50,000 a year. We should not continue to pay them the old age security benefits. It would be totally unfair to tax people who are working, supporting families, trying perhaps to buy a home, trying to save a little for their retirement, earning $27,000 a year on average or $47,000 a year as a family, and ask them to pay more taxes so that we can continue

October 17, 1989
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to pay benefits to people who are retired and over 65 and who have incomes of over $50,000 a year.
This measure taken by the Minister of Finance, while it is not supported by everyone and while it has not been supported so far by the opposition parties, is a measure of fairness. In order to continue to pay benefits to those people who are receiving pensions and maybe do not have other income or perhaps are receiving pensions and have an income of $10,000 or $12,000 a year, and there are many of these people in my riding, we are going to withdraw benefits from people with substantial incomes.
I am prepared to defend that in any forum. I have told people in my own riding that. I have told that to people who came to meet with me and I have written letters to that effect. We cannot continue to fund more and more benefits for more and more people without finding that money some place.
There was a tax rally in Edmonton a week or two back and it was ostensibly to protest the goods and services tax. The incredible thing that I found was that groups went there to have petitions signed at the same time they were protesting the paying of tax, which is another subject for another day. They were asking people to sign a petition to maintain the full benefits for people over 65, full pensions for people with incomes of over $50,000. I find it incredulous that on the one hand people can oppose paying taxes, then somehow suggest that we should find money from saving it through government expenditures, and then oppose what is essentially a benefit to people who do not need it.
I know that we agreed earlier to only talk for 10 minutes. While I would have liked to have gone on for 20 minutes, I will stop here. I wanted to cover that one point. I have many others I would like to address but I will have to save them for another day.


The Acting Speaker (Mr. Paproski):: Is there a comment? The hon. member for Edmonton Southeast.


David Kilgour: Mr. Speaker, I listened with interest to the member's speech. What does he think the proposal does to the principle of universality? Does it get away from "directions by indirections, fine", I think was Shakespeare's phrase. It has been explained to me that
people paying taxes between 1951 and 1972 paid premiums based on their taxable income.
Will the member tell the members of the House and perhaps Canadians at large whether he thinks it is fair to people who were obliged to pay premiums based on income and happened to have provided for their retirement by keeping the OAS as part of their retirement package? Why should they now be penalized, bearing in mind that these people pay taxes on the same basis as the rest of us do based on ability to pay. It is hardly getting a free ride when they say that they are entitled to OAS because it was used in retirement planning and when they are perfectly prepared to pay income tax based on their taxable income now.


Murray Dorin: Mr. Speaker, I will try to address some of those questions. First, the point was made that at one time, I believe up until about 1972, a special tax was designed or designated to fund old age security. That has not been there for many years now, at least 15 years. I would think that if we were to look at how much came in through that tax and look at the benefits that have been paid out since that time we would find that what came in has been paid out many, many times since then.
To suggest that money paid 15, 20, 25 years ago is still around to pay benefits is unrealistic. We can all talk about unfairness. There is a certain element of unfairness. I believe it is most unfair to ask people who are in the workforce earning $27,000 a year, perhaps supporting families, to pay additional taxes so we can fund benefits for people who are essentially in a position to not really require them.
If you have an income of $50,000 a year in retirement, you must have a substantial asset base. I just cannot believe for the life of me that we should somehow be suggesting that these people deserve more, but in order for them to have more, people who are earning $27,000 a year in the workforce, struggling to make a living, should be asked to pay more tax. It makes no sense to me.


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated. Debate with the hon. member for Okanagan-Similkameen-Merritt. Is the hon. member going to speak for 10 minutes?


John R. (Jack) Whittaker: Mr. Speaker, I will be taking the full 20 minutes.
October 17, 1989

It is a pleasure to rise today and speak on this bill. I should say right at the outset that since I was elected to Parliament in November of last year, I have had two occasions to rise and speak on bills in a positive vein. From the opposition point of view, that is something that comes too infrequently. Certainly it is a pleasure to be able to do it.
When we consider the present bill before us, historically I should be standing before you speaking positively on the expansion of the universality principle; on the expansion of benefits to our seniors and to our families with children.
On March 7, 1984, our Prime Minister said, "Our position is simple and straightforward. We are in favour of universality and social programs and it shall not be touched". Over the period of time there were attempts, particularly in 1985, perhaps not to touch the universality aspect, but certainly to de-index pensions of seniors. Of course, an outcry arose and, as a result of that outcry, the Prime Minister saw the folly of his idea and backed off.
On October 15, 1988, in Summerside, Prince Edward Island, Mr. Mulroney again approached our seniors and told them, "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, especially those for the elderly, will be improved not diminished by our government which is committed to social justice and fairness for Canadians".
Now arising out of that particular quote, again I fully expected to be able to come before Parliament and, as an opposition member, pat the government on the back for the expansion of its social programs, for its assistance to the elderly and for coming up with better programs such as daycare and such as a better family allowance assistance for the families of Canada who are struggling today.
When I examined Bill C-28, and the government's approach to the family and to the seniors aspect, I found that this government, that had promised to make things better for our seniors, was reneging on that promise. I would suggest that it is attacking the very principle of universality that has grown so near and dear to us in Canada.
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This clawback does not maintain the principle of universality as Mr. Mulroney and Mr. Wilson have contended. It marks the steady erosion-


The Acting Speaker (Mr. Paproski):: I would hope that the hon. member would recognize these individuals by their portfolios. Thank you.


John R. (Jack) Whittaker: I do apologize for that, Mr. Speaker.
The principle of universality has not been maintained, as the Prime Minister and Minister of Finance have contended. It marks the steady erosion of our social programs, down to a much lower denominator. From now on social programs will be for the poor only. They will be targeted for those in need and, thereby, made selective, not universal. The clawback will move our pension system closer to that of the United States. No pension exists in the United States as a right of citizenship, but it does in Canada for those over the age of 65. This is something that we in Canada, our parents, our grandparents and those before, have worked hard for over a lengthy period of time. And now we have seen the wedge being driven in by this government.
It is interesting to note that in a letter to a person in Edmonton, the chairman of the finance committee said: "We have decided to eliminate universality. While a clawback may be unfair and sneaky, it is there". Well I suggest that this clawback is unfair and it is sneaky. In fact, it does through the back door what this government has promised not to do-attack the very basis of universality that we in Canada have grown to understand as a right.
We do not need and we do not want a system that is based on need, that is based on a means test. We are different in Canada and we are proud of it. Throughout history we have not been the same as our neighbours to the south.
If we in the opposition have anything to say about it, I suggest we will not be the same in spite of how hard this government tries to harmonize those of us who were born and raised in Canada and those of us who have immigrated here and set up homes. It will not be able to suppress that difference in Canadians. In spite of the fact that we now have the free trade agreement, and those pressures within that free trade agreement to harmonize many aspects of our Canadian life that we hold near and dear, we shall not give up or give in without a fight. I suggest that pressures will be so enormous against the

October 17, 1989
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harmonization of our social programs with those of the United States, that this government will not be able to quiet the din that they will hear from all across Canada.
It is not just the goods and services tax that will hit our seniors and our families, it is methods such this clawback of old age security and family allowance that threatens the very principle that the basis of universality is built upon. We will hear the arguments in support of the clawback that is proposed in this bill, and have already heard some this morning, that those who make $50,000 a year really do not need the assistance of the old age security or the assistance of the family allowance. But what they fail to point out is that the system that has been set up, with a level now of $50,000, is the thin edge of the wedge. Any future government can drop that level to $40,000, to $30,000,or to $20,000, as it sees fit in order to break down our present system of pensions and family allowances. That is the crux of the argument. Once the door has been partially opened, it is but a small push to open it the rest of the way and create the flood toward the complete destruction of our social programs. We on this side of the House and in this comer of the House will not allow that to happen.
The other factor that we have to look at in this clawback is the fact that it is only partially indexed to the rate of inflation, so that up to 3 per cent is not taken into consideration from year to year.
At today's $50,000 level, as Mr. Wilson says, only approximately 4 per cent of Canadians are affected by the clawback. However, if we look at the facts, we know that within 10 years the number of seniors who will have at least part of their old age security clawed back will be one in twelve, or up 8 per cent from 128,000 to 300,000 persons. In 20 years, that number will be one in four, or one million people, or 25 per cent of those receiving it will now be giving at least part of it back. The amount will drop back so that eventually the average will drop.
Right now, if we look at family allowances, we know that the average Canadian income is $45,000. It does not take much imagination to see that within a year or two even those now making $45,000, with the rate of inflation going up at least 3 per cent, will be paying back at least part of what they get in family allowance. We have
effectively turned our system into that of a means test. If you need it, you get it.
Our contention is that these people are already paying tax. The unfairness of this clawback is readily apparent. Those with two incomes in a family, perhaps one at $45,000 and the other at $35,000-will be excluded. They will not have to pay any of it back. Yet one person making $56,300 will end up having to pay all of their family allowance back to the government. They pay their taxes which go into this assistance. Now they are going to have to pay back what they are getting as a credit toward having a family. It is unfair. It is discrimination against those with families. They are being doubly taxed.
Similarly, it has been pointed out many times by seniors, that since the 1950s and until 1972,1 believe up to 4 per cent of income was paid toward the old age security. In 1972 that was wrapped in and was not taken into account. I suggest that it is, in fact, part of the tax system and has continued to be paid since 1972. Many people point out that they have paid for their old age security. They have set their budgets accordingly and they have anticipated that income in calculating out their savings throughout that period. I would like to read to the House some comments and in one case almost a complete letter. A gentleman has written to me from Penticton, which is in my riding of Okanagan-Similka-meen-Merritt, and has asked if it would be possible to read his letter to the House of Commons. He states:
The old age pension is a pension. That is how it is defined now. It is not welfare. It is a form of wealth. It was not granted for need, as welfare is, but for merit to deserving people as pensions are.
The obvious objective of this government is to redefine that pension as welfare. They obviously hope to do that by taxing and treating it like welfare. Once that tax, and its new definition, has been accepted by Canadians the government can decrease it or eliminate it. They are already eliminating some people's old age pensions. Obviously they will not get much additional revenue from those few people so how safe are the pensions? This government obviously knows they may not be able to make this odious tax grab stick if it is challenged. No wonder they are spending millions of our tax dollars trying to trick Canadians into accepting their newly fabricated definition.
Obviously then Canadians should not let this government tax anyone's old age pension any differently than any other pension. United we stand, divided we fall. Canadians shouldn't be deceived. It is obviously only to reduce the sympathy and support, that other Canadians might give to the first victims of this odious scheme, that the government has put the amount of their current means test high
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enough so that most pensioners will not be affected at this time. Who knows how much lower that amount will be in the future? Forty, thirty, twenty thousand or will the pension be abolished altogether? That seems most likely.
Cunningly these deceitful people are suggesting that other pensioners might get their own pensions increased from the funds extracted from their fellow pensioners. Is that likely? Can anyone believe that? These people have said they want to reduce the deficit. Are they not now actually cutting back on social programs? Are they likely then to increase anyone's old age pension? Can they be trusted? What is their record? Remember their actions, not their words? Do they deserve anyone's trust? Divide and conquer seems to be their dominant policy in relation to so many things.
Every person getting that pension now could lose it and there might well be no such pension in the future for any other deserving Canadians. No one's old age pension is safe.
Our government can obviously, even now if they choose, increase old age pensions without taking away anyone's pension. All they need do is to collect more taxes from all those people who are not now paying their fair share. Or they can raise the tax rate for all Canadians in the upper tax brackets. Or they can tax the excessive wealth that discriminatory tax policies make possible. How about the excessive wealth of the multi-millionaires and billionaires? Those people can't possibly earn such wealth can they? Do they need it?
It is signed by A. J. Lancey. That gives an idea of how people are viewing government and government policies. One of my constituents in East Gate, Manning Park, states in respect to what is happening:
I am writing you to express my deep concern over the finance minister's proposed shabby treatment of Canadians in their twilight years. I am referring of course to Mr. Wilson's proposed removal of universality of the old age pension through his scheme to grab it back through taxation.
It seems to me that when you contribute all your working life and in fact are obliged to contribute as in the case of old age security tax, that it takes a pretty damned dishonest as well as uncaring person, to seek to snatch away your well earned benefit just about the time you had every fair and reasonable right to start enjoying such benefit.
Mr. Speaker, it is obvious that the people of Canada are not only disappointed with the policies of this government but they are annoyed by what has been laid out on the table for them for the future.
It is clear from many groups throughout Canada that they look upon this as a nasty tax. The National Council of Welfare has stated: "Universality, the principle under which programs are available to all Canadians regardless of income, is dead". The National Anti-Poverty Organi-
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zation has said that: "The government is obviously ending universality but does not want to actually say those words". One Voice, a seniors group, has stated that: "Changes represent an erosion of universality and would unfairly target senior citizens". The Vanier Institute of the Family has said that: "The proposals effectively withdraw what little support remains for the family".
I will not be the only voice speaking from the wilderness. There are many of us across Canada who are telling this government that enough is enough. Leave our social programs alone.


Mrs. Vezina:: Mr. Speaker, I would like to make a brief comment and ask my fellow member a question.
I would simply remind him that before I entered politics in 1984, I worked with families and with seniors and I very well know the difference between the principle of universality and the practice of it.
The measure presented by the Canadian Government is fair and equitable.
I met seniors throughout Canada in the last six months and I discovered full citizens who want to share and take part in the Canadian challenge that we are offering them as a Canadian Government.
The measure we are proposing therefore does respect the practice of universality, which for me means ensuring that every Candian who is 65 or over has at least a minimum. Name me just one Canadian (over 65) who does not get an old age security cheque! The very principle of the old age security pension is to provide needy persons with a minimum and as a responsible government, our responsibility is to help the less fortunate.
I would therefore like to ask my colleague to tell me how he can say to Canadians who are 65 or older that the measure we are advocating does not respect universality. We are asking those earning at least $50,000 net to show solidarity and I know that many Canadians I have met agree to take this challenge because together we must have some extra funds to improve our social programs, just to help the seniors who really need it.

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John R. (Jack) Whittaker: I am somewhat surprised. I have a great deal of respect for the minister. I think that for the most part, she is an excellent minister. She has the best interests of seniors at heart.
However, having said that, I am somewhat surprised at the minister. She told the House that over the last six months she has spoken to various seniors groups, and perhaps they agree that we have to attack the problem of the deficit and deficit financing, but I do not think that any of those groups have said that they are in agreement, either partially or in principle, with this massive clawback, this unfair double taxation of what they, as seniors, have worked so hard to gain throughout their lives.
They do not mind paying their fair share and they are very clear on that, but they do not want to have to pay more than their share. They want others who are not paying their share, such as the large corporations, such as the wealthy, such as the high income earners with incomes over $80,000 a year, to pay their share. I suggest to the minister that they are now in their golden years, now in the years that they have looked forward to for travelling, enjoying themselves, relaxing and not having to worry about where their money is coming from. They do not feel that they should have to carry the burden of taxation in Canada.
I agree with them. I do not think that they should, after all of these years of working and assisting the government in bringing taxation into the coffers, have to do more than their fair share. Let us tax those with the ability to pay, as they have suggested. Let us not attack the family. Let us not grab from the seniors when they are least able to defend themselves because I, for one, will stand in my corner and I will kick and I will fight and I will stand up for the rights of those seniors if they cannot do it themselves.


Mr. Martin (LaSalle-Emard):: Mr. Speaker, one of the proudest heritages of this country is the fact that we are, indeed, a compassionate and tolerant society. I am very proud to stand up on this side of the House and say that that is the heritage of the Liberal party to this country.
I would like to congratulate the member for his speech and for his very clear enunciation of policies which we in the Liberal party have created since the Second World War. I would like to welcome him in this broad Liberal philosophy that we have created, this philosophy of
understanding the needs of the poor and the disadvantaged and the downtrodden.
My question to the member is, could he possibly explain to this House how it is that the Conservative Party has a philosophy which is so alien to that which is held by the vast majority of Canadians? Does he understand why the Conservative Party and this government are prepared to claw back from senior citizens money which they have paid into the government's funding in order to maintain a decent and universal system of pensions in this country?
Does the member feel that the government adequately consulted with seniors in this country before expropriating their savings? I would like to ask the member if he could possibly explain to us how it is that we have elected a government which is so foreign to the needs and the aspirations of Canadians.


John R. (Jack) Whittaker: Mr. Speaker, I thank the member for his questions. I would like to point out that the social programs that we have seen developed in Canada are the legacy of the likes of M. J. Coldwell, J. S. Woodsworth, Tommy Douglas, David Lewis and Edward Broadbent. We in this party are very proud of those former leaders and the fact that they were able to show the government in power at that time the error of its ways and the ways of the future. We thank them very much for seeing that and for bringing in the legislation that has been near and dear to and a basis of our party for so long.
To turn to. the hon. member's question with respect to the government, I often wonder how a government that speaks and talks as if it is caring can then trip the very people that it says it is caring about and tramp them into the mud as it stomps by them. It is truly a shocking policy of an uncaring government.
We have worked so long in the past to try to make equal some of those within our society, and now under the free trade agreement with its various pressures for harmonization, all of the things that have been worked toward since the Second World War in particular, and since the turn of the century with the advent in the early 1900s of some of our old age security systems, are being eroded because of an uncaring government.
I think that we on this side of the House must ensure that the people of Canada well recognize that there is more on the plate of this government for them in the future. We must stand up and ensure that measures that will hurt the poor, measures that will hurt those on fixed incomes, measures that will hurt the family and mea-
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sures that will hurt seniors will be stopped and blocked now.


Mr. Jean-Pierre Blackburn (Jonquiere):: Mr. Speaker, I would like to say that I would agree to talk for ten minutes and after to have five minutes of questions to permit others of my colleagues to also have time to participate in this debate.
Also I will talk about Bill C-28, the income tax review. [Translation]
In fact, about the Income Tax Act and related legislation. Mr. Speaker, I think it is important that taxpayers, that all Canadians be aware of the major aspects of this Bill. In fact, the measures contained in this enabling legislation reflect the commitment made by the Government to reduce the deficit and improve the fairness of our tax system. These measures include a high-income surtax; second, a deduction in respect of part-time attendant care expenses for the working disabled; third, the refundable sales tax credit will be doubled and the income threshold at which the credit starts to be reduced will be increased; furthermore, Mr. Speaker, the new tax on large corporations and modifications to the existing corporate surtax are expected to raise an additional one billion dollars from the corporate sector in the first full year of application of these measures.
Mr. Speaker, those were a few highlights, but the 1989 budget's measures are in line with the objectives of the 1987 income tax reform, and they support-in fact they will provide for a more stable tax base which will help the government deal more efffectively with the deficit. They also help create an investment climate that is a response to economic rather than fiscal considerations. Finally, and most important, Mr. Speaker, they improve the fairness of our tax system by requiring high-income Canadians and the corporate sector to contribute to a greater extent to meeting the government's revenue requirements.
Mr. Speaker, when we talk about raising taxes and reducing the deficit, it is always difficult to explain to taxpayers that they must contribute more to the economy of their country. However, the government's perspective- On the weekend in Jonquiere, the riding whose residents I have the honour to represent in this House, I
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was telling taxpayers that our government was even better than it was in 1984.1 explained that in 1984, many of our Tory members had been elected for the very first time. We did not have much experience but we were ready and willing, and we really wanted to help improve the situation in this country and reduce the debt so that we could maintain social programs. Gradually, however, because of our lack of experience and at a time when we might have been able to introduce new legislation and apply new measures, we had to cope with a series of political scandals, which was a very trying time for all members in this House.
The government has now been given a second mandate. It has a very solid agenda, Mr. Speaker, and we now have a chance to implement decisions which had been postponed or delayed. Now we have to do something. We have no choice. The debt is now 324 billion dollars and costs us between 80 and 100 million dollars a day in interest. One hundred million dollars a day! In the Saguenay-Lac-Saint-Jean region, when we talk about what it costs to build a highway from the Saguenay to Quebec City, we are talking about $200 to $300 million. With two or three days' worth of interest payments, we could build a highway so that the Saguenay would have far more convenient and safer access to the Quebec City area, for instance. Unfortunately, we cannot pick up those two or three days' worth of interest payments and take them home. The government can't do that, and meanwhile, the whole region may have to wait ten, twenty or thirty years for that highway.
One hundred million dollars a day in interest payments, Mr. Speaker-You know what our social programs cost, including old age security pensions and family allowances. If we didn't have to pay $100 million a day in interest on our debt, we could give a lot more to the taxpayer. One hundred million a day in interest payments, Mr. Speaker, is as if every day, the government sent a cheque for $20,000 to 5,000 people. Do you realize how many people we could pay this kind of salary in one year? That is what our debt costs us every day.
Mr. Speaker, we must understand that when we want to reduce a debt-Remember that in 1984, when we came to power, the debt was $200 billion. Five or six years- later, the debt has now increased to $324 billion. Canadians may not realize this but when we came to

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power, the government's annual deficit was $38 billion. So when we were elected, with this $200 billion debt plus the annual deficit, we were in for $238 billion. The following year, we were able to reduce the deficit from $238 billion to $234 billion, but $34 billion was still added to the deficit, and the process goes on. Now we have managed to keep our annual deficit down to about 28 or 30 billion dollars, but it keeps adding up.
And that is why the government can no longer afford to provide these social programs, unless it takes certain steps that are necessary.
I think that event if my colleagues in the NDP and the Liberal party, are against tax increases, they will understand that, as a responsible government, we have to act, we have to do what is necessary, because otherwise we would be acting irresponsibly towards future generations of Canadians.
Mr. Speaker, I saw the same thing when I was a member of the Legislative Committee on Bill C-21. I travelled across this country for three weeks. We visited all 10 provinces of this country. I saw provinces with an unemployment rate that was lower than average, and I saw others with an unemployment rate that was higher. In British Columbia, I saw a very prosperous city, Vancouver, a delightful place. However, I saw other parts of Canada like Newfoundland which is not as well off as the other provinces. I met people in St. John's. The economic situation is different.
With a vast country like ours, the government has to try and reduce regional disparity and get the richer provinces to pay for the poorer provinces, so that everybody will be happy in this beautiful country of ours and we can have social programs for all Canadians.
Still on the subject of unemployment insurance reform, and I think this is an important point, about 200 different groups appeared before our committee with briefs in which they explained their views. Across this country, people were saying: "Sure, we agree with your plan to do more through unemployment insurance reform, but not with what you want to remove, what you want to remedy. If you want to use $800 million to train workers, when 30 per cent of our young people drop out before they even finish high school, if you want to spend
$800 million more on training, that's fine. But don't take the money from the unemployment insurance fund. Thke it out of taxes. Get more money from the taxpayers. Unfortunately, we can no longer afford to do that, either as a government or as Canadians.
We now have to take the money we have to reallocate. Let me give you an example, Mr. Speaker. Let us assume we have 989 different programs in this country. There may be 1,000 or 1,050 but let us say there are 989 different programs. If every time we want to give Canadians a little more, we have to add one more program, there comes a time when we have to ask the question: Where is the money going to come from?
That is the problem. We have to look at these programs and cancel the ones that are no longer effective or not as good as they were, and then take the money and reallocate it to better programs that will meet the needs of Canadians, that respond to the present situation and reflect the Government's new perspective and the new needs of Canadians.
So that was an example of using new funds. Remember what the Liberals said when we cut the Katimavik program. We even had Senator Hebert on a hunger strike in front of the Senate Chamber! He said it didn't make sense to cut the program, that we were doing a terrible job as a Government. However, nobody even talks about the program anymore, and I think everybody will agree we were right to do what we did. We saved money and we took that money and spent it or- other programs.
Mr. Speaker, the legislation before the House today reflects the government's policy of trying to maintain the standard of living and quality of life of Canadians and ensure we can keep our social programs. We have to bear this in mind, Mr. Speaker. We have no choice. This is serious stuff! We have this debt and there are no two ways about it.
I want to ask all members of this House to work together so that this bill can be referred as soon as possible to committee, so the government can proceed with the other items on its agenda.
I think unemployment insurance reform Bill C-21, will be particularly important.

I also believe that the goods and services tax, and I will talk about that later because I have a lot to say about it- If my collegues have any questions, I will be glad to try answer them.


Thomas (Tom) William Wappel: Mr. Speaker, I thank my colleague for his speech. I have a question for him. He indicated in his opening remarks that he would like to address the bill so that perhaps Canadians could understand it. I have a copy of the bill in my hand which contains some 84 pages and which proposes to amend a number of different acts. I would like to ask my colleague basically about integrity.
In 1987 the Minister of Finance indicated that the surtax which had been brought in would be removed when a new sales tax was introduced. We know that there is going to be a new sales tax introduced. That is what we have been talking about for the last little while. Lo and behold, if we look at Bill C-28, and I direct my hon. friend specifically to clause 47 of that bill, we see that Section 180.1 of the Income Tax Act is going to be amended, not in fact to remove the surtax but rather- and I wonder how many Canadians really know or appreciate this-to increase it from 3 per cent to 5 per cent across the board, and in addition, to increase it a further 3 per cent for those people who pay over $15,000 in tax in a taxation year, bringing it to 8 per cent.
I would ask my colleague to comment first on the fact that his own Minister of Finance indicated on June 18, 1987 that when the new sales tax was brought in the surtaxes would be removed, and why we have in Bill C-28 not only a failure to remove surtaxes but an increase of those surtaxes. This on top of the sales tax that this callous government is expecting Canadians to pay.
[Translation\


Jean-Pierre Blackburn: Mr. Speaker, I understand my colleague is trying to find something in the Bill whereby the government will get more money.
However, my colleague forgets to mention the good points for many Canadians.
I see my colleague smile. He does not seem to find any in the bill! What about the tax credit we have almost doubled, Mr. Speaker! I think that is a very positive measure that our government is presenting just so low-income Canadians can have more money and be
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able to handle the various cost-of-living and other increases in this country. We propose to do the same thing with the future goods and services tax! Let us remember, and I remind my colleague, that the new 9 per cent tax will replace the old 13.5 per cent tax that is now applied to nearly 75,000 manufacturers. There are about 22,000 different regulations and interpretations to collect the 13.5 per cent tax. We will do away with that and replace it with a new 9 per cent tax.
So that low-income Canadians can absorb this 9 per cent tax, we will send them four cheques a year to compensate for it. For a family with two children, for example, that amounts to about $715. For a single person, it is over $400. That is an example of the tax credit that we will give to low-income individuals to help them with this new tax.
The same thing is in this bill: the sales tax credit is being raised to help give taxpayers the income they need to deal with difficulties and meet their obligations and buy things as they like.
I think that Canadians-I can tell you, I met people from Revenu budgetaire who do tax returns. This is a voluntary organization in my riding that helps low-income taxpayers get the famous sales tax credit and the other amounts the government gives every year to those whose income is under $15,000.


The Acting Speaker (Mr. Paproski):: May I ask whether we are going to have the pleasure of a 20-minute speech or a 10-minute speech from the hon. member for Burin-St. George's?


Hon. Roger C. Simmons (Burin-St. George's):: Mr. Speaker, I believe I can say what I want to say in 10 minutes. That might come as a surprise to you, Sir, but I will do my very best.
I suppose it is appropriate that the last two Tories who spoke scattered from the chamber very quickly, particularly the gentleman from Jonquiere who puts on a very brave front. He is probably still within the hearing of my voice and I want to say to him before he disappears altogether that I admire him for his ability to put on a brave front. I caution him, however, that he ought not to carry that too far because nobody is believing the Tory line on this issue. This Bill C-28 is a disaster from the word go, and the less he talks for the record, the better

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for him down the road, assuming he has a place down the road.
I want to come just for a moment, to the gentleman from Edmonton Northwest because I found what he had to say to be among the more interesting, if incredible things, said in this debate thus far. I watched him single-handedly bear that public debt for all of Canada and my heart went out to him, that this young man, as virile as he is, should have to carry alone that load of many millions and billions of dollars, carrying it all by himself.
I would like to ask him where he was last November when his Prime Minister and his Minister of Finance were out campaigning, completely ignoring any possibility that there might be a debt load or that it might be crippling the country as we are now being told and, instead, were promising all kinds of things in the billions of dollars. When they were confronted with the possibility that maybe this would cost a few dollars or this might only be election time promises which would be forgotten after, we remember the immortal words of the gentleman who was the Minister of Finance: "These are not even promises, these are spending commitments. We are going to do these because it is within our budgetary framework and our fiscal ability to do them".
That was in November. Now it is the following October. It is hardly a year since and what are we told now? We are told that this nation is grinding to a halt because of the debt. Well, which is it? Is it in good shape as he told us last November, or do we have to attack seniors and families now to claw back every last cent we can to save us from grinding to a halt completely as a country? Which is it? Is it the story we were told last November that everything was hunky-dory or is it the story we are being told now by the gentleman from Edmonton Northwest, he who carried single-handedly that great debt on his own very shoulders this morning?
If they want to be able to meet their spending commitments, as the minister characterized them last fall, if they want to find a few shekels to better finance the public debt, let them do something that is completely within their power, without attacking the widows and the seniors of this country, without clawing back money that
people have come to regard as part of their entitlement right back to the 1970s, as the other gentleman from Edmonton Southeast so rightly pointed out just now.
People in the 1970s made certain investments and they ought to be able to count on the return on those investments now in 1989 and years down the road. My point a moment ago was this, if they want to find a few shekels to better finance the public debt, let them do something that is within their power to do. Let them lower the interest rate one-half point or a point. Why is it that in every other matter, we have to be cheek by jowl with the Americans, but on the matter of interest rates, we have to be four points ahead of them?
If they want to ease the public debt situation, the ability to meet payments, they can cut down the payments substantially by lowering the interest rate. They would, in the process, not only eliminate a lot of pain for the government but for a lot of people who are suffering under this high interest rate inflicted by this government or aided and abetted by this government at the very least.
Now the gentleman from Edmonton Northwest also talked about fairness. In courtesy to him, I did not completely laugh out loud, but when he talks about this issue in terms of fairness, he might as well also try and tell us, yes, that Dracula is really a nice fellow.
Old age security is now a fair system. Anybody who tampers with it, as this bill would do, cannot in the same mouthful pretend that he is doing it in the interest of fairness. There is nothing fair about this exercise whatsoever.
This claw-back of family allowance and pensions-we should see it for what it is-is simply and despicably a foot in the door approach. This is just the beginning. Seniors realize this and that is why we are beginning to hear from them again on this particular issue. They saved the issue the first time around when the Prime Minister went back on his now famous sacred trust commitment. In 1985 he tried to go back on it and the seniors saved it. I am depending on them again to save it this time.
They are already mobilizing the so-called grey power out there. They are mobilizing, bless their hearts, and they are going to save the day for us on this one because they see it for what it is. It is not just a claw-back on

incomes of $50,000 and over, no, it is more than that. It is the foot in the door.
What guarantee do they have, they ask me as I travel around this country, that the $50,000 will not be $45,000 and then will not be $40,000 in another year. Of course, with inflation and the ever increasing cost of living, $50,000, even if it were frozen there, will not be worth quite what it is now a few years down the road.
What guarantee do my people in Belleoram, Beaubois and Barachois Brook have that the $50,000 will not be $40,000? I am delighted to mention Belleoram because I see right in front of me the gentleman from Labrador who had the good sense to be born in Belleoram.
Why then are the Tories doing this? Why this bill at all, why the claw-back? What is this all about? I submit to you, Mr. Speaker, that like almost everything we are seeing in the House these days, whether it is VIA Rail or the sabotaging of job creation programs or the UI changes or the GST or the ruling yesterday on the west coast fishery, it is all part of the same right wing agenda, it is all part of the same kotowing strategy with the Americans.
Do not forget that the Prime Minister's curriculum vitae basically is that of being a branch plant manager for an American multinational. He really never stopped being that when he became the Prime Minister. Instead, he just set about making the country a branch plant operation. We see it here, as insidious as it is, it is here too.
He is aware, and it has been pointed out to him many times, that our social programs, medicare, family allowance and old age security net are much more adequate here than in the United States. The senior who lives in Michigan has not the same support system as the senior in Manitoba. The senior who lives in New Hampshire has not the same support system from the public purse as does the senior who lives in Newfoundland.
It is all part of the old level field commitment that the Prime Minister made to the Americans. "Give me time", he said in effect, "Give me time and I will beat my crowd down to your level. My medicare, my pension, my family allowance will be as measly as yours if you give me time to work on it". This bill is just the latest cowardly
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manifestation of that gentleman's agenda, an agenda that will reduce us to a branch plant, a shadow, if you like, of what is happening in the United States.
There are a thousand other reasons which I will not go into because I gave the Chair a commitment that I would finish in 10 minutes to allow some others to speak. I thank you, Sir, for your indulgence. I feel strongly about this issue and I urge my colleagues to vote against it for the sake of the seniors across the country.


Mr. Jordan:: Mr. Speaker, I would like to congratulate my colleague for another display of great oratorical skills for which he has become famous. I have a simple question. I know there is no point in presenting this to members opposite; I would not get the answer.
This new tax was supposed to be up front. To me a primary way of having something up front would be having it visible on the sales slip. I understand this will not be on the sales slip. It is hard to believe that every speech we have heard this morning from the opposite side of the House seems to suggest that this is going to be implemented to reduce the deficit. It was supposed to be revenue neutral, but now it is obvious that that cause has been abandoned. It was supposed to be simple, but I can tell you, Sir, that any small businessman is going to be driven completely around the bend on this one.
I wonder if my colleague would care to comment on those three basic, simple rules which were supposed to be held in place but have been totally abandoned.


Roger Simmons: Mr. Speaker, I want to thank my colleague for Leeds-Grenville. He is so right, of course. Whether we are talking about the clawback on pensions and family allowance or about the goods and services tax, we can see the same pattern. The pattern is one of smoke and mirrors. It is one of we will say we are doing this, while we are really doing that-we will say to pensioners in 1984 that we would never, never tamper with old age pensions and then in the spring of 1985 we will go out and try to do it; we will say to the voters in the fall of 1988 that if we ever have a goods and services tax, I assure you it will be revenue neutral and it will be visible on the sales slip. Then a few months later when push comes to shove, when it comes time to get the

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legislation before the House, all the talk of visibility is gone, all the talk of being revenue neutral is gone.
We will say to voters when we are looking for their votes in 1984 that we will not only protect and preserve VIA Rail, we will enhance it; but when it comes to the crunch in 1989 of course we will do the exact opposite.
The Prime Minister will say here in the House that we are fighting to save VIA Rail. When we get to Hong Kong we will have a slip of the tongue and we will tell the truth, say we are getting rid of VIA Rail back in Canada. We will say to people in 1984 on the television debate: "Is not patronage awfully shocking?" Then, we will get aboard the plane with the press boys and let our hair down and say: "I would do the same thing if I were there at the time".
That is what we are dealing with-unabashed, bare faced hypocrisy. We cannot believe a word the Prime Minister tells us. We cannot believe a word the Minister of Finance tells us on THIS issue, and that is what makes this bill on clawback so frightening. Even as dastardly as this reality is, we never know if this is only half the punch we are going to get because we never know what this crowd is going to come up with next.


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated. Before I recognize the next speaker, may I ask the hon. member for Mission- Coquitlam whether her speech will be a 20-minute or a 10-minute one.


Ms. Langan:: It will be 20 minutes, Mr. Speaker.


The Acting Speaker (Mr. Paproski):: Then I will have to recognize the hon. member for Nepean, and following her I will recognize the hon. member for Mission-Coquitlam.


Mrs. Beryl Gaffney (Nepean):: Mr. Speaker, I am very grateful for the chance to rise today and speak on Bill C-28, an act to amend the Income Tax Act and the Old Age Security Act. There are 59 different amendments to the Income Tkx Act and I could not possibly discuss them in the time allotted. Hence, I will confine my comments to the way in which this government has dealt with the senior citizens of this country.
The clawback proposal puts a special tax on our senior citizens, a tax that does not apply to anyone else in this
country. In this way the clawback is anti-senior. I am one who feels that the senior citizens in our country deserve our utmost respect. This government's proposed clawback are the ultimate signs of disrespect.
Beginning in the fiscal year 1990-91 the government will effectively end universality of social benefits in Canada. People who bought and paid for old age securities in the years before 1971 were assured by the House of Commons in debate, when tax reform went through in 1971, that they would continue to be entitled to old age security.
Income Security for Canadians, a document put out in 1970 by the Department of National Health and Welfare and the Hon. John Munro, promised seniors in this country that any payments they were to make into old age security were theirs.
Today we are hearing that in a couple of years from now no longer will those same seniors be allowed to keep the money that they paid in so that they could look after themselves in their old age. Now these same senior citizens are finding that rather than the government looking after them they have to look after the government. This is an absolutely disgraceful situation.
In 1984 the Prime Minister said that social programs were a sacred trust, never to be tampered with. Well, he lied. And those same seniors told him he lied, right here on Parliament Hill. I say that we Canadians are beginning to realize just how loose the government is with the word "trust". We Canadians are beginning to realize just how little we can trust this government.
This government's proposed clawback of old age security is just one example of many showing how this government does not have the best interests of Canadians at heart.


The Acting Speaker (Mr. Paproski):: May I ask the hon. member to repeat. Did the hon. member say that the Prime Minister lied? Did she indicate that in her speech? If she did then she knows what she must do.


Beryl Gaffney: I am sorry, Mr. Speaker, I will withdraw the comment. The proposed clawback will tax the benefits of old age pensions at a rate of 15 per cent of an individual's net income over $50,000, rising to 100 per cent for incomes reaching $76,000. The government says that this will affect only 4.3 per cent of seniors.
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As I pointed out in the Nepean Clarion, this is but the tip of the iceberg. Because the $50,000 threshold is to rise at a rate of 3 per cent less than inflation, clawback will start at $36,000 by the year 2000, and in 20 years it will start at $28,000 and affect 2 million Canadians.
These same Canadians were the ones who did without in their early years when their children were small. They did not take the trip to the southern climate. They did not buy the new car. They put that money away. These were ordinary people on an average income who were saving for the day when they could take that holiday or purchase that new car, and now that money has to be given back to the government. It is their money.
In an August 1989 article in The Voice, a bulletin by the Canadian Seniors Network, the whole concept of the clawback is summed up perfectly. The article reads:
The finance minister argues that since everyone receives a cheque
the program is still universal, but if you give someone a cheque and
take it back a year later that is no more than a short-term loan.
How right they are; a short-term loan. What a disgusting sign of respect for our seniors. Unfortunately the government has refused to take into consideration the recommendations made by the people, and as far as the government is concerned the people do not matter.
Senior citizens in this country have played an integral part in the building of this nation. They have toiled to make Canada the greatest nation on earth. Yet, what does our present government do to show its appreciation? It strips those same senior citizens of everything they have worked for. This government has spit in the collective face of our senior citizen population.
Last year during the election the Prime Minister of this country made repeated promises to keep these benefits for the elderly when he said: "As long as I am the Prime Minister of Canada social benefits, especially those for the elderly, will be improved, not diminished by our government." The Prime Minister of this country made that statement.
I suppose the Prime Minister thinks that clawing back money from our seniors is an improvement in their welfare. What other kinds of mixed up ideas is this government going to introduce? It slashes VIA Rail by 51 per cent and claims to be saving it. It proposes a tax
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that is supposedly revenue neutral, yet it will raise $24 billion in 1991. Scary proposals.
The clawback to the seniors of this country strikes a severe blow to the programs. It cuts at the quick of Canadian universality, the universality that has been a unifying force in our country, a country that prides herself in being the most successful in the world in taking care of her citizens.
This government has been undermining that approach. It has increased the gap between the haves and the have nots, between the young and the old. It is imperative that this government listen to Canadian citizens and eliminate the clawback.
I would like to quote from Robert Choquette of the French Canadian Academy. I think that he put it extremely well when he wrote:
It excites me when I think of millions of men and women-different from me and different from one another in origin, language, culture, history and tradition-who, too, think of Canada as their country. And I love the thought that everyone, or almost everyone, has always wanted her to be greater still, more beautiful, more confident of herself and her destiny. Those who discovered Canada felt that way. So did those who came later and toiled to develop the broad expanse waiting for plough and people. So did those who continue to arrive on her shores-because they have faith in her, because for them and for their children, Canada represents security and freedom and is the best answer to their hopes.
We must strengthen that security, not diminish it as this government and this bill are attempting to do.


Joy Langan: Mr. Speaker, I would like to open my remarks by suggesting that the hon. member for LaSalle-Emard and the other hon. members in this room might like to talk to Stanley Knowles about the struggle and the fight for pensions in this country. They should think about the history of pensions in this country and they should think about why we have universality in this country. These are all major improvements. Universality in this country took place only after a minority government was forced by New Democrats to introduce it.
I would like to think about the year 1926 when Mackenzie King introduced a pension plan, $20 a month with a means test. If a senior had any savings at all, no pension. I would suggest that the Tory government today is following in that Liberal tradition and moving us back to the means test, back to the kind of pension that you get if you happen to meet a means test. I think hon. members in this room have expressed their respect for

Government Orders
Stanley Knowles and those who went before him by naming him, after 40 years of dedicated service and a sustained fight for good pensions in this country, an honorary officer of the Chamber with a seat at the table.
This legislation flies in the face of that parliamentary struggle, that parliamentary tradition, for which Stanley Knowles stands. This legislation with a claw in the door is a clawback on universality not only in pensions but in family allowances. The hon. Minister of State for Employment and Immigration and Minister of State for Seniors, in the question and comment period, talked about talking to seniors' groups which agree with this legislation. Yet when I challenged that statement last spring and asked the minister to name one, she was unable to do so.
I named in a statement in this House a long list of seniors' groups which oppose this clawback, and I would hope that before this legislation is indeed passed into law, sadly, that the hon. Minister of State for Employment and Immigration and Minister of State for Seniors could give us a list of the seniors groups which indeed support this legislation.
Last spring when this budget was introduced I was so alarmed by what the inference of the clawbacks was that I asked the Minister of Finance to explain to us whether he believed that, while 4 per cent of people have their pensions clawed back today, it is acceptable that in 20 years 25 per cent of people will have their pensions clawed back. His response was that the government would be reviewing the situation and that "we are acting when it is appropriate".
I would suggest that today, based on this legislation, we are indeed reviewing pension programs. In this instance the review is a backward step, a nasty step, a grabby step, and a step that should put all seniors in this country on their guard that their pensions will be continually eroded.
I asked the Minister of Finance, if we are talking about a vague review, how do we as Canadians know which way he is going to review it? The clawback that is being proposed is like quicksand into which more and more elderly Canadians are about to sink.
My question was: Is it acceptable to the minister that in 20 years one in four Canadians would be caught in that quicksand? His response was: "No, it is not acceptable". Yet the projection based on this legislation is that it is what we will be facing 20 years hence.
The hon. member from Edmonton Northwest said during the question and comments that obviously having a $50,000 a year income meant that one was operating with a substantial tax base and a substantial income base. Yes, indeed it does today, but the projections again show that by tomorrow-tomorrow meaning 20 to 25 years from now-we will be faced with over a million Canadians who are eligible today for old age pensions, who would not be eligible under this proposal.
I was so concerned about this-not only from the point of view that over a million Canadians would be faced with this in 20 years but also from the point of view of a two tier system or a breach of the universality to which Canada is committed-that I went to the Library of Parliament and asked if indeed under the Canadian Charter of Rights and Freedoms this piece of legislation would be acceptable.
The letter I received back from the Library of Parliament quoted subsection 15(1) of the Charter which reads:
Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental and physical disability.
The letter that I received back went on to say:
It is possible to argue that a separate system of taxation for Canadians aged 65 and over is discrimination based on age as one segment of the population would be treated differently from the rest, solely on the basis of age. However, there is an argument to be made that even if such a system is discriminatory it is justified.
I would expect that the government based on the legislation it has introduced would be trying to argue that this is justified under the Charter of Rights and Freedoms. Many Canadians and I believe that the Charter is very, very clear and very explicit on this point.
Proponents of the budget could argue that the purpose of old age security payments is to assist lower income Canadians. The whole basis on which our Canadian pension system is based is that it is there for all Canadians when they reach a certain age. It has nothing

to do with what their income is. With a progressive tax system, those who earn enough would be paying their fair share of taxes in an equitable way and those who are not would receive the full benefit of the pension.
Many of the speakers today have referred to the comments by the chairman of the finance committee about seniors. He said that they live at a slower pace and they do not spend money in the same sense that you and I do. Well, I guess if you do not have as much money as Members of Parliament have, you do not spend as much. He said that older people do not wear out their clothes. Is there some magic fabric that older people have in their clothes so that the clothes do not wear out? He said they do not wear out their furniture. Do older people have some kind of levitation that they do not actually sit on the furniture when they are sitting down, Mr. Speaker? Of course older people wear out their clothes, of course their furniture wears out. The difference is that older people do not have the disposable incomes that you and I have to replace those things so they do not spend as much money. I think it is absolutely shameful that a Member of Parliament should flaunt his good fortune at the expense of the seniors in our country, belittle them and suggest that their needs are not as great because they have achieved a certain age.
The Tory government knows that seniors, because of the very fact that their incomes are less, do not have the means to fight back. However, they have the network and they put that network together in 1984. But, Mr. Speaker, it is hardly fair that the seniors in this country should have to fight the same fight every four years. I would suggest that the government ought to rethink its introduction of this legislation and rethink the kinds of commitments it has made during election periods to the seniors of this country.
I would like to talk for a couple of minutes about how the clawback is really going to work. A worker earning $40,000 a year today and watching his or her income rise with inflation would be earning enough by the time he or she retired to be caught in the clawback for both pensions and family allowance.
Government Orders
For retirees the clawback is more complex, it phases in more slowly,, but a simple rule of thumb is that a worker who earns at his or her age, say a 28 year old worker earning $28,000 or the average industrial wage, will be hit by the clawback by the time he or she retires. This assumes that incomes keep pace with inflation and that retirement income is 70 per cent of pre-retirement income.
If the government is successful, through the free trade deal and other economic factors in keeping workers' wages well behind inflation, then I would suggest that possibly as many pensioners as I am predicting will not be caught in the clawback. But that may suggest yet another piece of the over-all agenda of this government when it comes to working people, retired people, women and children and, in particular, those who are disadvantaged.
The implication is that the clawback of these social benefits will hit average income earners, not just the rich, in a very few years. Average Canadians will lose the benefits of the social programs that make us distinct from the U.S. More and more of our social programs will become poorer and poorer and more targeted and available only to those considered to be in need.
I suggest it is a very, very clever strategy on the part of this government to introduce this legislation by going after those who earn $50,000 or more. Of course we all say people who earn $50,000 or more should be paying taxes. But what the government does not say is how that projects, and who is next, and who is next and who is next. I would suggest that it is the same kind of philosophy that introduces amendments to the unemployment insurance bill, the inference of which is that we must change this, we must get those lazy people to work one or two more weeks before they go on to this program, and that most workers indeed somehow fiddle the system.
It is very clever strategy. It is strategy designed to bring out the worst in all of us, to bring out that in us which says, "I am working hard, why is he or she not?", without ever putting ourselves into his or her boots. I would suggest that these clawbacks on the pensions and the family allowance indeed are indicative of the kinds of over-all policy which the government has.

October 17, 1989
On family allowances, the proportion of families affected by the clawback will be more than double in 10 years. On old age security, the Minister of Finance likes to point out that his clawback will affect only 4 per cent of seniors. I repeat that in 10 years the number of pensioners seeing at least part of their old age pension clawed back will be one in 12, or 30,000, and in 20 years it will be one in four, or one million pensioners.
I think there are some fundamental questions that must be asked about this legislation which Canadians will be asking. They will be asking, why should an individual be entitled to receive $100,000 in capital gains, tax free, but lose the $4,000 he or she gets in old age security simply because it was paid as a universal social benefit? About family allowances and old age security, Canadians will be asking why the government is introducing a new tax when they are already taxed. Why should a special tax be levied on children and on the elderly?


Peter Andrew Stewart Milliken: They are vulnerable.


Joy Langan: They are vulnerable. That is exactly why.
Canadians will be asking if the intention is to raise money from the rich, why not do it through a more progressive tax system instead of a super tax on children and a super tax on seniors? Why not raise marginal rates at the top to 32 per cent instead of taxing back family allowance and old age security?
Canadians will be asking what will the unique identity of Canada be in a few years when our social programs exist to serve only those in need? Will our social programs not be just like those in the U.S.-leaner and meaner, as all means-tested programs are?
Canadians will be asking how long will the population support the maintenance of social programs from which they are effectively excluded as beneficiaries? Canadians will also be asking will need be redefined downwards as it has been in Britain and in the U.S. and as it has already been with our UI program and other welfare programs?
Many hon. members before me have quoted the Prime Minister's comments on CP wire on March 7 when he said: "Our position is simple and straightforward. We are in favour of universality in social programs and it shall not be touched". Another remark, almost equally as famous, made on October 15 in Summerside, P.E.I., was
"As long as I am Prime Minister of Canada social benefits, especially those for the elderly, will be improved, not diminished by our government".
Has the Prime Minister lost control? Has he lost control of the government? I wanted to believe him. The pensioners and the parents in this country wanted to believe him. They even were willing to believe him after the 1984 election when he attempted to mess around with the pension program. But I suggest that although Canadians have now given him a second chance, a third is not likely because actions speak louder than words and this government's actions have very clearly demonstrated that the things the Prime Minister said mean nothing.


The Acting Speaker (Mr. Paproski):: When we return after three o'clock, the hon. member will have 10 minutes for questions and comments.
It being one o'clock I do now leave the chair until two o'clock this day.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.

Mr. George S. Rideout (Moncton):: Mr. Speaker, I want to raise the concerns of the citizens of Newcastle, New Brunswick and in fact all New Brunswickers who are in a state of panic due to the series of violent deaths which have occurred there in the last few months.
These crimes have been most violent and most heinous. I understand the RCMP has assumed control of the investigation of these murders, but on the basis of the information that I have been given the RCMP has been extremely short staffed in New Brunswick due in part to its new peacekeeping role.
I am further advised that some members of the force who have an intimate knowledge of Newcastle, New Brunswick have not been utilized in the investigation due to the lack of available personnel.

I urge the minister to commit the additional staff necessary to carry out a full, complete and expeditious investigation immediately.


THE ENVIRONMENT
Mr. Stan Wilbee (Delta):: Mr. Speaker, I am delighted with the appearance of the blue recycling boxes provided to all our offices in the House. However, I do believe that it would be much better if much of the material placed in the baskets was never produced at all.
In this time of severe budget deficits I call on every government department and agency to determine if their printed material is absolutely essential.
I believe we could all help save money, paper, the forests and energy by reducing the paper load produced by all levels of government. By doing so we can help reduce the threat to our increasingly fragile environment in a very practical way, as well as help solve our deficit problem.
*	* He


EAST TIMOR
Mr. Bill Blaikie (Winnipeg TVanscona):: Mr. Speaker, one of the items that is always on the agenda of Commonwealth parliamentary meetings, and indeed when leaders of the Commonwealth get together, is the whole concern with respect to further decolonization.
What I would like to do today is call on the Prime Minister, while he is in that part of the world in Kuala Lumpur, to change the Canadian policy with respect to the colonization of East Timor by Indonesia, something which happened in the mid-1970s and about which Canada has been embarrassingly silent out of respect for our economic interests in Indonesia. I think it is time that this sort of thing came to an end. If we are against illegal occupation of one country by another, if we are, indeed, against genocide, as it has sometimes been called in East Timor, we ought to be against it in every case.
The Canadian record with respect to the Indonesian occupation of East Timor has been a disgrace. I call on the Prime Minister at this point to change Canadian policy, to denounce colonization and terror and genocide
wherever it occurs, and particularly at this time in East Timor.


NATIONAL UNIVERSITIES WEEK
Mrs. Suzanne Duplessis (Parliamentary Secretary to Minister of State (Science and Technology)):: Mr. Speaker, last Wednesday, I had the honour, with the Minister of State for Science and Technology (Mr. Winegard), to give out federal scholarships to university students of the Ottawa-Hull area to launch National Universities Week. This year, 3,400 two-thousand-dollar-scholarships will be granted to students across the country in science and technology related fields; 51 per cent of the recipients are women. These students will have a role to play in the future of our country since they will be tomorrow's researchers and as such, will help Canada compete in the world market. On behalf of the government and myself, I wish to congratulate the recipients and wish them the best of luck in their studies.


EDUCATION
Mr. Ronald J. Duhamel (St. Boniface):: Mr. Speaker, the Prime Minister has told Canadians of the importance of our education system, how it will determine our competitiveness in the world, and how we must ensure first-class education for Canadians.
Despite the Prime Minister's rhetoric, the Conservative record on education is shameful. There have been deep cuts in transfer payments. There have been reductions to training and retraining programs. There have been no increases in student aid amounts. The application of the goods and services tax will include books and other learning materials. There has been embarrassingly little support for literacy.
There has been the capping of funds for the post-secondary education of natives, the elimination of the postal subsidies for scholarly journals, and the abolition of the citizenship instruction and language textbook agreement.
On Friday, October 13, I held a press conference at which I announced a challenge to the government and its ministers to discuss and debate these issues with me

October 17, 1989
across the country. Canadians want these discussions. Will these ministers participate?


NATIONAL INFECTION CONTROL WEEK
Mr. Bruce Halliday (Oxford):: Mr. Speaker, I am pleased to announce that this week, October 16 to October 20, has been proclaimed National Infection Control Week in recognition of the many health care professionals who have worked to prevent the transmission of infectious diseases in health care facilities and community based institutions.
The purpose of this week is to focus public and professional attention on both the seriousness of nosocomial and community infections and on the measures that can be taken to reduce them. I particularly applaud the efforts of the community and hospital infection control association in Canada for their efforts in sponsoring and organizing this week across Canada.
Nurses, doctors and other health care workers have long been aware of the problem and of the need for wider application of the effective infection control measures. Scientific evidence has shown that simple measures such as proper hand washing when used by everyone can reduce the spread of infection. Infection control practitioners, community health agencies and others are invited and encouraged to join CHICA Canada in promoting activities which will enhance infection control.


SOUTH AFRICA
Mr. Howard McCurdy (Windsor-St. Clair):: Mr. Speaker, it is said that a man selling doughnuts will boast about the size of the doughnuts, but the customer will consider the size of the hole.
This should be remembered when the Prime Minister tries to sell us a claim of victory for Canada's sanctions against South Africa. The hole is a big hole-the 80 per cent increase in Canada's trade with South Africa and Canada's resistance to supporting stronger sanctions.
South Africa's new velvet glove and the release of prisoners could be nicely timed to strengthen Thatcher's hand and weaken Canada's already timorous resolve at the Commonwealth Conference.
De Klerk may be simply a good card player. The Prime Minister should remember what Kenny Rogers sang: "Don't count your money while you're sitting at the table. There'll be time enough for counting when the deal is done".


HERITAGE
Mr. Charles DeBlois (Montmorency-Orleans):: Mr. Speaker, last night the Saint-Ferreol-les-Neiges Development Corporation received the Alphonse Desjardins Prize in the "Culture and Heritage" category. The Desjardins Movement thus recognized the remarkable work done by the Corporation to develop the site of the Sept-Chutes hydro-electric plant, a heritage and environmental location that nearly 50,000 people visited this summer.
Like my fellow citizens, I am very proud of this recognition because, as Corporation President Germain Tremblay said, the Government of Canada got the project going. Since 1984, our Government has spent nearly $450,000 through employment programs in Sept-Chutes.
I would like to pay tribute today to Germain Tremblay, Jean-Guy Huot, Claire Boulay and all their team for their wonderful work and I encourage them to continue for the people of Saint-Ferreol-les-Neiges and the riding of Montmorency-Orleans.


NATIONAL UNIVERSITIES WEEK
Ms. Catherine Callbeck (Malpeque):: Mr. Speaker, this week is National Universities Week when we celebrate all the great things our universities do for their community, their province and their country.
The University of Prince Edward Island contributes greatly to my province and, with its new vet college, to Atlantic Canada as well. The continuing presence of the University of Prince Edward Island allows young men and women in the province to get a high quality education. A well educated workforce allows Prince Edward Island to develop as a province and to reduce its dependency on the federal government.
October 17, 1989

But by cutting funding to the provinces and to students, the federal government is condemning provinces like Prince Edward Island to a future of dependency and students to a future of debt. Education is a top priority for Islanders and I urge this government to show that it is a priority for it as well.


PROPOSED GOODS AND SERVICES TAX
[Stage Direction]
Mr. John A. MacDougall (Timiskaming) Mr. Speaker, in its submission to the House of Commons Standing Committee on Finance, the Mining Association of Canada made it known to the government that the membership supports the introduction of the GST.
Speaking for the mining community, this association sees that the new GST as a good measure. The bottom line is that mining industries which depend on the exporting of their products will benefit from the tax reforms put forward by this government.
MAC favours our tax policies because they ensure that the burden of taxes and the royalties is consistent with that in other industrialized, mineral producing countries; that taxes do not discriminate against Canadian exporters and in favour of importers; that the cost of tax compliance for industry and of administration by governments are kept reasonably low.
MAC recognizes that today's tax reform decisions made by the federal government will affect the health of the Canadian mining industry tomorrow. Its concern and our concern is to see the goods and services tax implemented and our current tax policies corrected, for the betterment of the mining sector and of individuals across Canada.

Beryl Gaffney: Mr. Speaker, almost five years ago the National Capital Commission announced plans and issued a contract to redevelop the Daly Building located at Sussex and Rideau Street here in Ottawa. Incredibly the start of construction on the 84-year old building is still months away.
The loss of revenue alone from tenants who should have been in the building long ago is staggering. I cannot even begin to estimate how many potential millions have been lost. I understand that problems have arisen, but for a government which claims to be the champion of fiscal restraint it is only the proving yet again that it is only the champion of rhetoric and overspending.
This fiasco must be stopped. Someone has got to put his or her foot down and take charge of the situation. I suggest that the Minister of Public Works do this. Enough time has been spent; enough money has been squandered. The NCC should put its helmets on and get into the game.
It is high time construction began so the job can be finished and we can begin making, instead of foolishly wasting, taxpayers' money.


TAX REFORM
Mr. Pat Sobeski (Cambridge):: Mr. Speaker, no one likes taxes any less than I do. I know that a large number of Canadians has already made important sacrifices to help keep the deficit under control. Together taxpayers and this government have made progress, but we still have some way to go.
The first part of sales tax reform is to remove the existing federal tax on manufactured goods. Many Canadians are unaware that since 1924 the federal sales tax has been buried in the price of every good and service produced in Canada and consumed by all Canadians. It taxes foreign made imports one-third less than it does Canadian domestically made products.
What sane country would allow such an arrangement to continue at the age of 65. It is time for the MST to retire. Then and only then will we establish the goods and services tax.
Under the GST Canadian exporters will create new jobs. Economic growth will improve living standards and contribute to bringing the deficit down.
I ask you to think about the entire package. The bad old tax out, the GST in, together with all the important fairness measures.

October 17, 1989


PETROLEUM INDUSTRY
Mr. Steve Rutland (Sault Ste. Marie):: Mr. Speaker, last week I spoke of the ill effects of deregulation on northern Canadian communities with specific reference to skyrocketing air fares.
This week I learned that American aviation fuel is being shipped from Michigan into Canada to service Canadian aircraft, namely, Air Ontario.
If this is an isolated case-and I believe it is not-Canadian jobs are at risk for those involved in the petroleum industry. Why would Air Ontario do this? The vice-president tells me that it is to cut costs.
Pass it on to the consumers? No way. To add insult to injury and at the expense of safety, our harmonious laws permit Canadian A-l fuel to be replaced with American A fuel. The difference is simple but frightening. American fuel freezes at minus 40 degrees; Canadian fuel freezes at minus 47 degrees. What is the supposed solution? Put in an additive just like we do in our cars.
Canadians should not have to accept American fuel nor American standards. I ask the Minister to investigate this unacceptable situation immediately.


POLLUTION CONTROL
Mr. Jean-Marc Robitaille (Terrebonne):: Mr. Speaker, yesterday, at a press conference, the Minister of the Environment announced that the federal Government intends to spend $150 million in pollution control projects, including $100 million to clean up some 50 hazardous waste disposal sites for which the owner is unknown, cannot be found or is bankrupt.
Mr. Speaker, this announcement by the Environment Minister is very important for the people of my riding, especially in Mascouche. The Mascouche disposal site was given as an example in reports on the TVA network last night. I can tell you, Mr. Speaker, that my constituents are pleased with this decision, this announcement because it is a step forward; it is concrete action for environmental quality and for future generations.
I want to tell the Minister of the Environment and the House that I am fully satisfied with this announcement and I hope that the provinces will follow along at the Environment Minister's Conference this week in Charlottetown.
As for our friends opposite, who reacted to this announcement by saying it was too little too late, I will just tell them that for me and the people I represent, it is never too late and that it is much more than they did when they were able to do something.


HOUSING
Paul Edgar Philippe Martin: Mr. Speaker, the Liberal task force on housing, co-chaired by the Hon. Member for London East finished its cross-Canada tour of nine cities yesterday.
Nearly 70 associations submitted briefs to the task force, and it was apparent that all regions in Canada, without exception, were experiencing severe housing problems.
Whether we are talking about availability, access, the homeless or the fact that it is becoming increasingly difficult for Canadians to enjoy a right that should be theirs as a matter of course, we cannot ignore these problems.

It is unacceptable in a country such as ours that there are 1.3 million families living in unsustainable housing.
Since taking office the Conservative government has drastically cut budgets and programs. It has abandoned its responsibilities and has generally turned a blind eye to Canada's housing crisis. The new sales tax is clear evidence of this. It has made a very bad situation all the worse.

From our hearings across the country it was apparent that there is no federal leadership in this area today.

Lack of decent housing is a root cause of poverty. You may rest assured that it will be a principal focus of our report.



October 17, 1989


ABORTION
Mr. Gus Mitges (Bruce-Grey):: Mr. Speaker, I would like to put on record a short letter from Mrs. D. Simons of Orleans, Ontario, concerning abortion:
I'm ashamed to be a woman. I'm disheartened by how irresponsible, cold-hearted, and extremely selfish we have become. Led by the "women's movement", we have convinced ourselves we are not the loving, caring, nurturing beings we are by nature. We have convinced ourselves that the child in the womb is not a person worthy of respect. Were we not all a foetus in our mother's womb? Are we not the same persons we were then?
No matter how bad a woman's situation may be, she can survive, and help is there for the asking.
Mrs. Simons went on to say:
Most abortions, however, are done because the pregnancy is an embarrassment or inconvenience. Is nine months really too much to give for the life of another? Is killing your baby better than giving her to a couple who will love her as their own? Give the baby a "choice" and I'm sure she will choose life.
She concluded by saying:
I beg women to find courage to take responsibility for their actions and not take the easy way out.



ORAL QUESTION PERIOD


Right Hon. John N. Tbraer (Leader of the Opposition):: Mr. Speaker, my question is for the Minister of Fisheries and Oceans about the decision of the trade panel on salmon and herring.
According to the joint statement by the Minister of Fisheries and the Minister for International Trade, and I want to quote that statement:
The Panel has accepted the legitimacy of Canada's position -the Panel has fully recognized that it is the sovereign right of Canada to decide on particular conservation policies-
So said the minister. I do not know what decision of the panel the minister has been reading. I read it carefully this morning. My copy states: "The present Canadian landing requirement cannot be said to be primarily aimed at conservation. Therefore, Canada's landing requirement is incompatible with Canada's obligations under Article 407 of the trade agreement".
Oral Questions
Does the minister have a different decision than the one that was issued by the panel, or is he relying solely on the opinion of his colleague, the Minister for International Trade who admitted to this House that he had not read the trade agreement under which the decision was made?
Having signed the deal and set up the process under which the west coast fisheries industry has now lost an important decision, why does the minister not have the courage to admit it to the fishermen of British Columbia and the country that his government blew the whole damn affair?


Hon. Thomas Siddon (Minister of Fisheries and Oceans):: Mr. Speaker, I am pleased to answer the hon. Leader of the Opposition. The panel clearly upholds the sovereignty of Canada's fisheries legislation in giving to the Government of Canada and the Minister of Fisheries the authority in the final analysis to set quotas and to establish regulations from the perspective of conservation of this resource.
If the hon. member had properly read the completion of the panel finding which Canada, by the way, has not yet accepted-we have 30 days to review this question.


Mr. Axworthy (Winnipeg South Centre):: It is not that
good.


Thomas Edward Siddon: I would ask the hon. Leader of the Opposition to read the panel report, clause 8.02 sub. 2, where it states:
The Panel was also of the view that Canada could bring its landing requirement within Article XX (g) of the GATT, by structuring it along the lines described in paragraph 7.40.
Furthermore, if the hon. member would read from page 37 of the report-I think it is important that the House have this complete clarification-let me quote:
The panel agreed with Canada's position that a state could not be obliged to make its fisheries conservation and management regime dependent on co-operation with another state.


John Napier Turner: Mr. Speaker, yesterday the minister cried "victory". Now he says he has not finally accepted the decision.


Some Hon. Members:: Oh, oh!

October 17, 1989
Oral Questions


John Napier Turner: If you read the trade agreement with the United States, Articles 407 anJ 408, you will know why we lost. We gave up our right to impose an export tax which would have allowed-

Mr. Speaker, under the Free Trade Agreement, Canada, as I said just now in English, gave up its right to impose an export tax on raw fish. That is the reason for this Government's present problems. Before the FTA, Canada would have been able to take steps to protect the thousands of fishermen in our Pacific and Atlantic fisheries. Today, however, we must abide by the decision of a free trade panel, a decision that was not in our favour.
During the election campaign, the Minister of Fisheries and Oceans promised our fishermen they would be protected under the FTA. What does the Minister have to say now to thousands of workers on both coasts who are going to lose their jobs in fish processing plants?


Thomas Edward Siddon: Mr. Speaker, the hon. Leader of the Opposition speaks of protection yet he is supposedly a free-trader having embraced the principle of adherence to the General Agreement on Tariffs and Trade-


Lloyd Axworthy: You gave up the tax, dummy.


Thomas Edward Siddon: -and, therefore, agreeing if he were, God forbid, to be leader of this government that he would accept rulings of the GATT as we did with regard to our former unacceptable and discriminatory export restrictions.
The hon. member cannot speak out of both sides of his mouth at once.


Mr. MacLellan:: Listen who is talking.


Thomas Edward Siddon: In fact, this free trade panel has adjudicated on a question of conservation and management and upheld the sovereignty of Canada in making those final decisions with regard to determining fisheries regulations and quotas, and that is a great gain for Canada.


John Napier Turner: Mr. Speaker, the minister does not yet understand that our sole remedy
under the GATT was the export tax which his government abandoned under the trade agreement with the United States. That is why we have this problem.
On November 17, 1987, in Richmond, British Columbia, when questions were put to him by union representatives and members of the industry, the minister stated categorically, and I quote: "I give you my assurance that those jobs are safe". Those were his words as he referred to the workers in the fish processing industry on the west coast.
Yesterday, his response to the same question from a journalist about the same jobs was this, and I quote him again: "It is really not appropriate that you ask such an over-simplified question and expect a categorical answer".
Well, Mr. Speaker, two years ago he guaranteed that those jobs would be saved, now he says, "don't ask me, it is too complicated".
Why did the Minister break his word or is this question too over simplified for him to answer?
Hon. Thomas Siddon (Minister of Fisheries and
Oceans): Mr. Speaker, the question is certainly over simplified coming from where it arises.


Some Hon. Members:: Oh, oh!


Thomas Edward Siddon: But I can certainly answer the question. In the free trade era we are seeing untold increases in the numbers of jobs in Canada and in British Columbia.


Some Hon. Members:: Hear, hear!


Mr. Robichaud:: Not in fisheries.


Thomas Edward Siddon: Mr. Speaker, I can also assure the House that over the past four years during which this government has presided over fisheries matters, the number of processing jobs in each year has increased over the previous one. This being a record year we have had outstanding employment in the processing sector and, in fact, if one were to break down the 60,000 jobs in British Columbia that have been established since January 1, one would find that large numbers of those jobs are in the fishing and fish processing sector.


An Hon. Member:: That sounds fishy to me.
October 17, 1989


SENATE REFORM
Lloyd Axworthy: Mr. Speaker, I have a question for the Deputy Prime Minister. Maybe the Deputy Prime Minister would recognize that last evening's election of a Senate nominee in Alberta is a very important historical step for this country. As a simple straightforward parliamentarian he would not want to hide behind obscure answers about lists of names but recognize the election as being a clear question of the will of the people being responded to by this government.
Has the Deputy Prime Minister been in touch with the Prime Minister in his sojourn overseas and can he now say that the Prime Minister will provide the assurance that the prerogative of the Prime Minister will be used clearly to appoint to the Senate the nominee who was elected last night in the province of Alberta for the Senate?


Hon. Don Mazankowski (Deputy Prime Minister, President of the Privy Council and Minister of Agriculture):: Mr. Speaker, the hon. member is aware of the process that has been established under the Meech Lake Accord. There are constitutional responsibilities that the Prime Minister has to uphold. There are also conditions that he is obligated to uphold under the provisions of the Meech Lake Accord.
The Right Hon. Leader of the Opposition asks if Mr. Getty signed the accord. The answer is, yes. I have it right here in front of me. To enlighten the hon. member in case he has not read the Meech Lake Accord, Article 2, which deals with Section 25 (1) of the Constitution, states: "Where a vacancy occurs in the Senate the government of the province to which the vacancy relates may, in relation to that vacancy, submit to the Queen's Privy Council of Canada the names of persons who may be summoned to the Senate."
Subsection 2 states: "Until an amendment to the Constitution of Canada is made in relation to the Senate pursuant to Section 41, of the Constitution Act, 1982, the person summoned to fill a vacancy in the Senate shall be chosen from among the persons whose names have been submitted under Subsection 1, by the government of the
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province to which the vacancy relates and must be acceptable to the Queen's Privy Council of Canada."
There is a clear constitutional obligation.


Mr. Lapierre:: How about the people?


John Napier Turner: How about the people of Alberta?


Donald Frank Mazankowski: There is an obligation to uphold the spirit and the letter of the Meech Lake Accord which was signed by the Premier of the Province of Alberta, Mr. Getty. The Prime Minister is fully prepared to honour his obligations and his responsibilities within that context.


Lloyd Axworthy: Mr. Speaker, I would express my disappointment in the answer of the Deputy Prime Minister because when he talks about honouring obligations, there is a much higher obligation to respond to, and that is the will of the people expressed through the ballot box. That is the highest order in this House.
I want to ask the Deputy Prime Minister specifically this in relation to that important first step taken in the province of Alberta last night in terms of Senate reform. Going back to the Deputy Prime Minister's own interest in Senate reform, will the government commit today that it will undertake a joint committee of this House, the Senate and House of Commons, to look at the mandate of the Senate and come forward with a mandate that is more equal, effective and elected than the Senate we have had up until now?
Is this government going to show its commitment to Senate reform as the people of Alberta did last night?


Donald Frank Mazankowski: Mr. Speaker, there clearly is a commitment. Part and parcel of the Meech Lake Accord was the fact that the first item on the agenda after the Meech Lake Accord was adopted-I trust that that is still the official position of the Liberal Party-


Some Hon. Members:: Oh, oh!


Donald Frank Mazankowski: -was to accept the Meech Lake Accord. I know that there are some variations in some quarters-


John Napier Turner: Are you going to stand up against the people of Alberta?

October 17, 1989
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Donald Frank Mazankowski: -but I should also remind the hon. member that it is through the Meech Lake Accord that this process was established.


John Napier Turner: That is a newy.


Donald Frank Mazankowski: So, surely, Mr. Speaker, there should be some support over there. The fact of the matter is that there is no one more-


Lloyd Axworthy: Are you
rejecting the people of Alberta?


Donald Frank Mazankowski: Mr. Speaker, if the hon. member would allow me to answer the question. There is no one more supportive of Senate reform than this government and all members from this side of the House.


Some Hon. Members:: Hear, hear!


Donald Frank Mazankowski: When I hear Liberals across the way chirping about Senate reform, let us look at what Senator Hastings says about this process. He says that, "It is a ludicrous and unconstitutional." Senator Olson says, "There is no Senate election. The Prime Minister appoints senators". Mr. Speaker, why don't they get their act together? We have ours.


Some Hon. Members:: Hear, hear!


FISHERIES
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, I have a question for the Minister of Fisheries. Yesterday we had a decision that came down clearly against the interests of the people of British Columbia, and beyond that, in terms of resource management and control, all of Canada, a decision which for the first time restricts Canada's right to set the level of a resource level in this country.
Considering that that decision has been said by representatives of the industry to be a U.S. victory; considering that it has been said by representatives of the trade unions in Canada to be a U.S. victory, and considering that it has been said by the U.S. trade representatives to be a U.S. victory, why is the minister the only man on either side of the border who has the nerve to claim that this is a Canadian victory?


Some Hon. Members:: Hear, hear!


Thomas Edward Siddon: Mr. Speaker, the hon. Leader of the New Democratic Party does not quite have his facts straight. I saw on CBC television last night a female worker on a fish plant line in British Columbia saying that this was a good deal for Canada. She was wearing the union logo.
I think it is unfair to draw conclusions at this point on the basis of a report which the government has 30 days to accept or to dispose of in one way or another. I can repeat, Mr. Speaker, to the hon. member, that on page 37 it states clearly that the panel agreed with Canada's position, that a state could not be obliged to make its fisheries conservation and management regime dependent on co-operation with another state.
That ensures that Canadian sovereignty of fisheries management as enshrined in Canadian fisheries' legislation is preserved in this panel finding.


John Edward Broadbent: Mr. Speaker, the minister knows what is at stake here. It is not simply the issue of conservation. The government gave it away and the trade deal has the right to settle the level of development of resources for industrial purposes in Canada. That is what the government gave away, and the minister knows that.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: Yesterday he was describing the decision as a victory. Today in Question Period, the minister is talking about the government taking action, presumably not to accept the decision. He cannot have it both ways. Since the people in British Columbia in particular, and representatives-leaders in industry as well as in the trade union movement-understand the decision for what it is, as threatening their jobs, will the minister now give assurances to the House that the government will exercise its right and refuse to accept this decision?


Some Hon. Members:: Hear, hear!


Thomas Edward Siddon: Mr. Speaker, the hon. member and his cohorts keep referring to this threat to jobs but they cannot produce one shred of evidence of one job that has been lost to this date in British Columbia as a result of a GATT dispute which was initiated before the General Agreement on Tariffs and Trade, and which I believe the New Democratic Party supports, because the fisheries industry is an export industry.
October 17, 1989

We depend on access to international markets to sell 80 per cent of our production. We have to play by the rules of international trade, and I believe the New Democratic Party even believes in that. So the member cannot hide behind this notion that somehow we should be able to protect jobs when, in fact, if we are going to export products we have to play by the international rules of trade.


John Edward Broadbent: Mr. Speaker, the minister talks about jobs. I urge him to check with his own officials and he will find out that there was over four million pounds of salmon exported directly to the U.S. unprocessed in Canada.
I say to the minister that that represents a lot of jobs which people in British Columbia would like to see take place in British Columbia and not in the United States.
I want to ask the minister this question and I hope he will be candid in his answer. Given the nature of this ruling with its implications, which are bad enough for British Columbia in the salmon industry, would he not agree that the implication of this decision, if the government accepts it, means that we can no longer set any restrictions on the export of raw logs, that minerals in Manitoba, Quebec and Ontario, for example, can no longer have restrictions imposed on them for development here in Canada? In short, has the minister not given away the whole capacity for us to have a regional and national industrial strategy that would stop us from being simply the hewers of wood and drawers of water for the United States?


Thomas Edward Siddon: Mr. Speaker, I presume the hon. member was wise enough to know that there is no point hewing your trees and drawing your water if you have no markets to access with the products you produce. That is the principle of trade and the reason why we must abide by the rules of international trade. That principle as to whether or not we should be able to protect jobs was decided by a GATT panel finding which Canada accepted two years ago.


John Edward Broadbent: You gave away the export tax.


Thomas Edward Siddon: Now I return to the question which the hon. member asked about jobs that were lost. In fact, we had a bonanza year in the west coast sockeye runs this year. We have been exporting raw fish in three species
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for years and years which will no longer be freely exported.
I refer the member again to page 37 of the findings of the panel which clearly upholds Canada's right to manage our fishery from the perspective of conservation of a sustainable resource.


Fernand Robichaud: Mr. Speaker, my question is also directed to the Minister of Fisheries and Oceans. We now know that the Government failed miserably in protecting jobs on the west coast. We can no longer enforce our processing regulations. We can no longer enforce our landing requirements. We have lost across the board, and this will have serious repercussions. And now for my question.
What kind of assurances can the Minister give the House that the same situation will not occur on the east coast and that we will be able to maintain our right to protect our resources and our jobs in the fisheries industry?


Thomas Edward Siddon: Mr. Speaker, I understand that the member would be inclined to draw parallels, but there is actually no comparison between the two situations that are in debate here. In fact, the Prime Minister, in this House on October 5, made it quite clear that we reject any proposed amendments to the Magnussen Act which would impede our right to access the U.S. market with lobsters harvested according to our conservation rules. In other words, the American government cannot, in an extra-territorial way, apply its conservation requirements to Canada. That principle also applies with the FTA panel finding which clearly respects Canada's right to manage and conserve our fisheries resources within Canada which is within our jurisdiction.


Fernand Robichaud: Mr. Speaker, I have a supplementary question. I do not find any assurance in the minister's words. We have given up our processing regulations and we cannot enforce our landing requirements. We have given up, under article 408 of the free trade agreement, any right that we would have to use an export tax. We have given up everything.

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What new action or process or even what new trick can the minister find to protect the jobs in the fish processing industry? What new tricks does he have up his sleeve?


Thomas Edward Siddon: Mr. Speaker, I do not recall in the debate on the GATT panel ruling about two years ago the opposition suggesting we apply an export tax on our fisheries exports. In fact, I read from the FTA panel finding which clearly recognizes Canada's right to manage our fish stocks, our salmon and herring stocks on the west coast, in accordance with our sovereign right to do so as flowing from the Law of the Sea and enshrined in Canadian legislation.
The panel report, if he will read it carefully, even provides some guidance as to how we should do that. It suggests we should be able to administer all transportation of fish from our west coast fishery, whether by land or by sea, and ensure that that right is unfettered in any way. We will do that.


SENATE REFORM
Mr. John Harvard (Winnipeg St. James):: Mr. Speaker, my question is for the Deputy Prime Minister. Today the government leader in the Senate said that in selecting Senators, a list of names must be submitted to the federal government by the province where a vacancy exists. He further stated that more than one name must be submitted in order to respect the provisions of the Meech Lake Accord.
Yesterday Albertans made their democratic choice in a Senate election. Today their premier, Mr. Getty, said that he would submit only one name that of the winning candidate in yesterday's election. Will the Deputy Prime Minister defend the democratic will of the people? Will he respect the choice made by Albertans yesterday? Or is he going to snub them and insist on a list that contains more than one name?


Donald Frank Mazankowski: Mr. Speaker, I think all of us in this House support the principles of democracy. However, we also support the responsibility and the obligation to uphold the constitution and proposed constitutional amendments as was the-


John Napier Turner: This was not ratified!


Donald Frank Mazankowski: If the right hon. Leader of the Opposition wants to get in on the act again he can. He said that this has not been ratified. That is quite true.
What was agreed was that until such time as it was ratified, the spirit and the letter of the Meech Lake Accord would be fulfilled. The Prime Minister is prepared to do that and we expect the premiers to do likewise.


John Harvard: Mr. Speaker, the Deputy Prime Minister is not going to accept the democratic choice made by Albertans yesterday.
If the Deputy Prime Minister is going to be so stubborn about a list, I will tell him that there was a total of six candidates in the Senate election yesterday. Would he be satisfied with that list? If so, why in heaven's name would he not select the winning name from that list?


Donald Frank Mazankowski: Mr. Speaker, I am not being stubborn at all. What I am saying is that there is a constitutional obligation and responsibility. There is an agreement that is enshrined in the Meech Lake Accord which the Prime Minister and the premiers agreed to follow in spirit and in letter.
It is certainly not the hon. member's responsibility to submit names or to appoint a Senator. It is the responsibility of the premier of the province of Alberta to submit a list of names. I can assure him that when he does it will be considered in appropriate fashion.


ILLEGAL DRUGS
Mr. John Brewin (Victoria):: Mr. Speaker, my question is for the Solicitor General. The rising tide of illegal drug use in this country is an issue of concern to all Canadians. What is the government's answer? We find now that this government has effectively cut back the RCMP's available funds by $40 million for its law enforcement work in drug trafficking. Furthermore, for the last three weeks the RCMP has not even had the funds to rent cars and has to check "home" before it can make long distance telephone calls.
Will the minister assure Canadians that instead of spending money on high profile campaigns to promote the minister and the government, it will give the RCMP the funds to do its job properly?


Hon. Pierre Blais (Solicitor General of Canada and Minister of State (Agriculture)):: Mr. Speaker, I think the numbers in the article my colleague has referred to, because it was on the radio this morning, are totally false. This year we have put more money than we have ever put against drug traffickers. As happens from time to time, we need more money, and so we have had to reallocate funds from other parts of the budget. This is what we have done. We have even put more money into the Toronto area where this story comes from. We have put more money this year than we ever have in the past against drug traffickers.


John F. Brewin: Mr. Speaker, the story may have come to the minister from Toronto, but in fact it is the Deputy Commissioner of the RCMP based here in Ottawa who is quoted. What he says is that the funds for high profile PR campaigns have been transferred from the work on the street where it must take place.
The Solicitor General will have to concede that the last week has not been a good one for him. We have the RCMP running out of money. We have a report that says that CSIS, for which the minister is responsible, is still spying on peaceful Canadians. We have minister's parole officers going out on strike this week. Finally, we have a prestigious international conference in Montreal on urban safety which has pronounced the direction that the minister is taking against drugs is a total failure.
Will the minister, who is also the Minister of State for Agriculture and the government minister responsible for eastern Quebec, admit that Canada needs a full time and not a part-time Solicitor General?


Pierre Blais: Mr. Speaker, I would need the rest of the afternoon to answer the hon. member's question. However, to be more specific and stick to the question of the war against drugs, two years ago this government set up a national anti-drug strategy in which we invested over $210 million to enable all departments involved in the war against drugs to work together.
Earlier this year, only nine months ago, we implemented new legislation to be able to seize the earnings of drug traffickers. So far we have seized over $30 million, quite an achievement.
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Mr. Speaker, I believe our government is doing more than ever before to fight drugs. Like all Canadians, the opposition should join our efforts to give Canadians the assurance that the government is doing all it can to keep drugs from destroying our families.


Mr. Larry Schneider (Regina-Wascana):: Mr. Speaker, yesterday in the House in response to a question from the hon. member for Winnipeg South Centre, the Minister of State for Small Businesses and Tourism made reference to funding called for under "Going Global", Canada's trade strategy. As this is a very important international trade initiative, could the minister confirm these figures please?


Thomas Hockin: Mr. Speaker, I am very happy to tell the hon. member that yesterday in my caution not to exaggerate, I considerably understated how much is being spent on "Going Global".
The member for Winnipeg South Centre will be relieved when he hears how much more we are spending than I indicated yesterday. The announced "Going Global" trade strategy calls for funding of $93.6 million over five years which can be summarized as follows: the Pacific 2000 initiative which is $65 million; the Europe 1992, which is $19.6 million; and $8.8 million for communications. This is to be added to our over-all program for the U.S.



Mr. John Nunziata (York South-Weston):: Mr. Speaker, my question is to the Solicitor General. The bottom line is that the government's national drug strategy is not working and it is becoming abundantly clear that Canada is the weak link in the North American war on drugs.
The CBC news report today indicated that the special RCMP budget used for undercover drug operations, the classified expenditure fund, was either frozen or de-

Oral Questions
pleted and that for a period of time undercover narcotics agents were unable to fight the war on drugs.
I would like to ask the Solicitor General whether the report was accurate when it stated that at one point in time the fund was either frozen or depleted, and can he explain why narcotics officers were rendered useless because there was no money in the kitty to fight the war on drugs?


Pierre Blais: Mr. Speaker, the report my hon. friend is talking about is not true. We have put more money into that budget this year than last year and the year before. The problem is that because we are working harder against drug traffickers this year, we need more money. We have had to reallocate the money from other parts of the RCMP budget. So we have put more money against drug traffickers in this part of the budget. That is the reality. That is true. Those are the facts.


John V. Nunziata: Mr. Speaker, the facts are that the RCMP had to go to the minister with cap in hand asking for money to rent cars for undercover agents and to rent telephones to monitor drug dealing in Ontario.
A cover story in this week's Maclean's confirms what we said almost three weeks ago, that Canada has become a haven for the laundering of illegal drug money and that Bill C-61 is totally inadequate in addressing the problem. Officials of the drug enforcement administration in the United States have referred to Canada as the Maytag of the drug laundering industry, solid and dependable.
When will the government get serious in fighting the war on drugs and introduce legislation immediately in order to force the banks and other financial institutions in Canada to report large currency transactions?


Hon. Gilles Loiselle (Minister of State (Finance)):: Mr. Speaker, I would caution the hon. member in using possible headlines in the media in articles which are otherwise well balanced. This could bring some discredit to the reputation of our country. What the hon. gentleman refers to is absolutely untrue. His party of the last 20 years did nothing. It is this party which two years ago introduced legislation which is considered to be the best in the world. We are working with all financial institutions, the RCMP to close all the possible holes that exist. It is an ongoing and difficult process but we are capping
it. I am very confident that we will win this fight. We have to keep at it, we are at it and we are presently considering other measures that, if they are needed, will be implemented. You will not find us wanting in this regard.


PRESENCE IN GALLERY
Mr. Speaker:: I wish to draw the attention of the House to the presence in our gallery of Madame Roldeth Dos Santos, the Angolan Secretary of State for Social Affairs.


Some Hon. Members:: Hear, hear!


RAIL TRANSPORT
Mr. Brian Tobin (Humber-St. Barbe-Baie Verte):: Mr. Speaker, my question is for the Minister of Transport. The minister knows that in the face of mass cuts that have been made to VIA Rail passenger service in this country, many Canadians are now concerned about the loss of freight service in this country. Indeed, the minister himself suggested yesterday that substantial freight cuts may be pending.
Has the minister been advised by either Canadian National or Canadian Pacific of proposed cuts to rail freight service in Canada? Is the minister prepared to give the House a commitment today that those Canadians who have lost VIA Rail passenger service will not find their freight service being cut next?


Hon. Benoit Bouchard (Minister of Transport):: Mr. Speaker, there is obviously no connection between the VIA Rail services and CN or CP services. Any request by CN or CP for branch line abandonments has to be addressed to the National Transportation Agency and not to the Department of Transport. This agency is quite independent of the government. I admit, as I have said before, that CN and CP make many requests to the NTA.
In terms of abandonments, the National Transportation Act is very clear about the process. The NTA has not yet made a decision in most cases, but we are working with the provinces to see what can be done. In western Canada it is a little different because the branch lines are all protected until the year 2000. Eastern Canada has a
October 17, 1989

problem and we are working on it with the provinces, and I believe we can find an answer to the problem.


Brian Vincent Tobin: Mr. Speaker, this minister has more nerve, I submit, than a severe tooth ache. He wants Parliament and Canadians to believe that this is a matter for the NTA and the NTA is totally at arm's length from the Government of Canada. This is the minister who just used an Order in Council to wipe out VIA Rail and said: "Damn the NTA".
Canadians who live in the eastern part of this country, in particular those in Atlantic Canada, know that the writing is on the wall for the end of rail freight service in Atlantic Canada. The minister knows it. He discussed it publicly yesterday. I want a commitment today, on behalf of those Canadians, that the government will forbid the abandonment of rail freight service until such time as your own royal commission on transportation has had a chance to do its job and report. Is the royal commission worth a damn or is it another bluff?


Benoît Bouchard: Mr. Speaker, first of all the
royal commission will work on the passenger service. It will consider the freight system.
The member asks me to overrule the law, but it is the National Transportation Agency which makes that kind of decision. I said before, and I repeat, we are monitoring very closely the question of rail services, particularly on the freight side and we are working with the provinces. They are supposed to provide what they call their substantial or essential network in the country. But once again, as I said yesterday, we face a problem in all transportation modes, but we are trying to fix and address those problems.


Mr. Iain Angus (Thunder Bay-Atikokan):: Mr. Speaker, my question is for the Minister of Transport. The minister knows full well that there is an established pattern in this country when it comes to passenger rail and freight rail. Newfoundland experienced it. They lost their passenger rail and later lost their freight. Prince Edward Island lost their passenger rail then lost their freight.
Given his statement to the transport committee yesterday and his comments in the House today, is the closure of some VIA services not the first step toward dismantling all freight services in Canada, particularly
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Atlantic Canada? What is going to be next, Victoria to Courtney, Halifax to Sydney?


Benoît Bouchard: Mr. Speaker, as I said before, there is no connection between the cuts at VIA Rail and requests made to the National Transportation Agency. These are two entirely different problems.


Iain Francis Angus: Mr. Speaker, the minister may say they are disassociated, but history will prove him wrong.
The minister knows full well that when rail lines are abandoned, they are usually sold and dismantled. If the royal commission that his government has set up finds that rail is a transportation mode for the 21st century and that the ties, rails and right-of-ways are gone, it may cost tens of billions of dollars to restore the railways and it may not, in fact, be possible. Given this, will the minister look to the future and halt all abandonments until the royal commission has submitted its report and has been considered by the people of Canada?


Benoît Bouchard: Mr. Speaker, once again the member is trying to mix up Canadians with a royal commission working on passenger services and with CN or CP branchline abandonments. They are two issues. The first one we answered two weeks ago with the new network we have proposed to Canadians. There is another one that I said we are working on. I believe that once again, do not try to mix up Canadians with two issues which are totally different.


POLLUTION
Mr. Rex Crawford (Kent):: Mr. Speaker, my question is for the Minister of the Environment. He will be aware that his announcement to clean up contaminated land sites is not enough to address the reality. Only 50 sites will be cleaned up over five years and yet the province states that there are over 3,000 underground and toxic waste dumps in Ontario alone. That does not include sites that have yet to be uncovered through a generation of dumping hazardous waste.

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Does the minister not agree that more money is needed to firmly deal with the underground toxic menace, and that a super fund paid for by the industry levies is the long-term answer to this long-term problem?


Hon. Lucien Bouchard (Minister of the Environment):: Mr. Speaker, we in Canada have 1,000 contaminated sites, 50 of them are abandoned sites. With the announcement yesterday I hope to be able, during the next days in Prince Edward Island together with my colleagues, the provincial environment ministers, to strike a deal where we will trigger a whole operation covering all of the country to get rid of the 1,000 contaminated sites. If we can put $150 million from the federal point of view, we will be able to trigger an operation over all of Canada to enable the provinces to adopt legislation and regulatory mechanisms to oblige companies to clean up the 950 sites which we know are contaminated.


Rex Crawford: Mr. Speaker, the minister knows that for 95 per cent of the identified sites the polluter pays, but many provinces have yet to pass legislation to force this penalty. This is a national issue needing national leadership. Does the minister not agree that his cleanup program should be federally administered with enforceable national standards rather than having an inconsistent patchwork of provincial regulations?


Lucien Bouchard: Mr. Speaker, this is a question of shared jurisdiction. We have in Canada a Constitution where the provinces have jurisdiction. We must respect those jurisdictions, but there are ways to strike agreements with the provinces so as to put in force joint operations, and this we will be doing.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson (Etobicoke Centre) that Bill C-28, an Act to amend the Income Tax Act, the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act, the Old Age Security Act, the Public Utilities Income Tax Transfer Act, the War Veterans Allowance Act and a related Act, be read the second time and referred to a legislative committee.
The Acting Speaker (Mr. Paproski):: When the House rose at one o'clock the hon. member for Mission-Coquitlam had ten minutes for questions and comments. I wall now recognize members on questions or comments. The Hon. Member for Surrey-North.


Mr. Karpoff:: Mr. Speaker, I would like to ask my colleague a question on the clawback of family allowances. One of the things that is very noticeable in Canada is that we have changing demographics and our birth rate is dropping. At the same time, the cost of raising children has increased dramatically. One of the things that families have had in this country that is unique is a universal family allowance program. This program has tied families together because every family, regardless of economic circumstances, has had one common universal program which they know they will all receive.
What does the member think this is going to do to the concept of family solidarity in Canada and the commitment that all Canadians have to universal programs?


Joy Langan: Mr. Speaker, I would like to thank my colleague from Surrey. It is important when we talk about the impact of the clawback in family allowance on the family that we think about it in terms of the whole context of the attack on the family that is being carried out by this government.
We have an attack on the family under the unemployment insurance program. We have an attack on the family in terms of an attack on pensions of seniors who are part of the expanded family. We have an attack on the family with the clawback on the family allowance.
We are facing today an amendment to this legislation that will mean that any family with an income of $50,000 will see a portion of its family allowance clawed back.
Again, expanding and projecting what this clawback will mean in 20 years, one need only take a look at the impact on pensions and transfer it to family allowances. This means that in many cases the family allowance currently going into a home is the only independent income that a mother has in terms of spending for her

children or spending for the home, and it is going to be taxed based on her husband's income. It is a total denial of the universality in which this family allowance program was introduced. It is the thin edge of the wedge. I would suggest that it belies an underlying current of attitudes of this Tory government toward the family, toward support for the family, and toward again attacking the poor to protect the rich.


The Acting Speaker (Mr. Paproski):: Since there are no more questions or comments, debate. The hon. member for Hillsborough.


George Albert Proud: Mr. Speaker, I rise today to address this House on Bill C-28, an act to amend the Income Tax Act, the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act, the Old Age Security Act, the Public Utilities Income Tax Transfer Act, the War Veterans Allowance Act and a related Act.
This piece of legislation is a myriad of amendments to the Income Tkx Act, some 59 amendments aimed at implementing most of the provisions detailed in the government's April, 1989 Budget, a budget that pum-meled Canadian families, insulted the voters of this country and penalized the poor even further.
This legislation continues, or more appropriately, cements the government's plan to end the universality of social programs. We know that the government's social program cuts will make up nearly 30 per cent, or $610 million of the $2.8 billion in spending cuts. The Minister of Finance announced these cuts for the 1990-91 fiscal year. This was in addition to the previously proposed changes to the unemployment insurance program which will eliminate the government's contribution of $1.9 billion in the year 1990-91.
We are seeing the end of universality, a long standing principle of the Canadian system of social benefits. I say that because universality is by definition of or belonging to or done by all persons or things in the world or in the class concerned and is applicable to all cases. In other words, regardless of income some benefits have to be delivered to everyone. What the government is proposing in this legislation is to take away all of the benefits
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over a specific income level, not only for old age security pensions, but for family allowances as well.
Canadians have long been told to consider old age pensions when planning for their retirement. Now they find that the pensions will not be there as expected, and that at this time they have very little chance of changing their financial situation. What happened to the Prime Minister's position of 1984 when he promised that universality was a sacred trust? That sacred trust has been tossed aside by the Prime Minister, the Minister of Finance and this government as a whole.
In 1984 the then Minister of National Health and Welfare stated in the House: "All savings generated from any changes will be redistributed to social programs and will not be applied to deficit reduction". He went on to say: "Benefits from old age pensions will be taxed no differently from any other form of income".
It is not hard to understand why Canadians are angry at this government. I guess the sacred trust has been replaced with the other two words we have had drilled into us lately, those of "deficit reduction". If the senior citizens of this country, individuals who have given many years of hard work and trust, cannot be spared by this government then I guess it is obvious that aside from major corporations no one will be spared.
Bill C-28 brings more tax increases, reduced federal transfers to the provinces for health and post-secondary education and imposes clawbacks on family allowances and old age security benefits, specifically Part 1.2 of Clause 48 of the legislation which implements these clawbacks. The clawback of the family allowances will take $1,686 billion out of the budgets of Canadian families over the next five years. Due to partial indexing, close to one million Canadian families who currently receive family allowances or old age pensions will begin to lose these benefits within ten years.
These clawbacks are anti-family and anti-senior. No matter what the total income for a senior citizen is, the principle of fairness suggests that it should not matter how a person attains this income. It should not matter whether it came from the government or from financial investments. The government's clawback would single out certain groups of people who receive family allowance or old age pension cheques for a special tax. Seniors

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who receive their income from a pension will pay more tax than seniors who receive their income from investments. This is simply unjust.
Under the aforementioned tax changes family allowances and old age pensions will be taxed from individuals with net incomes over $50,000, not from families. The clawback system is set up in such a way as to allow a family in which each parent or partner works and earns $49,000 to retain all of its benefits because neither individual alone earns over $50,000. In stark contrast, a family in which one parent or partner works and earns $75,000 will lose all of its family allowance or old age pension benefits to the government's clawback system.
In the government's own consultation paper entitled "Child and Elderly Benefits" January, 1985, the idea of clawback on old age benefits was rejected. It stated that it would seriously disrupt the retirement income system.
The fine print of this legislation states that the $50,000 threshold between those who must pay the surtax and those who do not will be indexed each year according to increases in the Consumer Price Index, but at less than 3 per cent. If incomes continue to increase in keeping with the rate of inflation, but the threshold rises less than 3 per cent, then families and seniors will quickly fall to the other side of the ledger and have to pay the surtax.
The Minister of Finance has stated that the government will occasionally restore the threshold since it is only partially indexed. Does he really mean this? He does not seem to realize what universality means, so one can only assume what he thinks "occasionally" means. Perhaps to the minister, 31 tax increases in five years is occasional. If so, it seems he will adjust the threshold, but don't be surprised if no adjustments are forthcoming.
Parents and pensioners make a special, invaluable contribution to our society, in the past, present and future. These clawbacks imply that such contributions are unimportant and that some are worth even less than others. The families and seniors of this country deserve better treatment and more respect than this. We in the Liberal party do not believe in treating valuable members of our society the way that this government is treating them.
At a recent convention of the National Pensioners and Senior Citizens Federation, an umbrella organization for seniors' groups in Canada, members voted unanimously to bring a court challenge against the government clawback. They are furious not only because their incomes will be taxed at a higher rate, but because the minister refuses to fully index the $50,000 threshold, a situation which must give him a sense of deja vu.
A clawback on old age security pensions will force 54,000 seniors to pay back all of their pensions. Furthermore, 74,000 seniors have to pay back at least some portion of their pensions. How is this government going to explain to seniors why it has taken contributions that were made in good faith? Seniors paid into the program and they have a right to reap the benefits.
Canadians are going to fight this government. We in the Liberal party will fight this government to stop the continued erosion of the very fabric of this nation. We have seen a flood of regressive policies from this government, VIA Rail cuts, unemployment insurance cuts, and base closures that have devastated regions such as my province of Prince Edward Island. They assure us that it is all for our own good. Now we face clawbacks, and the government could never generate enough rhetoric to mask its long hand reaching further and further into the very heart of Canada until it is tom right out.
Canadians cannot trust this government. They are being cheated out of what belongs to them. They are being betrayed after years of contributing to the society in good faith. This legislation is an insult to every man, woman and child, every family and eveiy senior in this country.


The Acting Speaker (Mr. Paproski):: On questions or comments, the Hon. Member for Kingston and the Islands.


Peter Andrew Stewart Milliken: Mr. Speaker, my comment is directed to the Hon. Member for Hillsborough. I want to congratulate him on the excellent speech he has just made. I am sure that his constituents will be very proud of the remarks he has made in defence of seniors in his riding.
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I wonder if, during the election campaign, the Prime Minister and the Minister of Finance had occasion to visit the province of Prince Edward Island, and if, in the course of that visit, they made some of the outrageous promises that they made in other parts of Canada saying that they were going to do everything in their power to protect seniors, that pensions were a sacred trust and items of that kind?


George Albert Proud: Mr. Speaker, I want to thank my hon. colleague for the questions he has put forward. Yes, indeed, a year ago at this time the Minister of Finance was in my riding. He certainly assured the senior citizens, especially the senior citizens in the senior citizens' homes throughout, specifically in the Charlottetown region, that nothing was going to happen in any way to their pensions, and that they could certainly trust this government. Many of them did not necessarily agree with this apparently because of the way the election turned out.
I also have had many, many comments from people who have talked about this clawback provision that is coming about. We have many people in our society today, many seniors, who have worked years and years and years working hard. They have been very prudent and have been able to save some money only to find now that as they reach pensionable age that pension is not going to be there for them.
Yes, the promises were made in my riding and, obviously, those promises are not in any way going to be kept.


Mr. Volpe:: Mr. Speaker I, too, would like to compliment my hon. colleague from P.E.I. who has raised a very important question in debate today. I would like to have his comments on another component of the whole clawback scheme, aside from the fact that we are moving away from the universality of a concept, a concept that provides security both social and monetary for all of our citizens who have made great contributions to the general wealth of this nation. One of them has to do with a very important and I think legal position that is being eroded by this clawback system. I refer to the many pensioners who prior to the establishment of the larger OAS plan were actually making contributions to a government-sponsored pension program which now these people see eroded. They see now that they can no longer benefit from the contributions that they have made. Those were contributions that had already been taxed and now these people see themselves being taxed
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yet again. I wonder if the hon. member would comment on that, Mr. Speaker.


George Albert Proud: Mr. Speaker, this very question has been posed to me on many occasions because there are many, many people in our society today who have, for many years, contributed that amount of tax to prepare for then-pensions when they reach that age. Certainly this is a violation with respect to these people who, when you talk to them over the years, would say: "Next year I will be 65.1 will be getting the old age pension". Pensioners will find that is not going to be a reality for them because this pension is going to be clawed back and the seniors are going to lose it all.
A friend of mine has worked hard all of his life for not very much money, and only in recent years has been able to accumulate some money. He finds that it is not going to be available to him and to his family. This is a breach of trust to the people of this country of ours.


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated. On debate, the Hon. Member for Winnipeg North.


Mr. Rey Pagtakhan (Winnipeg North):: Mr. Speaker, I am glad to rise and speak on Bill C-28, an act to amend the Income Thx Act, the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act, the Old Age Security Act, the Public Utilities Income Tax Transfer Act, the War Veterans Allowance Act and a related Act. On the various components of this bill I would like to focus my comments in opposition specifically to that which relates to the Old Age Security Act. I therefore rise and speak out against this bill because it proposes amendments which will result in a move away from our tradition of universality in social programs. This is the most significant change in social policy in a generation in Canada.
Part 1.2 of Clause 48 on page 46, Section 180.2 of the bill as printed is entitled "Tax on Family Allowances and Old Age Security Benefits". This particular part implements the clawback of family allowances and Old Age Security pensions. Henceforth individuals earning more than $70,000 will no longer receive old age pensions and family allowances. Those earning $70,000 will receive partial old age pensions and family allowances. The tax-back rate will be 15 per cent. The $50,000 threshold will be partially deindexed. In real terms the threshold will be reduced through time. This measure will be phased in over three years. When fully phased in, the tax

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increase will be much higher than the $320 million reported by the government.
This clawback is not only unfair and dangerous to universality, but it is a blatant example of the pernicious way this government runs the country. The government said one thing during an election campaign, made all sorts of promises to win votes, and then as soon as it was re-elected it ignores the concerns and neglects the needs of Canadians. It abandons, or, worse, it dismantles social programs which are put in place to promote the social and economic interests of all Canadians, families and seniors included.
This is intolerable. This government is no longer just cutting the fat from our social programs. It is cutting the sinew, the muscle, and even the bone of our social character, of our social well-being. This government is trying to destroy the very foundation of our society by attacking the universality of social programs and by unfairly targeting groups, such as senior citizens who are the most vulnerable to attack, who made it possible for us to be where we are today.
What is particularly frightening is that this government refuses to index the $50,000 threshold for the first 3 per cent of each year's inflation. If we look ahead at maintaining current buying power while evaluating seniors' income in constant dollars, and if we project current inflation rates forward, in eight years the threshold will be the equivalent of only $35,000 or $40,000. By the year 2000, the clawback will start at $35,765; in 15 years from now, the threshold will be down to $30,000; and five years later, when the first of the baby boomers start retiring, it will stand at only $28,000 a year and will affect 2 million Canadians. Eventually the number of Canadians returning their entire benefits to the taxman will be so large that the idea of making payments to everyone will be abandoned. That then will be the demise of universality.
The clawback tax is also frightening because it is unfair. The impact will not only be confined to high-income Canadians, it will discriminate against one-income families and against senior citizens 65 years of age and older. A family with one net income of $55,240 will have to pay back all of its family allowances as a result of this
new amendment. But a two-income family, in which one spouse earns $45,000 and the other some $40,000 will not have to pay back anything. By any arithmetic standard the proposed clawback cannot even approximate fan-taxation.
The seniors' clawback amounts to age discrimination, since a pensioner earning $60,000 a year will be treated differently by the income tax system than a 64-year-old. Further, the clawback will single out those people who receive family allowance and old age pension for a special tax; such that seniors who receive their income from a pension only will pay more tax than seniors who receive their income from investments.
The clawback is unfair, in fact, unethical for another reason. The elderly have already paid for their old age pensions through a lifetime of paying income taxes. The clawback changes the rules of the game without the consent of those who had paid in the past.
In the 1950s the government insisted Old Age Security would be a contributory plan that paid for itself with each year's benefits funded by matching contributions. A special tax was created for the purpose, and each time the pension was raised the tax was raised. Seniors of today paid for that tax.
That tax was not ended until the 1972 tax reform. Hence seniors, because they had made their contributions, have a legal, moral, and ethical right to collect this pension. For years people have been told to consider old age pensions when planning their retirement income. Now they may find out that it may not always be there at a time when they have little chance of changing their financial situation.
The elderly are also in a poor position to fight back against a government that is whittling away at then-pensions. They cannot afford to hire an expert who can help them to file their forms and show them how to reduce their taxes. They are being cheated by this government's clawback scheme out of the pension they have paid for in the past. This is exactly what the Prime Minister promised not to do during the last election campaign. Indeed, in the presence of his mother, the Prime Minister promised that any government he would lead would improve pensions rather than degrade them.
October 17, 1989

The government swore during its election campaign that social benefits would not be jeopardized and that old age pensions were a sacred trust. Suddenly, after the election, statements about sacred trusts are being replaced by statements about the need to decrease the deficit. The government knew, or ought to have known, the state of the financial books at that time. Yet the government chose not to tell the Canadian people then. Now the government is stating that all Canadians, including seniors, have a responsibility to pay out of their own pockets to make up for this government's fiscal ineptitude. This, I submit, is a blatant breach of faith. The government has gone about breaking its word in a very insidious manner. This government claims that it is continuing the principle of universality but in reality it is cancelling it. It does not even have the courage to be honest with the Canadian people.


The Acting Speaker (Mr. Paproski):: I regret the hon. member's time has expired. Questions or comments?


Paul Edgar Philippe Martin: Mr. Speaker, I wish to commend the hon. member for his remarks. In a very short period of time he has clearly demonstrated that he is a very perceptive analyst of the social programs and the social needs of this country. It is a pleasure to listen to him. I would have been quite prepared to continue listening for a longer period of time.
I would like to ask the hon. member, given his unique background as a medical doctor and his experience around the world, if he would be prepared to continue his comments in analysing the importance of social programs within the Canadian scene and comparing them elsewhere.
I would also be interested in hearing his comments about the effect on the credibility of the political process when the government now in power came to power by establishing one set of social programs and then breaking every promise it made.


Rey D. Pagtakhan: I thank my hon. colleague. I would like to continue, indeed.
This government claims it is continuing the principle of universality but in reality it is cancelling it. Although it still sends old age pension cheques to everyone, it then pulls them back from the people. This is not universality. To be universal a social program must deliver benefits to
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everyone regardless of income in the target group. A universal old age pension, for example, must give net benefit to everyone over age 65. Old age pension benefits have been juggled several times over the years, but every adjustment left net pension in the hands of everyone, rich or poor.
A further consideration is that this government's global scheme will be costly and inefficient. Indeed, it is ridiculous that the government is trying to save money by clawing back but then spends money on all the people and paperwork necessary to collect the clawback.
The government continues to contend that universality has not been affected. In reality, the government is breaking the psychological barrier to whittling away universality. When a bedrock value in Canada like universal social programs is tampered with, it causes us to worry about what will be tampered with next.
Will the government tamper next with the health care program? In Bill C-28 this government has attacked the very principle which has made the people of our country secure and which has been the cornerstone of our social policy.
Thus I speak out against Bill C-28 and against this government's insidious attempt to abandon universality. Constituents of Winnipeg North speak up against this bill in defence of universality.
I call on the government to exercise a conscience, to withdraw this bill in the interest of all Canadians, in the interest of Canadian families, and in the interest of Canadian seniors.


Jean-Robert Gauthier: Mr. Speaker, Bill C-28 attacks the right of senior citizens. It attacks their pensions for which they worked very hard. It attacks family allowance and our families. It attacks the principle of the universality of social programs that we designed and implemented many years ago. Bill C-28 attacks the social contract of a self-respecting Canadian society that respects its senior citizens and its children.

This bill is a betrayal of the Prime Minister's promises made in the last election. I remind members of the promise made by the Prime Minister in Sydney, Nova Scotia during the last election campaign. He said: "As long as I am Prime Minister social programs, especially those for the elderly, will be improved, not diminished".

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This Bill C-28 is a betrayal of what the Prime Minister once called a sacred trust.
Bill C-28 makes 59 different amendments to the Income Tax Act and is a Tory plan to end universality of our social programs and thereby penalize Canadians. Part 1.2 under clause 48 implements the clawback of family allowance, the clawback of old age security pensions. It will take from Canadian families $1.68 billion of their budgets in the next five years, or the government will clawback $500 million a year from our seniors and from our families.
The government in this bill proposes a threshold of $50,000 at which individuals will begin paying back their family allowances and old age security benefits. I remind the House that both these programs are only partially indexed above 3 per cent. The deindexing of the $50,000 threshold means that within 10 years close to one million Canadian families will start losing their family allowances and old age pensions. The clawback proposal would put a special tax on families with children and on seniors.
I mean by "a special tax" an inequitable tax and unfair tax because it does not apply to anyone else. You have to be a senior or have entitlements to family allowance to have this tax applied to you. It does not take very much logic to understand that this clawback is anti-family and anti-senior.
How can Canadians trust someone who in front of the cameras in the last election made a solemn promise to his mother-remember that one-never to touch universality. A few months later he turns his back on his own mother and abolishes universality. That is exactly what the Prime Minister said during the election, yet he reverses himself completely, publicly, and brings on this atrocious bill.
My leader said during the election: "Citizens of this country, working throughout a lifetime to help build Canada, have depended on the old age pension as a right of citizenship. They have spent a lifetime of being taxed and they have planned their future on the basis of that pension. It was part of the social contract in this country".
That is the commitment. The Mulroney government is breaking that life long contract and I say to it: "Shame".
Last September 23 the National Council of Welfare, in its last report, stated: "There is no question the clawback puts an end to universality". It went on: "A social program that delivers benefits to everyone and then collects them all back from some recipients is not universal".
The Prime Minister, when informed of this statement by the National Council of Welfare, said: "Well, it is just another comment. It is just another statement". I was upset and very shocked by the Prime Minister's backhanded type of comment to this very important National Council of Welfare report and his display of a certain amount of arrogance toward the council.
I wrote the Prime Minister a letter, dated September 14, 1989, and there has been no acknowledgement yet. I told him that I was upset and angry. I wanted him to give us some reasons why he was proceeding with this savage attack on families and seniors. No answer.
But we heard one of the most prominent of his back-benchers, the chairman of the finance committee who is going around the country on the GST at this time, speak the same language as the National Council of Welfare. Here are the words of Mr. Blenkam, one Tory member, a prominent member in terms of finance, stated: "We have decided to eliminate universality and we do that in a-"


The Acting Speaker (Mr. Paproski):: I do not wish to disturb the hon. member's debate, but he should recognize the hon. member as the hon. member for Mississauga South.


Jean-Robert Gauthier: Thank you, Mr. Speaker.


Mr. Rompkey:: For the time being.


Jean-Robert Gauthier: For the time being I will recognize him as the member for Mississauga South, and I will go on to quote him again. He stated: "While the clawback may be unfair and sneaky it is there". That sounds like clear language from a member of that Tory caucus-the clawback as read.
The executive director of the Canadian Council of Social Development also stated: "Social programs aren't a sacred cow any more. They are a dead cow". Michael Walker, director of the Vancouver Fraser Institute, a right wing organization, stated: "This means we will get
October 17, 1989

rid of universality gradually". Mr. Speaker, the Senior Citizens Federation of Canada, in a letter it wrote to the Prime Minister, stated: "We view this proposal as a serious breach of faith by our government, an insidious effort to undercut the social security programs that you have on numerous times stated are a sacred trust".
I ask: Is everybody wrong and this government and the Prime Minister the only ones who know what is right? These people are making it clear to Canadians that it is wrong to put into our social program network a clawback which takes back from the seniors and from families certain moneys to which they are entitled.
In the past five years the Conservatives have made it their policy to speak out of both sides of their mouth. What was sacred trust before the election is a broken promise after the election. Even the Minister of Energy, Mines and Resources, when he was the Minister of Health, stated on December 21, 1984: "All savings generated from any changes will be redistributed to social programs and will not be applied to deficit reduction". He also went on to say: "Benefits from old age pensions will be taxed no differently than any other form of income". That is a minister of the Crown speaking.
It does not make any sense that after an election in 1988 they come back and throw away all these promises, all these undertakings, all these commitments they make to Canadians. They did not say that during the election. No way, no way. They said different things and that is why I say they are two-tongued.

They talk out of both sides of their mouths!
I see you are about to rise, Mr. Speaker. I hope I have another question so I can finish my comments.


Paul Edgar Philippe Martin: Mr. Speaker, I have a comment and a question for the hon. member. He has great experience in this House and as a parliamentarian. He has clearly demonstrated it in his remarks this afternoon. There is an enormous amount of cynicism and disenchantment among the electorate about politicians
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who make promises, say things, and then get into office and do exactly the opposite.
The member has articulated very well the fact, I believe, that the Prime Minister supported the policy of universality before the election and then appears to have blatantly reneged on that promise. I find this very difficult to accept and to understand, as I am sure the Canadian people do. I wonder if the hon. member is prepared to comment on that and on the cynicism that this creates among the Canadian electorate.


Jean-Robert Gauthier: Mr. Speaker, I would like to respond to that question by saying that a buck is a buck is a buck. Tkxed as we are, it should not matter where the money comes from. But the progressiveness of our tax system under this government is changing. If you are a senior citizen, tax policies will be applied differently.
A person 40 years old earning $40,000 will be taxed a certain way, but a senior citizen in that same category income tax-wise will have to be paying taxes on his or her old age security pension.
I find that difficult to understand. I find that clawback proposal, putting a special tax on seniors and on families, to be totally inappropriate. We have a progressive tax system and we cannot start applying special taxes to seniors and to those who are entitled to family allowances. I think that is wrong.
Universality is a principle that the member should know well because his father, Paul Martin, when he was a member of this House was one of the proponents, one of the great defenders, who put in place in this country those social programs which you and I share today, including the old age security pension and health programs.
We have developed in this country over the years a great system of social programs. All Canadians have universal access on a non-profit basis. Whether you can afford it or not you will get fair, equitable and good treatment in our hospitals and in the health care system.
You will get a pension; it does not matter if you are from the east or the west, tall or short, fat or whatever, you get the same pension whether you are rich or poor. That is what is called universality. That is why the National Council of Welfare said in its report published in September:
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There is no question that the clawback puts an end to universality-
A social program that delivers benefits to everyone and then collects
them all back from some recipients is not universal.
It appears to me that it is a very simple argument. Why is the government proposing today to tax seniors and family allowance recipients in a different manner than it taxes other people? I tell you that is wrong.


James Capsey (Jim) Karpoff: Mr. Speaker, normally when there is significant change in social policy governments come forward with a White Paper or a royal commission and say up front that they have decided to change the social contract within a country.
One of the things that surprises me is that this government is probably making one of the most significant changes in our social policy, certainly since the end of the Second World War, and it is doing so while at the same time trying to deny that it is taking place. But then again, I am beginning to understand that what the government says and what the government does are two entirely different things. It says it is going to improve the Unemployment Insurance Act when in fact it is diminishing the benefits available to a large number of people and starting the dismantling of the unemployment insurance system.
It is going to improve VIA Rail by doing away with half of it. Now it is introducing a fundamental change in the Canadian social security system without ever even acknowledging that this is what is taking place.
This bill deals with two fundamentalist aspects. One is the whole question of universality of social programs and the other is the credibility of this government, particularly the credibility of the Prime Minister. On both counts the government seems to be determined not to acknowledge that this is what is taking place.
I cannot help but think that much of what we are seeing in this legislation is outflowing from the free trade deal. During the debate on the free trade deal and the discussion during the 1988 election campaign, the government insisted over and over again that the free trade deal would not affect our social programs; that it would not affect our programs like unemployment insurance, health care, pensions and family allowances; that these were programs that would have no impact from the free
trade deal. Yet, as soon as the free trade deal was ratified we found out that all these programs were under attack.
There is a harmonization taking place between the social programs in the United States and the social programs in Canada. This means that there is a fundamental change taking place in Canada. The United States has a free market concept even in the area of social programs, that is, the wealthy and the powerful can take care of themselves and then they set up a charity for those who fall between the cracks, those who are unprotected-the weak, the poor and the disadvantaged-and provide them with a few minimal crumbs.
Canada has taken a different approach. We have said there are some social benefits in this country that go to all citizens. We have outlined these. Pensions for the elderly is one area that I will come back to on a number of occasions. The concept is a universal program to which every elderly person based on their citizenship, not on their race, colour, creed, wealth, income, or anything else, is entitled. That is universality.
We have established family allowance, again quite unique from the United States. The United States has no universal family allowance program. We say that every child as a right of Canadian citizenship is entitled to receive family allowance. It is not dependent upon them being from Vancouver, Halifax or Yukon. It is not dependent upon their parents being educated or uneducated. It is not dependent upon their parents being multi-millionaires or are eking out a living. We have said that we have a concept of universality and this bill attacks those two programs.
Let us also take a look at our other universal programs in Canada. As sure as this government succeeds in doing away with universality of those two social programs, it will do away with the universality of other programs.
Let us take a look at them. First, our health care system. The concept is diametrically different from what it is in the United States. There is no universal health care, particularly hospital care, available to those in the United States.
In Canada there is. One of the fundamental rights of being a Canadian citizen is that one is entitled to health care as a universal program.
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Education is a fundamental right. It is a universal program in Canada. We have universal unemployment insurance in Canada. The United States does not have any universal unemployment insurance program. What we see now is the government attacking these programs.
Before I go into detail about the pension and family allowance, I want to explain how it is starting to attack the universality of the other programs. Let me take as an example the health care system. The health care system in this country is deteriorating badly. In my own riding of Surrey North we have a crisis. The Surrey hospital is dramatically underfunded. The publicly elected board was suspended some time ago. The public has been kept from involvement in that hospital in order to cover up the difficulties that are emerging in the deterioration of health care. Clearly, part of that is the responsibility of the Vander Zalm government, but the federal Conservative government is also responsible. It has been systematically reducing the transfer payments for health care to the provinces. Last year it reduced it by 2 per cent. This year it has a companion bill to this piece of legislation that will reduce it by another 1 per cent. This is in spite of inflation in the area of health care.
There is a deterioration in the funding level for health care from this government and from the provincial government. In an area like Surrey North, which is one of the fastest growing areas in Canada, there simply is not the funds to maintain the services, let alone the expansion that is necessary in order to meet the growing population.
We have some very ludicrous situations happening in Surrey North. We built a hospital complex, but the two levels of government do not provide the funding for the staffing of it. We now have a situation where the people in Surrey North are disentitled to the universality of health care. They do not get the same health care as one gets in Vancouver or in Montreal or in Toronto. This is a method of eroding universal programs.
The same thing can be said in terms of the decision to opt for two-tiered health care systems. Within the province of British Columbia the government has been sending up trial balloons by proposing that perhaps there should be certain kinds of medical services available to those who can afford it. We now have private clinics
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springing up. Instead of having to wait for a public bed hospital one can go in and pay if one can pay the full cost.


Ms. Black:: One system for the rich and another for the poor.


James Capsey (Jim) Karpoff: That is right. We are not getting universality but one system for the rich and another for the poor.
The same thing is happening in education, which is another universal program. We have a whole series of private educational facilities, even at the elementary level, springing up. As the funding for the public school system is kept down, the calibre and quality of the system deteriorates. Those who have money opt for a private system, particularly when it is funded 75 per cent or 80 per cent by public dollars and all they have to do is throw in the extra 20 per cent.
What we have in this bill is the beginning of the erosion of universality of our social programs. I think it is appropriate that we remind ourselves of the old story of the Arabs and the camel in the tent. The camel sticks his nose in the tent and says all he wants is for his nose to get warm. Of course, when you allow his nose in, then he puts his neck, his front quarters and his hind quarters in and then he forces you out of the tent. The Conservatives have learned that if they tried up front by a major policy decision to say that they were doing away with the concept of universality of social programs in Canada, there would be an uprising in this country, so they are going to do it incrementally, incrementally, incrementally-
Maybe the only Conservative who is honest and upright about this change is the hon. member for Mississauga South, otherwise known as the chairman of the finance committee of the House. He says clearly that it is eliminating universality and yes, it is unfair and yes, it is sneaky. But he is the only one that is willing to admit that yes, it is unfair and yes, it is sneaky. What is behind this bill is a sneaky attack on the major element of social programs in this country, that of universality.
One of the things that we should also continue to remember is that this is an attack on the credibility of the government and particularly the credibility of the Prime Minister. When you look at the statements of the Prime Minister, it is almost incomprehensible that we could be standing here in this House debating this type of a bill. In March, 1984 he said our position is simple and straight-

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forward, we are in favour of universality in social programs and it shall not be touched. How do you get from that statement to this legislation if it is not a sneaky move?
Again, when he was talking to the seniors in October, 1988, during the election, he said: "Let me say a special word to the senior citizens. In the future Canada, we'll be doing more, not less, for all of you". Get the words, "we'll be doing more, not less, for all of you". He did not qualify that by saying for all of you earning under $50,000 or for all of you earning under $40,000 in 10 years. He said,"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 for Canadians". How do you get from that statement to today? Sneaky.
What we have here is not only an attack on seniors and families, but an attack on all of our social programs. Maybe the most unfortunate thing for Canada in the long run is that we have had an attack on the credibility of government. People are becoming not only sceptical, they are totally disillusioned. How can you accept a Prime Minister standing up and saying clearly, unequivocally, that we are going to increase programs for the elderly, for all people, and then bringing in a piece of legislation like this?
I want to touch briefly on the substance of the bill because I think the substance of the clawback system has been discussed in the House. I am sure others will deal with some of the technical parts of the bill. Basically we are saying that, because we are going to be only partially indexing the clawback system over the next few years, more and more seniors will lose all of their old age pensions. Who is to say next year that the government will not decide it is $40,000 maximum and the following year $30,000? Once the camel has its nose in the door of the tent, who is going to stop it? I say we stop it now.
If any people accept the statements of the Prime Minister as guarantees, then they are really living in fantasyland. Next year, why is it not going to be $40,000 or $30,000 as the threshold? Do you believe the Prime Minister because he says $50,000 is the limit? No. What
we have is the beginning of the erosion of our universal system. They cannot even get the technical parts of it right. A family is not even considered a family unit. A one wage earner family is treated differently than a two wage earner family. At least if you are doing away with universality, get the technical parts of it right.
I want to just turn, in my last three or four minutes, to some of the alternatives. This change is being made in the name of deficit reduction. Everything that the Conservatives are doing, they say that it is because we need deficit reduction. There are many better ways to reduce the deficit, and I will just mention a couple of them.
All you have to do is increase the personal income tax rate for the highest income tax bracket by 1 per cent and you would gain the same amount of money that you would get in the clawback of family allowance and old age pensions. If you were a little bit brave and decided that you were going to increase the tax rate from 29 per cent to 32 per cent, you could in fact dramatically reduce the deficit by $2.5 million.
What we now have is, I think, a very quick sleight of hand taking place by the Conservatives. They are again protecting their friends in the wealthy group. If they raised the tax for all Canadians in wealthy groups, they would have to pay considerably more money than what they will lose in terms of the clawback on family allowance.
I just want to finish with one quick statement. Every organization, the seniors, people representing the Canadian Council of Social Development, have all been very, very clear that this is the end of universality. If the government really believes that it is best for Canada to do away with universal social programs, then at least conservatives should have the honesty and integrity to stand up in this House and say, "We believe that universal programs should be done away with and that is why we are bringing in this legislation."


Dawn Black: Mr. Speaker, I would like to compliment my colleague from Surrey North on his comments. At the beginning of his remarks he made reference to the trade deal with the United States. How does he see the impact of the trade deal on the attack on our social programs in Canada today?
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James Capsey (Jim) Karpoff: Mr. Speaker, during the election and the trade debate in the fall of 1988, the government kept insisting that there was nothing in the free trade deal that was going to put pressure on the harmonization of social programs. Immediately the deal is consummated, we find that all of the social programs are being attacked, and they are being attacked in a manner that is going to bring them into harmony with the programs in the United States. They are reducing unemployment insurance. They are doing away with the universal old age pensions. They are scrapping universal family allowances. They are starting to erode our health care system so that we are going to end up with a patchwork health care system like the United States has.
They keep saying that, "we are just doing this because of the deficit", when the reality is that they knew that as soon as they consummated that deal, unless they started to harmonize our social programs, the United States had already served notice on them that it would bring forward actions to have our social programs deemed to be an unfair trade advantage, a subsidy under the free trade deal.
The government is not even willing to take the chance of going through that process and possibly losing at the end. It is taking the attitude that in case we lose, we might as well capitulate. We have seen that in fish. We did not even fight for it, we just gave up our whole processing industry in British Columbia. It is happening in steel.
One of the things they keep saying is that we are not doing it because of the free trade deal, we are doing it because of the deficit. A family that is earning over $100,000 is going to lose $270 per child by this clawback system. Let them keep their family allowance, tax it at a normal rate, but let us increase that marginal tax rate for the wealthy of 29 per cent to 32 per cent and that family would pay $2,250. This government has bought its rich friends another $2,000 in an unfair tax advantage.


Mr. Crosby:: Mr. Speaker, I would like to make a comment in view of the remarks of the member from Surrey North and the previous remarks made by my good friend from Ottawa-Vanier. There is always the danger as these speeches are made in the House of Commons that somebody in the gallery or listening on television
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may actually accept what is being said because it is not always directly contradicted. Anybody who reads the budget papers from April will know very clearly what the extent of this change is, though members have indicated to the contrary.
I want to record some of those facts before I put my question. There are 54,000 high income old age assistance recipients who would repay all of their benefits. This means that those people have incomes in excess of $77,000 net, after all the deductions, after they have taken off all of their preferential tax treatment.
It is so interesting to hear our friends from the socialist party get up in the House of Commons and object to the taxation of these people, to say that is wrong, that we are violating a sacred principle. What we are violating is a sacred cow. You cannot eat universality, you cannot wear it, you cannot put it in the bank. It is the obligation of the government to keep a sound treasury, to ensure that the nation is not bankrupt so that we can continue social programs. How ridiculous it is for members from a socialist party to stand in the chamber and defend people whose incomes exceed $77,000 a year and who are being asked to forgo a portion of the funds that they are getting from the public treasury.
I do not see why anyone would regard that as an unreasonable action, especially a member of a socialist party dedicated to the elimination of poverty, dedicated to helping those in need. Now they refuse to take from those who have in order to give something to those in need. Would you please answer that?


James Capsey (Jim) Karpoff: Mr. Speaker, the chairman of the finance committee expressed it well. It is sneaky what you people are doing because what you are doing is in fact making sure that your rich friends do not pay fair taxes. You could reduce the deficit. All you have to do is increase the marginal tax rate by 1 per cent and wipe it out. I do not care whether the money comes from one source or another, let us tax them all fairly.
The question is, why do you guys not raise the tax for the wealthy right across the board by 2 per cent? Then you will have a fair tax system. What you guys have done is-


Some Hon. Members:: Oh, oh!


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

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Hon. Jake Epp (Minister of Energy, Mines and Resources):: Mr. Speaker, thank you for recognizing me for debate on Bill C-28. I am sure that observers of the House, having seen the events of the last moments, would agree fully with a motion that I would like to move.
I give notice that at the next sitting of the House, immediately before the Order of the Day is called for resuming debate on the motion for second reading of Bill C-28, an act to amend the Income Ihx Act, and on any other amendments proposed thereto, I will move that the debate shall not be further adjourned.
I am sure Canadians observing the last moments can fully understand why the government is serving notice.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Paproski):: It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Glengarry- Prescott-Russell-VIA Rail; the hon. member for Cape Breton-The Sydneys-VIA Rail; the hon. member for Edmonton East-Banks-Alberta Business loans portfolio/Reversal of policy-Position of Minister.



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[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson (Etobicoke Centre) that Bill C-28, an Act to amend the Income Thx Act, the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act, the Old Age Security Act, the Public Utilities Income Tax Transfer Act, the War Veterans Allowance Act and a related Act, be read the second time and referred to a legislative committee.
Hon. Ralph Ferguson (Lambton-Middlesex):: Mr. Speaker, I am somewhat shocked and dismayed that the government would move so quickly to stifle debate on the bill before us today. It is a bill that is going to inflict unknown hardship on the elderly of this country and on those who worked to build this country to make it the great nation that it is today. To move so quickly to shut off debate on this contentious piece of legislation is not in the best interests of the people of Canada, and is taking away from the retirement of our seniors. It will inflict hardships on them that are not acceptable in today's society.
While I welcome the chance to add my voice to the torrent of those who are opposed to the bill, it is with regret that I rise to speak on this matter. Many people of this country believed the Prime Minister's claim that universality is a sacred trust. Further, I loathe seeing how his actions reflect on the respect that the people have for this House, for all members of Parliament and for the truth, as I am sure some of the members opposite are beginning to understand. The actions of the government in introducing this legislation reflect very poorly on all members, on Parliament itself, and on the very idea that this is an institution of truth and respect. Never before has the Prime Minister so blatantly stated one thing during a general election less than a year ago and done quite the opposite almost immediately thereafter.
In fact, on October 16, 1988, when in Summerside, he told the citizens of Summerside, P.E.I.:
As long as I am Prime Minister of Canada social benefits, especially those for the elderly, will be improved and not diminished by our government.
When in Summerside, did the Prime Minister tell the truth? Did he go on to attempt to explain that he would introduce a clawback, a mechanism that would slowly eat away at the very social benefits he said he would improve? Of course not, because he knew the people of Summerside and the people of Canada would recognize the truth behind his words, that he fully intended to dismantle universality.
Did the Prime Minister of Canada tell the people of Summerside that if re-elected, the next budget he would bring in would shut down their town, that he would move the armed forces base, that he would close down half of the passenger rail service in this country, that he would attempt to make unemployment insurance unworkable? Did he say that he would remove the underpinnings of the orderly marketing systems, that he would trade away
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the very livelihoods of farm people behind closed doors, that he would close up a total of 14 military bases? No.
He spoke of the free trade agreement. He said that it would ensure our social programs. The truth was, he was assuring corporate America with the free trade agreement, that we would remove those social programs because our neighbours to the south had nothing to compare with them.
Did he speak of the huge national debt that his government had inflated in the last five years? Did he say the deficit had increased in the last two years from $28 billion in 1987 to $29 billion in 1988-89 and to $30.5 billion in 1989-90? Did he say that the free trade agreement would cost the government $10 billion in lost excise revenue in a year and that that money would have to come from somewhere? It is obvious that some of it will be coming from the scrapping of the universality of our social programs, from a new tax on nearly all goods and services.
Did he mention that his government in five years is responsible for 50 per cent of the national debt since Confederation? No. He and his Minister of Finance hid the truth like a candle under a basket until November 22. They knew the economic record they had created and they knew how dismal that record really was. They knew they would push interest rates up, that they would overvalue our dollar. Even now the Minister of Finance would rather go to court than lift the basket, and release those studies that a newspaper applied for under the Access to Information Act, acting in direct contravention of that act.
The government neglected to point out that as every year passes, pensions become less and less secure and social programs will be less and less universal. The threshold today is $50,000, as outlined in the legislation. By the year 2000, if the clawback is left as it is, it will have fallen to the equivalent of $35,000. It will affect almost 30 per cent of all families that receive family allowance; that is, if the government does not accelerate the rate of the clawback.
The Prime Minister said this would not happen. But look at recent history in the country. The finance
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minister said when the individual surtax was introduced that it was temporary. Now this bill will make it permanent and raise it from 3 per cent to 5 per cent. The government said the clawback will not be increased, the goods and services tax will not rise from 9 per cent to 13.5 per cent like the present sales tax has under its stewardship. Yet taxes have increased 31 times under this government since September, 1984.
I remember on June 17, 1987, that the Minister of Finance told the country that when the new sales tax is introduced, the personal and corporate surtaxes will be removed. The Minister of Finance has introduced his sales tax so where is the bill to back up his 1987 statement? Where is the clause that removes, as promised, the temporary surtax? What does history show for the future, more of what we have seen since 1984? Does it show the clawback will not be accelerated, the general sales tax will not be accelerated, the once temporary surtax will not be accelerated? I think it shows quite the opposite, despite any assurance the government may offer at this point to the people of Canada.
The clawback is nothing more than a licensed theft. If a private corporation attempted to treat their old age pensions like this legislation is going to treat the old age security, they would be breaking the law. Canadians who paid tax in the early 1950s to 1971 paid a special surtax for their pensions. In fact, the 1979 tax guide stated: "All taxpayers whose taxable income is over $500 are subject to the old age security tax". To take this money back now on their old age security is the equivalent to theft, and the government wants to steal back some of that money. Just a little now, it says, as if that makes it okay.
What is being taken away is the very principle of universality, the principle that our tax system should be fair, a principle that is outlined in this bill and a principle that is depended on by scores of elderly here in Canada.
The chairman of the finance committee knows it. It is what he told his constituents. In a recent letter to one of his constituents he said:
We have decided to eliminate universality, and we do that in a sense that by the clawback in both family allowance and old age pensions. As you know, it has been a Conservative philosophy for some time that distributions from state ought to go essentially to those in need. While the clawback may be unfair and sneaky it is there.

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The clawback, like this government, is both unfair and sneaky, and the actions of the government are uncovering the candle of truth it tried to hide with its words. The government's actions admit what it did not say prior to November 21, 1988. It still will not admit that the government decided a long time ago to eliminate universality, to shut down VIA Rail, to undermine orderly marketing, to privatize unemployment insurance and to cutback universal medicare, and in so doing, change the Canada we have known for the last 122 years.
In that last 122 years since Confederation, Canada has developed as a nation of compassion, a caring nation, a nation that has cared for the elderly and less fortunate, a nation with a safety net that was available to society, a safety net that provided for health care so the elderly could live their retirement free of worry and want, a life of dignity. This bill will strip that dignity away from the elderly and the less fortunate of Canada, today and in the future. This bill is wrong, the clawback is wrong, the government is wrong.


Mr. Funk:: Mr. Speaker, I was very interested in the remarks made by the hon. member for Lambton- Middlesex. I think it is very important that we remember that what is happening here flies, as he said, in direct contradiction to the commitments this government made when it was out on the hustings looking for votes. There are a few aspects of the hon. member's remarks that I would like him to expand on a bit.
First, this government tries to persuade Canadians that one of its top priorities is to reinforce family life. I was wondering whether the member might comment on the effect of the particular approach they have taken to the clawback on the family allowances. A family with two incomes gets taxed in a much different way than a family with just one income, even if that income is at the same level. I would ask the member to comment on that.
Second, I would like to ask the member to comment on the fact that the government apparently sees this as a deficit reduction measure, a way to save money and deal with the fiscal problems of this country. I wonder if the member might comment on the justice that is involved in clawing back pensions and the family allowances as opposed to using other sources of revenue which the
government might look to in order to solve its fiscal problems.


Ralph Ferguson: Mr. Speaker, I want to thank my hon. colleague for the question. Perhaps I should deal with the family allowance portion of his question first. I am sure that he has a similar situation in his riding as I do in mine. My riding is a predominantly rural riding.
Because of government policies over the last few years, the farm income has dropped dramatically to the point where many farm families have husbands and wives both who have to seek off-farm employment in order to keep the farm operational and in order to subsidize the farm income. Having a clawback apply to their family allowances hits them extremely hard, because the money that they anticipated putting away for their children's education, money that they anticipated would be available for them to buy clothes, to buy food and the finer things in life, will no longer be available to them. In effect, what is happening here is they are robbing Peter to pay Paul. I think this is wrong. The people who are having, for example, to work off their farms, moonlighting if you want to call it that, in order to make ends meet and have large incomes that are being used as subsidies, should not be subjected to this. It is very unfair that this should have to take place in society as we know it today.
In terms of the deficit reduction, I do not think it is at all fair that the government should try to fight the deficit on the backs of the elderly and the less advantaged of this countiy. As I mentioned a few moments earlier, Canada is looked upon as a caring nation, a nation that looks after the disadvantaged and the people who do not have the same opportunities in one region as they do in another. I think it is blatantly unfair of the government to make such a move as this to try to fight the deficit. The deficit has been increasing and will continue to increase as long as the balance of trade continues to slip, not in favour of Canada, but in favour of our trading partners. Therefore, it is blatantly unfair that the older and the less advantaged in this country should be burdened with having to fight a deficit such as this government is running today.


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated. On debate, the hon member for Kingston and the Islands.


Peter Andrew Stewart Milliken: Mr. Speaker, in rising I want to indicate again my unhappiness with the fact that during the speech which the hon. member for Lambton-Middlesex just gave there was not a single minister of the Crown in this House. There is an obligation, it seems to me, Sir, that ministers of the Crown be-


The Acting Speaker (Mr. Paproski):: Order. There is a custom in this House not to say anything about the attendance of members. These ministers or members may be outside watching it on television, in the lobby or outside the lobby, or behind the curtain. I do see a minister in the House, but the hon. member should know.


Peter Andrew Stewart Milliken: Mr. Speaker, with great respect, I think that there is a tradition in this House that a minister be present in the chamber during discussion of government bills. That is the point I am trying to make. It seems to me, Sir, that that is an obligation.
We had a few minutes ago the spectacle of the Minister of National Health and Welfare waltzing into this House, standing up and indicating that he was going to move closure, then waltzing out again. I say, Mr. Speaker, that shows a contempt of Parliament unparalleled in our history. It is a shocking contempt when, after two days of debate on this bill, for the ninth time in this Parliament we have had notice of closure. No other Parliament in Canadian history has been so burdened with closure the way this Parliament has been under this Conservative administration, the fumbling and bumbling of which has resulted in this dreadful bill that we are debating today.
I can understand the Conservatives anxiety to rush the bill through because they do not want the people of Canada to hear how bad this bill is. They feel that if they can move closure on the bill and ramrod it through this Parliament, then there will not be speeches on the bill through which they as ministers will have to sit. The Conservatives know what we are saying is true. They do not want the Canadian people to listen to speeches that indicate the faults of this bill because Canadians might believe it and, the next time they get a chance, will vote this group out of office. Well they should, Mr. Speaker. There is ample reason for that on the basis of what we have heard today alone.
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The Minister of Fisheries is mumbling things from his seat. I invite him to participate in this debate and make his voice heard. Perhaps tomorrow night at one o'clock in the morning he can tell us about it.


Thomas Edward Siddon: Speak on the bill.


Peter Andrew Stewart Milliken: I intend to turn to the bill.
I want to make certain points, Mr. Speaker, with respect to the clawback provisions of this bill because that, in my respectful submission, is the most important and evil part of the legislation. It affects Canada's seniors and I am going to deal with that aspect of it. I am not going to deal with the clawback of family allowances although, as I will say at the end, most of the comments I make on the one could be applied mutatis mutandis to the other. I will stick to the clawback of the pensions, and I want to say certain things about that which I think are important.
First, the question of a clawback, in my view, is manifestly unfair. Speaker after speaker on this side, of the few we have had on this debate, certainly, and those on the budget when it was debated, have indicated the unfairness of this provision. Our leader, the Right Hon. Leader of the Opposition, in his initial address on this bill indicated his objection to this particular clawback arrangement.
I reiterate that one of the problems with the clawback is manifested by this example. I will indicate a suggestion to Your Honour and see if Your Honour does not agree with me that this bill is unfair in its application and in its treatment of the senior citizens of this country.
Ihke the position of a senior citizen residing in his own home, fully paid for-the Conservative dream I am sure. It is certainly the dream that we on this side of the House have espoused for Canadians-mortgage free, it is a valuable piece of real estate that is increasing in value every year. His income, including his old age pension, in our example is $50,000. Imagine if after a year or two this senior citizen becomes incapable of continuing to live alone in this home. The house is then put on the market and sold for, say, $300,000. If the person is living in Toronto, that would be easy. It would not be a very great home for $300,000 in the Toronto real estate market the way things have gone under this government.
The senior citizen sells the home, takes the $300,000 and invests the money at, say, 10 per cent. Then his income goes from $50,000 to $80,000. Clawback! That senior citizen loses the pension and moves into rental accommodation. Is that fair? Why should the senior

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citizen be penalized for moving into rental accommodation because the person is unable to continue to reside in his own home? Yet that is the effect of this legislation which the government has introduced.


Thomas Edward Siddon: Check the facts.


Peter Andrew Stewart Milliken: I have checked the facts with the hon. member for Etobicoke North, my colleague. He knows the facts and he is well aware of what is in this bill. If the Minister of Fisheries disagrees with my assessment he should make a speech because I am right, and he knows I am right on this point.
The clawback will set in and the senior will be deprived of the income from that pension. Mr. Speaker, you are a man of sense. You must agree that this particular provision is unfair, unreasonable and ought to be stricken from the bill.
In addition, I invite you to consider the costs of this particular system. The government says that universality is a sacred trust, pensions are a sacred trust so we do not want to breach our obligation to the electorate. They tried and there was such an outcry that the Prime Minister himself backed off and ordered the Minister of Finance to recant his heresy and withdraw the changes to the old age security pension that were introduced in the Parliament before this one.
Now instead of trying to do it by the front door, the Conservatives are doing it by the back door. Instead of taking away the pension, they say that they will give you the pension but they will tax it all back. That is what they are doing. That is what this is all about.
I want to take a look at the costs of this little proposal of theirs. I have taken a quick glance, with assistance, at the Estimates. I did a quick calculation. I went into the Estimates and I looked at the cost of administering the Department of National Revenue. I looked at the cost of the taxation branch which amounted to the pretty sizeable figure of $946 million. That is what it costs to administer the tax system in this country. That is for all the tax police. I took 80 per cent of that, because 80 per cent of the combined personal and corporate taxation is, in fact, personal taxes in this country. Eighty per cent of
the $946 million yielded a total cost of $757 million to administer the income tax portion of our tax system.
That does not include-I want to stress this-the administrative superstructure of the Department of National Revenue; the minister and his car allowance, the deputy ministers and their allowances, the various administrative personnel at the top of the department who do not specifically assign any portion of their costs to this taxation branch. If you do that simple arithmetical calculation on budget figures, not on actuals, I think you will find the cost of raising a tax dollar in Canada is about 7.5 cents. For every dollar the government raises it pays out 7.5 cents to collect it.
Then I did a similar analysis for the cost of paying out the old age pension. The government administers pensions worth almost $12 billion per year according to the 1989-90 Estimates. The costs of administration of those pensions, again according to its Estimates and again without any of the superstructure of the Department of National Health and Welfare, amounted to about $56.35 million. So, the cost of paying out the money to the Government of Canada in the form of old age security pension cheques amounts to 2.1 cents for every dollar paid out.
Under this new scheme, the money is not taxed in once, it is taxed in twice, because the government is going to tax the money first, pay it out and then tax it all back. In fact, you have to double the cost of collection from 7.5 cents to 15 cents and add the 2 cents on for the payment out. You get about 17 cents for every old age security tax dollar that is dealt with in this double-barrelled system the government is proposing.
I know the Minister of Fisheries and Oceans will be working these figures out in his head and double checking my arithmetic.


Thomas Edward Siddon: That's oversimplified.


Peter Andrew Stewart Milliken: It may be oversimplified but I have not added in some costs that I cannot calculate. Perhaps the Minister could have the officials of the Department of Health and Welfare do the calculations, and I invite him to do so. I think if he calculated the cost of the loss of interest on the money during the time it is paid out and paid back he would find there is an additional cost. He should add in as well the cost of hiring the extra tax police we will have to hire in Canada to administer the new taxation laws because here we are adding another 84
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pages or so to the Income Tax Act of Canada, which is already enormous. Everybody knows the Income Thx Act is too complicated, except the Minister of Finance and the people advising him, who seem to make it more complicated with every passing year, and obviously his supporters on the back-bench who talk about the virtues of tax simplification and do everything they can to make it more incomprehensible and complicated.
I say that in all those circumstances the minister has done nothing to improve the tax law. He is going to have to hire more people and those additional persons are going to drive up the costs I have referred to of 17 cents on the dollar. It is going to go up, it is not going to go down and the ministers of this government are well aware of that fact.
I think those are reasons enough to consider rejecting this unfair tax but, as I said at the outset, every single one of the comments I have made in relation to old age security could be applied to the family allowances. Without having done the calculation, I would wager with any of the ministers present that the costs of administration of that program are higher because the amount of money dispensed under it is lower, and I am sure that more people, based on the dollars spent, are working in that particular branch or area of the Department of National Health and Welfare.
I think that the difficulties I have outlined with this tax and the difficulties I have outlined with this clawback provision, its unfairness, its meanness, its nastiness, and its inability to adjust to the changing circumstances of Canada's seniors in the 1990s, all dictate to us as members of parliament that we ought to reject this tax and vote against this bill.


Thomas (Tom) William Wappel: Mr. Speaker, I would like to compliment my colleague from Kingston and the Islands for his usual analytical, logical and lucid discourse here in the House this afternoon.
I would like him to turn that analytical mind of his to the following comment that I have leading to, I hope, a question, because he was in fact dealing with the clawback. One of the interesting things in the clawback is the $50,000 limit. If we look at the analysis behind that we see, and many members have spoken on this, an inherent unfairness or discrimination in the treatment of
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that net $50,000 figure, particularly if we are talking about a one-income family as opposed to a two-income family. We can see that as it is presently set up we have a situation where a two-income family, with each person earning under $50,000, would end up not being clawed back. I would ask my friend from Kingston and the Islands to comment on that and on the obvious inherent lack of fairness of that provision.


Peter Andrew Stewart Milliken: Mr. Speaker, I thank my hon. friend from Scarborough West for his kind intervention. I know that he has had concerns in his riding with this problem. I know that seniors in Toronto are very concerned about these provisions. I have had the same difficulty in my riding so I know that the question he asks is based on sound experience. What is surprising to me, I guess, is that none of the Conservative members of this House have seen fit to criticize this measure, seniors in their ridings across this country, yet we have heard not a single murmur of disapproval. I guess it is fear of the Minister of Finance and his wrath that dissuades them from making these criticisms.


Mr. Gardiner:: It's too bad you can't call them trained seals.


Peter Andrew Stewart Milliken: Yes, as my hon. friend says, it is too bad they cannot be called trained seals, but it would be unparliamentary to refer to them in any such way.
I want to answer the question. In my view the suggestion that my friend made as to unfairness in the administration of this tax is manifest in the way that it will be applied to both single-income families and double-income families. My concern is that the single-income family that receives in excess of $70,000 will suffer the clawback, whereas the double-income family, neither member of which receives the $50,000, will be much better off because there will be no clawback. As a result, the double-income family will have a larger income.
I stress the unfairness of that. It is another example of what I was suggesting earlier in relation to the house sale because if there were two family members each earning $50,000, the household would have a net income of $100,000, without any clawback. However, if one member of the family was earning $80,000 and the other was earning nothing, the clawback would apply, and obviously that family would be much worse off than the other with the two incomes. It indicates, in my view again, a

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manifest unfairness that on any basis should result in rejection of this bill.


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated. On debate, the hon. member for New Westminster-Burnaby.


Dawn Black: Mr. Speaker, I rise today to speak against Bill C-28. This bill does involve the clawback of old age security and of family allowance. It is an attack on the seniors of Canada and on the mothers of Canada.
I would first like to address the issue of the special tax on seniors. Fifty-eight per cent of Canadians over the age of 65 are women. These women, for the most part, belong to a generation characterized by low paid labour force participation and, therefore, low pension income. They have raised children and they have contributed over 40 years of valuable unpaid work to our society. Now the Conservative government is again attacking their pensions. The Tory government is saying to these women that their contributions over the years in building Canada, in making this country what it is, are not worthwhile.
I want to tell the Prime Minister that the contributions of which older women have made to this country are valuable. The last attack on seniors was the Prime Minister's attempt to de-index old age pensions. We saw then a powerful movement of seniors. They refused to give up their rights and they refused to be bled dry by this government. This proposed clawback of pensions is another angle that this government is taking to chip away at seniors' pension rights.
Although the government was not successful in de-indexing old age pensions, it did partially de-index family allowances in 1985. This bill constitutes another attack on the family allowance program in Canada. The government made family allowance worth less and less each year in terms of real spending power and now it will tax back what is left. It is just one of the many ways that this government is telling the women of Canada that bearing and raising children is not really important in our society.
It is amazing to me that on the one hand the government is almost attempting to force women to have children through threatened restrictions on abortion and recriminalization, through the slashing of family planning education, through the lack of commitment to research into safe and effective means of contraception, and on the other hand, it is taking away financial support from mothers who have children. Family allowance cheques are the only means of federal income support that goes specifically to mothers.
The universality of our carefully constructed social programs is in jeopardy. The old age security and family allowance programs are the victims of a free trade budget, one that seeks to harmonize our social programs with those of the United States. What we are now witnessing is the Americanization of our social programs and the end to universality.
We need to build a country in which the contributions of parents are recognized. We still live in a society in which women are expected to make personal sacrifices for their families. Women are far more likely to interrupt their paid work to take care of children. Close to 74 per cent of married women in a Statistics Canada survey cited family considerations as a reason for their first work interruption. Family considerations were a statistically negligible factor in the pattern of men's work interruptions. Women suffer financially for doing one of the most important jobs that there is in our society, that of raising the children. This government is making it more difficult for families with children to make ends meet. Women earn, on average, 66 per cent of what men earn in the paid labour force. Those with children need the supplementary income that the family allowance provides.
This government gives two arguments in favour of robbing seniors and mothers by plunging its greedy hands into the pockets of older people and children. I would like to deal with both of them. One argument is that we just cannot afford to treat people fairly. We just cannot afford universality, the Tories say. The Finance Minister sings his familiar tune about the deficit, about the strain on the public coffers. I ask the government why it is not taxing the large, profitable corporations in Canada that pay no tax rather than the seniors and the mothers of this country. I ask the government why it signed the free trade deal which is not only costing Canadians their jobs, but has also resulted in a loss of $2 billion in government revenues due to the lifting of tariffs.
October 17, 1989

I know that the money must come from somewhere, Mr. Speaker, but I disagree with the government's decision to milk it from seniors and from mothers. In this bill there is a provision for capital tax on large corporations, not an income tax. This tax is applied to capital at a rate of 0.175 per cent on corporate capital in excess of $10 million. I only wish that all Canadians had as good a deal. We need a minimum tax on corporate profits to catch all large, profitable corporations which currently pay no taxes.
The other lame argument is that only the rich are affected. This is untrue. When universality is corrupted everyone will suffer. What was once seen as a right becomes a privilege for the poor. Pensions and mothers' allowances become charities. And since the cut-off point is not fully indexed to the rate of inflation, every year poorer and poorer people are affected. Well-off seniors pay today, middle-income seniors pay tomorrow, and the next day it will be the poor seniors.
The average family income in Canada is about $45,000. Individuals with income $6,000 higher than the average family income will begin to lose their social benefits. As time passes, through inflation more and more Canadians will be caught in the Tory tax trap. The clawback will catch about 128,000 pensioners by 1990. In 20 years over one million pensioners will have to pay back their pensions. If inflation rises by 4.5 per cent next year, the cut-off figures rise by only 1.5 per cent. It does not take a great mathematician to see plainly that most seniors will one day be forced to give up their pensions.
It is not only today's seniors who must fight this outrageous attack on pensions. Those who will be paying most are today's young people who may have no Old Age Security pensions at all by the time they retire. A similar fate awaits mothers who are receiving family allowance. Already a pitiful sum, in 1990 14 per cent of families will have their family allowance clawed back. In 10 years this figure more than doubles to nearly 30 per cent of Canadian families.
The more Tory government that our nation has, the poorer average families in Canada can expect to be. The targeting of family allowance for clawback means that a family with children and an income of $70,000 a year will be paying more tax than a family without children with the same income. This demonstrates clearly the Tory
Government Orders
commitment, or lack of commitment, to families and to children.
This bill has been formulated without consultation with seniors and without consultation with women. The government refused to meet earlier this year with representatives of more than 500 women's groups who came to Ottawa specifically to talk to the government. This government thinks it can just ignore seniors and just ignore women. It believes it can bring in severe and regressive economic policies without repercussions from those most affected, from those who are impoverished by them.
This government and this Prime Minister cannot be trusted. In 1984 the Prime Minister said: "We are in favour of universality in social programs and it shall not be touched". In 1988, before the election, the Prime Minister said: "Let me say a special word to the senior citizens. In 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 for Canadians".
This government promised not to touch social programs. It has no mandate to decimate social programs the way it is doing now. Before the last election this government promised free trade would not affect our social programs. The government has no mandate to Americanize our social programs. This is a despicable way of worming into a universal program and destroying it.
This is why I have risen today, along with my other New Democratic Party colleagues, to protest the passing of this bill. I will join my colleagues and other activists outside the House of Commons to put a stop to this attack on our social programs and to end this discrimination against mothers and against seniors.
Not even all the Conservatives ignore the effects of their actions on seniors and women. The Tory finance committee chairman wrote: "We have decided to eliminate universality. While the clawback may be unfair and sneaky, it is there". I ask government members to reconsider their unfairness to seniors and to women, to change their minds about dismantling our social programs, to realize once and for all that seniors and mothers should not be made to pay for Tory mismanagement of our economy.

October 17, 1989
Private Members' Business


The Acting Speaker (Mr. Paproski):: Questions or comments, the hon. member for Prince George-Bulk-ley Valley.


Brian L. Gardiner: Mr. Speaker, I listened with great interest to my colleague from New Westminster-Burnaby who gave a very excellent speech on the impact that this bill is having and the shilly-shallying we are getting from the other side.
I have a quick question to the member and it has to do with universality, a lot of which we heard about today. The members opposite talk about the bank president who gets all of these benefits through our universal programs. I would like her to get up if she could and just comment on a definition of universality. What does it mean to us in Canada? What have we fought for in this country? What are the Conservatives doing to destroy universality?


Dawn Black: Mr. Speaker, I thank my colleague from Prince George for his question. Universality, of course, means that all people in our society should be eligible for the social programs like family allowance and old age pensions. We know that if there were a fair tax system in this country then all income would be taxed at a rate fair to our citizens. If you were at a very high income level, yes, you would pay more in tax, but all of your income would be included. It seems rather bizarre that in this policy to claw back the family allowance and to claw back the old age pension, some families will be taxed at one level while other families without children will be taxed at another level.
The whole idea behind universality is that it is universal. There is no means testing. It has dignity for all of Canada's citizens. This, I fear, Mr. Speaker, is what we are losing with this proposal to claw back.


The Acting Speaker (Mr. Paproski):: It being 5 p.m., the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.



PRIVATE MEMBERS' BUSINESS


[Stage Direction]
WESTERN GRAIN STABILIZATION ACT Mr. Vic Althouse (Mackenzie) moved:
That, in the opinion of this House, the government should consider
the advisability of introducing measures to amend the Western Grain
Stabilization Act to include coverage for producers who feed their
own grain to their livestock.
He said: Mr. Speaker, I rise today in private members' business to discuss a proposal which I have before the House as Motion No. 310, which asks the government to consider the advisability of introducing measures to amend the Western Grain Stabilization Act to include coverage for producers who feed their own grain to their livestock.
The reasoning behind this is that I and many other Canadians in the agricultural business feel that there has been a form of discrimination in the way that we have formulated our stabilization laws over the past 30 or 40 years.
At the outset let me say that I had intended that this legislation would cover all of the stabilization acts in the country, but there was apparently a drafting error in that I had intended the motion to include not only Western Grain Stabilization Act but also the Agricultural Stabilization Act. Since I cannot amend my own motion, subsequent speakers, I presume, will be so doing. For purposes of my opening remarks, I would like to consider that both forms of stabilization program be included in the discussion.
I think that 40 and 50 years ago in Canada, agricultural economists and policy-makers seemed to be of the opinion-and this was the era when I was very young- that they had to provide policies that would encourage producers to focus on the production of a few items instead of the broad range of family farm production. There was a tendency among the bureaucrats and some of the politicians of the day to encourage the concentration of production into a few commodities.
Since that time, both the agricultural community and even some of the bureaucrats have noted that there are some problems going in this direction, because one can go too far. What we are left with is a series of policies that still encourage the production of single crops, or very few crops, and the encouragement of specialization into a very few commodities being produced on any one particular farm.
This has created some problems, both at the farm level and in rural communities, because by going too far in this direction we have ended up with programs like the Agricultural Stabilization Act and the Western Grain Stabilization Act, which presume that everyone should be producing grain for sale and not for secondary production on their own farms. In other words, they are
[Stage Direction]
discouraging the secondary production at home and the adding of value to grain and forage production at the farm level.
The effects on the rural community have been quite noticeable. If we worked in a system that encouraged add-on and secondary production at the farm level, we would find that more people can be employed on fewer acres than is the case where you encouraged the specialization of grain production alone. Very few people on a great many acres is the result, and rural communities fade and die and, in fact, have disappeared on much of the prairies and other parts of Canada as well, but particularly on the prairies.
That has been encouraged in part by the view of stabilization that has been obtained since the early 1950s and which is reflected in the Agriculture Stabilization Act and in the Western Grain Stabilization Act. The result has been that we find some rather silly inequities.
During the past number of years there have been fairly large payouts under the Western Grain Stabilization Act and under the Agriculture Stabilization Act on grain because the grain market was very depressed. Those farmers who produced their grain for sale off the farm received relatively large subsidies to help offset the difference between the very low market price and their relatively high production costs. The result was that producers who were in grain only tended to get paid almost all of their production costs after the stabilization payments were received.
However, those producers who chose instead to feed all or part of their grain on the farm and engage in secondary production, which is good for the economy, better for the environment, and has a host of good social objectives tied to it, were in effect told by the signals from the law regarding stabilization payments that their type of production was no longer needed and was not appreciated. The effect was that they received less money for their grain production than their neighbour down the road.
There were ways around it that some enterprising individuals used. Some divided their cattle feeding, hog feeding, poultry or dairy operation from the grain producing sector and purchased it as a separate entity and made the grain production eligible thereby for stabilization payments. In general, people who fed their own
Private Members' Business
grain were feeding relatively high cost grain in competition with feeders who were buying grain at the market price which was lower cost to the feeder who was purchasing the grain. His costs were actually lower than the cost to the person who was growing his own under those conditions. That set up an unfair situation which I think government policy should not be encouraging to continue.
A number of organizations have pointed out the unfairness of this from the UPA in Quebec, I'Union des producteurs Agricoles, and the Canadian Pork Council which represents all of the provincial marketing boards across the country. I could go through the rather long list of organizations that have indicated that changes to these stabilization programs are needed, including the Ontario Federation of Agriculture, the Christian Farmers Federation of Ontario, the Ontario Cattlemen's Association, the Ontario Chicken Producers Marketing Board, the Ontario Egg Producers Marketing Board, the Ontario Milk Marketing Board, the Ontario Pork Producers Marketing Board, the Ontario Sheep Marketing Agency, and the Ontario Turkey Producers Marketing Board, just to mention the groups in Ontario. National groups include the Canadian Federation of Agriculture, the National Farmers' Union; regional groups include the Prairie Pools Incorporated and others that I have already mentioned.
Various academics have looked at the question and have concluded that the stabilization payments should include farm-fed grain.
Daryl Kraft, an economist from the University of Manitoba, recommended that in his March, 1988 study of the Income Stabilization and Eligibility of Farm-fed Grain. One of the options under the Grains 2000 report included a farm-fed grain option being part of the stabilization program. Indeed, the need for farm-fed grain being included in stabilization programs is universal enough that there is no argument needed to convince legislators who make up this House as private members that it is needed.
The cost disadvantages have been quantified by various studies. Whether the study by Daryl Kraft is used, or
[Stage Direction]
October 17, 1989
Private Members' Business
the study from the Ontario Park Producers Marketing Board, there are a variety of ranges of figures for the various commodities. Just to give you some idea of what sort of disadvantages this particular administration of the stabilization programs can produce, Mr. Speaker, I suggest you look at the figures provided by the Ontario Pork Producers Marketing Board. They estimated that producers who grow their own feed are at a disadvantage compared to producers who buy feed of about $6.30 per hog or 7.7 per cent of their cash costs. They state that the economics of the situation will dictate a move both away from land based operations and towards large integrators who buy their feed, or even to a movement of hog production completely out of the province. That is the problem.
A similar distortion exists in the poultry industry, in the dairy industry, and in the beef industry. It is there. I will not go on boring you with a series of numbers, Mr. Speaker, I have some that would show that in the cattle industry the losses per head are much larger than with pork.
The only thing that has held back legislators and administrators up to this point was that previous to three or four years ago they could not see any workable way of administering this kind of a program. I submit that there are now several provinces that have been experimenting with programs to pay producers under slightly different programs. The administrative procedures that they have come up with would work in administering the stabilization acts that I mentioned in my remarks.
The province of Alberta has provided a system whereby it has attempted to pay the so-called Crow benefit to producers. I do not agree with the payment of that benefit as a matter of policy, but Alberta has created an administrative procedure which is possible to copy. It has simply computed the conversion factors for grains into beef, into litres of milk, into dozens of eggs, into pounds of poultry meat and decided that if the farm can show that it has produced x number of pounds of production of those commodities it will simply apply a mathematical formula to that and arrive at a presumption of how much farm-fed grain must have been consumed on that farm in order to have that level of production. It deducts any feed purchases from that and the difference is a farm-fed grain. The subsidy is paid on the basis of the tonnes of grain that are produced from that formula.
The formula is there. The administration has been tried in Alberta and is now being copied under similar programs in Saskatchewan and in Manitoba. That formula could be applied under the Agricultural Stabilization Act and under the Western Grain Stabilization Act to provide a payment for farm-fed grains, with the result that there would be no discouragement on the part of government programs. There would no longer be discrimination against those producers who chose to feed livestock, or poultry, or dairy cattle on the farm. It would stop being an impediment to the continuation of secondary production at the farm level. It would permit those communities where the individuals so wish to engage in value-added production at the farm and in their own communities.
This has good implications for the social fabric of those rural communities, and also for the total environment for all of us, because it would tend to disperse livestock production, making not only the accompanying smells easier to deal with, but the accompanying by-products and manure easier to dispose of and more available and useful to the soil for incorporation to continue the production cycle.
It has the advantage of being acceptable in a social context, in an environmental context, and I believe, since it has all these things going for it, that it is also high time that it was acceptable in a political context. The House, as private members, should approve the motion as it should be amended and recommend it for immediate action to the government.
Mr. Geoff Wilson (Swift Current-Maple Creek-As-siniboia):: Mr. Speaker, Canada's grain industry has been faced with a number of economic pressures in recent years. World grain subsidy battles, heavy debt loads, and drought have created hardships for agriculture and rural Canada. The agricultural trade environment is changing rapidly. In dealing with these facts, we have relied to a large extent on ad hoc government support programs. Farmers clearly need the assistance to improve their long-term financial stability.
Farmers across the country agree, as well, that there has to be a better way than the ad hoc methods that we have fallen back on over the last few years. There is also a general agreement that whatever we do, it must be
October 17, 1989

Private Members' Business
consistent with our international efforts to reform agricultural subsidies.
In recent years support programs have paid out very large amounts. Crop insurance payments last year were close to $1 billion. The Special Canadian Grains Program paid $2.1 billion in two years to offset low grain prices brought on by those international subsidy wars. Payments under the Special Canadian Grains Program were made on a wide variety of crops, and farm-fed grain was included.
This year, the Canadian crop drought assistance program paid out $850 million to help farmers who suffered drought losses in 1988. We have in that drought program a graphic illustration that no matter how you design an emergency program, there will be perceived inadequacies and cries of unfairness. The administrators of ad hoc programs have to develop artificial criteria, criteria outside of the market-place and, therefore, unreal. They have to draw lines. Some individuals find themselves on the wrong -side of the line. If the lines are moved, adjusted, or redrawn, there are still an equal number of people who find themselves on the wrong side of the line who may harbour feelings of unfairness.
Ad hoc programs, like special grains 1 and 2 and the crop drought assistance program, as well as the contributory programs, like crop insurance and WGSA, have delivered huge sums of money which have helped to keep the prairie grain sector afloat over the past several years. Indeed, the recent Economic Council of Canada report, which is entitled "Canadian Prairie Farming, 1960-2000" at page 8 states:
In the wake of the sharp decline in world grain prices and of the international grain price war, the Canadian government provided additional support to prairie farmers. In 1987, direct payments under the Western Grain Stabilization Act and the Special Canadian Grains Program amounted to $2.2 billion, or roughly $17,000 per prairie farmer. Direct and indirect payments under numerous other federal and provincial farm programs added roughly another $1.8 billion, bringing the total up to $4 billion, or about $31,000 per farmer. Thus, during the most recent years, government support accounted for nearly all of the net farm income on prairie farms.
There is no question that that historic level of support was entirely justified. One would hate to imagine the state of rural Canada without those programs.
The fact is that emergency programs cannot possibly be fine Tuned down to the point where they are deemed to be absolutely fair for every single producer. It is simply not possible to reach perfect fairness and equity between individuals under ad hockery, any more than it is possible to have perfect fairness and equity between producers in-sofar as the effects of weather or climate are concerned.
The bottom line is that we must develop better long-term programs for Canadian agriculture, programs like enhanced crop insurance, programs like a contributory income assurance plan so that participating producers can exercise some independence of judgment and tailor safety net programs to suit their own needs, programs that work so that ad hoc, emergency type programs will not be needed in the future. That is the desire of this government and of the farm community generally. We look forward, with anticipation, to seeing the results of the current agricultural policy review.
The issue we are discussing today, inclusion of farm-fed grain in the western grain stabilization program, is not new. Western Canadians have argued that farm-fed grain should be included. The western grain stabilization program provides protection to farmers based on the amount of grain they sell. If they feed their grain on their own farm, they do not have the eligible grain sales necessary to contribute levies to WGS and ultimately to receive payments. This inequity is a major cause of concern to farmers. Large payments through the program in recent years have heightened awareness of the situation. Farmers in other parts of the country want changes too. For instance, maritime farmers who feed a major portion of the grain they produce to livestock want stabilization; so do Quebec and Ontario producers.
The matter of inclusion of farm-fed grains was discussed by the agriculture committee of this House in January of 1986. In the report that was filed by that committee, farm-fed grain was considered and this statement was made:
It should be only for the final products marketed that the producer receives market risk protection under the WGSA or the ASA. In the case of livestock producers, they face the livestock market but not the grain market risk. Treating livestock producers as grain producers means the grain may be covered in the raw form and again as it goes into the final product.

October 17, 1989
Private Members' Business
There was mention of a possible double benefit, depending on conditions. There was also mention made by the committee benefit and, of course, of verification of sales, to say nothing of the cost. The recommendation at that time was that undesignated sales remain ineligible under the WGSA.
Nonetheless, with farmers in all agricultural regions of the country asking for change, it is clear that a broad look has to be given to this issue. That is exactly what is being done. A major review of grain income stabilization began over a year ago. This review is examining options for a national stabilization program for all farmers. It is an attempt to treat all farmers in an equitable way.
The review process began in the summer of 1988, when representatives of government met with farm leaders in all regions. Through these meetings, government was provided with guidelines which were used to develop options for a new stabilization scheme. A number of options for stabilization were subsequently developed by Agriculture Canada's national grains bureau in Winnipeg. These options were presented to farm leaders who met again in Winnipeg last January. The farm leaders indicated they would continue to discuss options for grain stabilization with their members.
One message that came through clearly in these meetings was that the farm groups favour a national approach to grain stabilization. They want that approach to be as fair as possible to all producers, and they want the issues of eligibility and production neutrality addressed. The process has been productive and it continues.
In the meantime it should be understood that this government has already taken some steps to provide better income stabilization for farmers. Of course, further reforms are being looked at, but I think we should outline the progress that has been made. This government, back in 1984, made a commitment to improve the WGSA and that commitment was met. In February of 1985, the act was amended to allow for timely interim payments to be made before the end of the crop year, in time to assist farmers with their spring seeding expenses. Since the amendment, interim payments totalling about $2.4 billion have been made.
Significant improvements were also made to the WGSA in 1988, amendments designed to encourage greater participation in the program and to put it on firm financial ground. These included a $750 million federal write-down of the WGSA's deficit. Without this writedown, the future of the program was in doubt. Nine crops were added to the list of crops eligible for contribution. Amendments also raised levies in the jointly funded program. Tb encourage more farmers to join, a 10 per cent penalty for rejoining producers was removed.
These changes to WGSA were made as part of this government's strategy to strengthen and improve the safety net system for grain farmers.
We are currently involved in a review of every facet of Canadian agricultural policy. Grain stabilization is just one area that this government is looking at with a view to the future.
In closing, I want to commend the member for Mackenzie for again raising the matter of farm-fed grains. It is an old problem but one that ought not to be overlooked. It is a difficult problem. It is being examined and hopefully can be addressed in the over-all policy.
Finally, I want to say a word about Bill C-36, the advance payment for stored grains legislation. We all know that Canada faces a very difficult national debt problem and the interest payments to service that debt, created by past governments, are choking the ability of governments today to be able to deliver the programs that farmers need. In order to cope with that deficit, an interest payment problem, all departments of government were asked in the budget this spring to make some sacrifice in the national interest. One of the things that agriculture was asked to give up was the interest fee provision for advance payments.
Many of my constituents are now telling me that they recognize the fact that the budgetary decision had to be made. Some may not like it but they do understand it. What they cannot now understand is the failure of this House of Commons to effect speedy passage of Bill C-36 in order that cash advances can be drawn.
This government is ready, willing and able to effect speedy passage of Bill C-36.1 urge my fellow members and colleagues to support speedy passage in order that
October 17, 1989

those farmers who wish to take out cash advances on farm stored grain can do so.
It seems to me at this point that the stalling of that legislation, for whatever reason, partisan or otherwise, is not in the best interest of producers. I urge my hon. colleagues to co-operate with this government and with the farm community in this regard by co-operating in regard to Bill C-36.


Mr. David Walker (Winnipeg North Centre):: Mr. Speaker, I appreciate this opportunity to join in this debate. I certainly hope that I do not follow the habit of the previous speaker who forgot what he was talking about half way through his speech. The NDP is asking us to support the motion that the government should consider the advisability of introducing measures to amend the Western Grain Stabilization Act to cover what we commonly call the farm-fed program.
When the member spoke he turned his attention to Bill C-36. The government has continually used Question Period to ask itself why the opposition is opposing it. Perhaps if the government looked at what it is trying to do, it would find that the opposition has some very good reasons for opposing that legislation. I am not going to take the time of the House to review what is already well-tread ground, but will simply state that there is every reason not to turn over to the government right now our support for Bill C-36, and we will continue to oppose it until the government agrees to our amendments.
The issue of helping out the family farm is one that has been very much on the minds of western Canadian politicians for some time now, and I can only add my own voice to our concern. You begin to say to yourself, how is it that the family farm got into so much trouble? I think we have to turn ourselves back to the strategy followed by this government for the last five years.
The most important cornerstone of the present strategy of the current Conservative government is to try to force the farmers into an international market in which they cannot compete. What we are seeing, for example, in the free trade legislation, is one measure after another by the Americans to undercut the family farm. We see the pork producers in western Canada under tremendous strain. We see that the provincial government of
Private Members' Business
Alberta has had to bail out one producer while another producer in another community was laying off people.
We have seen the farmers in Quebec complain about new regulations under free trade. We have seen the concern by the dairy producers. In fact, the Deputy Prime Minister has had to strike a special committee to try to untangle the mess that has been created by a combination of free trade legislation and GATT rulings.
We are also beginning to see more problems in the poultry industry as a result of measures not taken by this government. Once the farmers in that particular sector of the agricultural industry see that they are going to be under equal stress, I think will have the makings of a major revolt against current Conservative policies.
As many will remember, this is the party of Diefenbak-er. This is the party which stood originally for the western Canadian farmer. Once again, we see them abandoning the very constituency that they used to build their power base in Canada. That is why the Reform Party continues to remind western Canadians that the Conservative party no longer represents the interests of the farmer and of people in Alberta. I think we will see one vote after another until this party changes its strategy and begins to listen to the opposition from all three parties on this side of this House. This government will be in considerable difficulty there.
There was an article in The Winnipeg Free Press recently about the stress on the family farm. For example, as the push comes on the farmer from the bank, from the lack of price support and so forth, at least one person if not both people are forced from their farm to take part-time work. In rural areas in western Canada women in particular are being forced to leave their traditional roles, sometimes against their will, to take on other roles in the community. I think that should be studied by the House. I hope that the agricultural committee will take on some initiative in assessing just how the family farm is being pushed around by this government.
The stress is also felt by the very fact that so many western Canadians spend their winters and their falls undertaking special seminars. For example, next week in Brandon, Manitoba, for the second time, the weekly newspapers across Manitoba are sponsoring a seminar to

October 17, 1989
Private Members' Business
talk about stresses on farms to see what they can do to change the present regime.
Our party supports the motion, as I stated at the outset, but there is some difficulty. Perhaps, if the government had listened to the opposition back when it was discussed in the agriculture committee in 1986 as the previous member stated, we would have been able to come to some agreement on how to best monitor the farm-fed issue.
We must set up some regulatory regime which does not overwhelm the farmer but somehow sets out a control mechanism so farmers can begin to act more independently while there is a true costing arrangement and a true stabilization process involved that does not cause the government to have to expand its workforce or cause farming families to have to increase their paper load.
It is not clear from the motion that its movers understand fully just how complicated it is from this point of view. I can only hope that as this debate continues through the House in the coming months we will be able to clarify the best ways of helping the farmers out on this particular issue.
Farm-fed grains are currently not included under the Western Grain Stabilization Act. The Grains 2000 study which this government is supposedly using to formulate agricultural policy in this area has recommended that farm-fed grain be included under the Western Grain Stabilization Act. Those policy makers who are examining the move to a tripartite system for crop insurance and income stabilization programs feel that farm-fed grains should come under the act. Mixed farmers would certainly appreciate a little help as they try to deal with the economic hardship caused for the most part by the misguided economic and agricultural policies of this government.
By adopting this motion we will create the opportunity to help mixed farmers with their immediate problem. By allowing them to receive a benefit for farm-fed grain, they will be able to keep their herds at a level that is dictated by a market need instead of a financial crisis which they are all in. The reality is that there will be no help coming from the Progressive Conservative government and its Prime Minister.
In particular, I hold responsible the Deputy Prime Minister who should know better, given his criticism of governments dating back to the mid-1970s. The Western Grain Stabilization Act no longer serves the western grain economy. Its only reason for existing is to serve the crass political manoeuvring of a government known for its intellectual corruption as much as for its lack of compassion.
So far this year there has been no payment from the Western Grain Stabilization Act. It is unlikely that there will be any payments later this year. Last year, before the election, the western grain stabilization program made record payouts to farmers. When we consider how the government this year is claiming to be so cash short, it is odd to remember just how easily it was able to find moneys last year, whether we are talking about this particular piece of legislation or the western diversification fund. After the election, it was discovered, lo and behold, that the government used the wrong formula and overpaid the farmers who received benefits from the program. Surprise, surprise.
The government sent out notices telling the farmers that they had to pay back all the excess funds. This is the new Tory philosophy: they do not have to buy votes; they only have to rent them.
This government must come to its senses: stop playing the cat and mouse game with farmers and start coming up with policies that will help strengthen our farm sector. In this vein we support the motion.


Raymond John Funk: Mr. Speaker, indeed it is a pleasure to stand in the House and actually whole-heartedly endorse and support the motion by the hon. member for Mackenzie, my colleague from Saskatchewan.
I was not quite sure, in listening to the remarks from the member for Swift Current-Maple Creek-Assini-boia speaking on behalf of the government, whether in fact government members intended to support this particular motion. I got the distinct impression that they were not going to and find that very disappointing.
Not only did I find his remarks disappointing in that he implied there would not be support coming from the government, I was also disappointed that he never dealt with the substance of the hon. member's motion. Rather, he dragged red herrings across the trail of the debate by dealing with issues like the drought payment, trying to cover up the government's poor track record with re-
October 17, 1989

spect to that program, and dragging out again the issue of the advance payments.
As farmers very well know, it was 152 days from the time the government did not provide the money in the budget to cover those payments until it introduced an acceptable bill. Since then the opposition has been debating for about 20 hours. I found it very unfortunate that the member tried to use that particular argument in the context of this debate.
What I really found unfortunate is that it appeared that the hon. member for Swift Current-Maple Creek-Assiniboia at a very fundamental level did not understand what the hon. member for Mackenzie in fact was saying, that the livestock producer who uses farm-fed grain is discriminated against under the present system. The member for Swift Current-Maple Creek- Assiniboia implied that while the producer of farm-fed grain might not be covered under the grain stabilization program, that farmer, however, would then become eligible for coverage under the livestock stabilization program to compensate for that.
That is not the case because the livestock stabilization program uses the market value of that grain in computing the formulas on which the payouts under the program are based. The problem is that the market value does not include the value that people who are eligible for stabilization get from the grain stabilization program. The amount that people get under grain stabilization is not part of that market price. Therefore it does not get figured into the formula to arrive at the payout levels of the livestock stabilization program. I think it is a very clear case of livestock producers who feed their own grain being discriminated against.
It is very unfortunate that the member perhaps has based the opposition of the government to this particular motion on something that is not even factual and a complete misunderstanding of the situation.
The second argument that the member used was that as a result of some past discussions on the subject it has been deemed to be administratively difficult or impossible to arrive at a fair formula for a fairer system for administering the inclusion of farm-fed grains. Again, the member could not have been listening to the hon. member for Mackenzie, because he explained in some detail how the government of Alberta, followed now by
Private Members' Business
the governments of Saskatchewan and Manitoba, in fact has evolved a very workable system to incorporate the veiy features into provincial programs that he is calling for at the federal level to be included in the Western Grain Stabilization Act and the Agricultural Stabilization Act.
I think the member for Mackenzie dealt very well with the question of administration. It always seems a little ironic to me that we are dealing with a situation where I understand there are 400 planners in the Department of Agriculture. I am not saying those people do not do good work or that they are not good people. I presume they are.
There are 400 planners in that department, and it always seems a little ironic to me that something that can be understood by most farmers, and was eloquently outlined here by the member for Mackenzie, should be something that 400 planners cannot manage to incorporate into a government program.
I guess those are the same 400 planners who are holding jobs that probably pay $30,000, $40,000, or $50,000 a year and who shortly are going to release a document on behalf of the Minister of Agriculture saying that farmers should be less dependent on government handouts. When you consider the source of that kind of wisdom you sometimes must wonder about the equity of what we are dealing with.
The other point that the member for Swift Current- Maple Creek-Assiniboia raised in suggesting that perhaps he would not be supporting this legislation was that somehow or other it ran afoul of international trade laws and that since we are having so many problems in other areas perhaps this would simply compound that.
I think that is really unfortunate because the grain stabilization bill and the Agricultural Stabilization Act are specifically dealt with I believe in the free trade agreement with the United States and, as well, are fully concurrent with the GATT regime.
Therefore to enhance the agriculture industry through this particular measure would in fact be utilizing a mechanism that is recognized in the international community and would show some leadership in the international field by developing a way to support integrated

October 17, 1989
Private Members' Business
farming operations through a support program which does not distort trade in the international arena.
I hope we have not heard the last word on the intentions of members opposite because I would veiy much like to plead with them to support this particular initiative. I think the member for Mackenzie has introduced many good ideas on agricultural programs into the House through the years. I think his contribution here needs to be recognized for giving leadership not necessarily on a partisan basis but for offering a very progressive and forward looking perspective on agricultural questions. I think he is respected by farm organizations from coast to coast, as well as by members opposite. It seems to me that on something that makes as much sense as this it only seems right to support the hon. member.
This is a votable motion with five hours of debate. One of the objectives of introducing that kind of system into this House, the private members' system, is to allow private members some input into the general direction of government policy, the policy if you will of this House. Even though we are engaging in a major agricultural review at this time, I think this would be a clear direction from all sides in this House that this is a direction in which we would like to see agriculture go in this country.
I would also like to indicate briefly a few of my own reasons for supporting this motion. I agree with the hon. member that the whole trend toward specialization as opposed to mixed farming is in many ways a dead end. It is a dead end socially. It is a dead end environmentally. It is a dead end economically. I think that is becoming more and more evident to more and more farmers, certainly to policy makers and to the public at large.
I think we have to do everything we can to maintain the family size unit, the average size farm, the smaller farm in this country. We are losing farmers so fast it is getting hard to count them.
We look at alarming statistics such as in our own province of Saskatchewan where they say that the average farm is about 1,000 acres. However, those statistics do not say that only 14,000 farms are 1,000 acres or bigger, while 39,000 farms are under 1,000 acres in size. That means there are only 14,000 farms which are
considered to be commercially viable, while 39,000 farms are vulnerable if they are based entirely on grain production. In our province we are experiencing not only farm loss but a general population loss.
I think this kind of initiative is most timely but in fact might well be too late for a lot of people. I think as well that when the government talks about sustainable agriculture it behoves us to start looking at these kinds of initiatives very seriously. We are obviously mining our soil at a rate that we cannot maintain, and we cannot close our eyes to this situation forever.
I have farmed for the last 14 years, and family and neighbours farm as well. Short-term economics have been pressing in on us and probably causing us to adopt some practices we would rather not accept, but I would certainly like to see us take seriously the whole issue of soil conservation, of stewardship of the land and of our resources.
Having said that, I would like in closing to move the amendment that the hon. member intended to be a part of this bill but which through the drafting did not appear. I move:
That the motion be amended by adding after the words "Western
Grain Stabilization Act" the following:
and Agricultural Stabilization Act.


The Acting Speaker (Mr. Paproski):: On debate, the hon. parliamentary secretary.


Mr. Lee Clark (Parliamentary Secretary to Minister of the Environment):: Mr. Speaker, I would like to begin by expressing my gratitude for the opportunity to participate today and by saying that I very much enjoyed the time which I was able to spend on the Standing Committee on Agriculture with the hon. member for Mackenzie. I always found his contribution in committee to be thought provoking and invaluable. Certainly I listened with care to his remarks again today and found them to be equally enjoyable.
I am also pleased to note the amendment which has just been moved, Mr. Speaker, because I think, as all of us in this House understand, it is exceedingly important that issues such as farm-fed grain be addressed on a national basis. There are unfortunately so many problems in agriculture today that to try to address them on a
October 17, 1989

regional basis would not do justice to the nature of the motion before the House. I believe the amendment which has been moved is certainly an appropriate one. I would have been distressed had the proposal been only to look at the western Canadian stabilization program and not the Agricultural Stabilization Act.
Mr. Speaker, as I think you know, the whole issue of farm-fed grain is one of many of considerable importance which is currently being addressed by the federal government and its representatives in co-operation with provincial governments and with farm leaders throughout the country. There have been a number of meetings, the objective of which is to tiy to add to the degree of stability which unfortunately is not always present in agriculture. Quite clearly it has not been present in the last two or three years.
I have looked forward with some anticipation to the results of those meetings because, although I am very proud as a member of this government of the amount of financial assistance which we have been able to provide to Canadian agriculture since 1984-and I think most people in this House who remember understand that there has been a record amount of such financial assistance-I continue to be frustrated and troubled by the fact that ad hoc programs are never fully adequate for the needs of those who are participants in them.
Unfortunately it is virtually impossible to devise ad hoc programs in such a way that they are always equitable or at least perceived to be equitable. Certainly, without doubt, while the drought program for 1988 is providing a much needed $850 million to Canadian farm producers, it has created a great amount of administrative difficulty due to the fact that we are dealing in many cases with inadequate documentation of crop reduction.
I truly hope that one of the results of the meetings which have been taking place in the last few months will be fewer programs in agriculture, less dependence on ad hoc programs, and that with the type of insurance programs in place the farm community will be able to determine well in advance what its rights are and what the level of protection will be, much in the same way that an urban resident is able to take out fire insurance on a house or something of that nature. We need that kind of stability.
Private Members' Business
There is no question that there is a difficulty within the western grain stabilization program and with agricultural stabilization at the moment in that people who do feed grain on the farm-and that is some 30 per cent of all grain production in the country or about one-half of the cereals if you exclude wheat from that calculation-are not eligible to participate in the western grain stabilization program, to use that as an example.
Consequently there is a feeling of frustration and unfortunately what happens is that very often farmers reorganize their business so that in a sense there will be two businesses. They split their operations so that family members in one case can produce grain and sell it to another family member in order to enhance their likelihood of being able to participate in the western grain stabilization program. That has been a problem and continues to be a problem. I know it is one of the areas of concern of those who participate in those meetings to which I have already referred and which they will certainly be addressing.
The difficulty with this program is not unique to western Canada. The concerns are there in the mari-times and other parts of Canada as well.
However, finding a solution to this problem is not simply a matter of adding farm-fed grain to the stabilization programs, whether it be the Western Grain Stabilization Act or the Agricultural Stabilization Act. In fact, in so doing we might be in some danger of creating another set of inequities to replace those which are currently there.
For example, some dairy producers already have the cost of producing grain built into their milk prices. To make such grain eligible for grain stabilization payments as well could amount to duplication and of course would be inequitable to other producers.
The main motion deals specifically with the idea of including farm-fed grain in the western grain stabilization program. I think there are two or three points that need to be addressed, because it certainly is something that the committee on which I had the honour to serve as chairman back in 1986 spent a lot of time addressing. As a previous colleague has already indicated, however, we were not able to resolve some of the problems which were then before us.

Private Members' Business
For example, to include farm-fed grain in the Western Grain Stabilization Act would require a fundamental change, and that is a change in the basic structure of the program itself. The WGSA, as most members of this House know, would have to then become a production based program rather than a program based on recognized commercial grain sales.
As already indicated this would present its own set of issues. For instance, the collection of good yield data would be essential to a production based program. Certainly the need for that yield data is there, but it is readily apparent from the drought program that crop insurance statistics by themselves are not sufficient to provide that data.
Unless a reliable set of individual yield histories were available, stabilization payments might then have to be based on regional yield averages. One of the problems with those averages is that there are differences. There are inequities. Producers with yields below the regional average would be overcompensated, while the other half of the farmers with production statistics above the average would be penalized. Also, such a program could result in payouts at a time when livestock returns are adequate or even at a peak.
Changing the WGSA into a production based program would also remove the protection that farmers now have from reduced marketings because of reduced export opportunities. Currently, if delivery opportunities are reduced, lower marketings can result and the lower net cash flow can then trigger payments under WGSA. If WGSA were to become production based it would not respond as readily to fluctuations in marketings.
Aside from these considerations it must also be understood that including farm-fed grain in WGSA would add to the cost of the program, This is a program to which the farmer contributes as well as the federal government. That would add to the farmer's cost at a time when, as we all know too well, cash flow is far less than adequate particularly in western Canada.
Unfortunately crops in my own constituency of Brandon-Souris are worse even in 1989 than they were in 1988. Consequently we are not in a position to be able to afford additional payments at this time.
Other options have been discussed from time to time that I think are important and should be noted. Some have suggested including the cost of grain production in livestock stabilization programs. At the present time livestock price support typically includes the market price of grain and calculations to determine support but not the cost of producing the grain.
Dairy support programs include grain production costs to a degree. Support calculations which include the cost of grain production would result in higher livestock support prices when costs of producing grain increase. This could provide an incentive to farmers to produce both grain and livestock to be eligible for grain stabilization programs. However, it would work against producers who buy feed for their livestock.
Another option which has been considered is jointly stabilizing grain and livestock revenues by stabilizing combined net revenue from the two enterprises. This type of program would have to be operated at the farm level in order to take into account differences in the importance of each enterprise. In the case of a mixed farm operation where the returns are more stable, lower levy rates could be applied.
The government is currently examining options for grain safety net programs and I look forward to that. Farmers involved in the review process agree that this issue must be dealt with on a national scale. Inclusion of farm-fed grain in stabilization programs was, in fact, one of the issues reviewed by the Standing Committee on Agriculture, as we have already noted. This was also raised in meetings with farm leaders last year and again during the course of the last few months.
This review, which is currently under way, will be looking at many issues other than just farm-fed grain. I do hope that one of the results of the review will be the creation of a comprehensive safety net program of which, I would assume, the Western Grain Stabilization Act may be a part. I would assume that crop insurance and the red meat stabilization programs, of which I think we are appropriately proud, would be a part as well.
In reviewing all of these programs, I hope that the House would agree that it is important in the end to try to include each of the areas of deficiency that we have identified-and farm-fed grain is only one of many-so that the final result of these meetings with the farm leaders and with the provinces will be a type of comprehensive farm insurance program in which farmers can ensure from year to year that they have a relatively stable income and that their incomes will not be subject
October 17, 1989

to the fluctuations in marketing and prices as it has been in the past. And, if it is possible to include farm-fed grain as part of that package, then certainly I think all members of the House would agree that that would be a worthy objective as well.


SPEAKER'S RULING
The Acting Speaker (Mr. Paproski):: Before I call upon the hon. member for Red Deer, I have examined the amendment and, although I have some reservation, I will give the hon. member the benefit of the doubt and we will accept the motion.


WESTERN GRAIN STABILIZATION ACT
Mr. Doug Fee (Red Deer):: Mr. Speaker, I am pleased to have this opportunity this evening to respond to the private member's motion on inclusion of farm-fed grain in the western grain stabilization program. Before I begin my speech, Mr. Speaker, may I ask you a question? In light of the hour on the clock, will I have an opportunity to continue my remarks later, or should I talk very rapidly at this point?


The Acting Speaker (Mr. Paproski):: The hon. member will have nine minutes remaining in his speech when we finish at six o'clock. If he does not hurry, he will lose that.


Douglas Fee: Thank you, Mr. Speaker. In my opinion, there are a number of reasons why including farm-fed grain in the western grain stabilization program is not practical. I would like to outline some of those reasons for you.
First of all, the amendment you have just accepted is an improvement over the original motion. The Western Grain Stabilization Act is a program which applies only to farmers in the Canadian Wheat Board designated areas of western Canada. Grain stabilization concerns farmers in all regions of Canada and if we look, as the original motion did, at one region only, it would not be in the best interests of producers because it would address the issue in too narrow a context.
I still have a very real concern that by adding farm-fed grain to the Western Grain Stabilization Act, we would perhaps be creating more inequities than those that already exist. This proposed change to the Western
Adjournment Debate
Grain Stabilization Act would involve a major, fundamental change to the program. Including farm-fed grain in the western grain stabilization program would mean changing the basic structure of the program.


The Acting Speaker (Mr. Paproski):: The hon. member will have nine minutes remaining the next time the bill appears in the House.
The time provided for the consideration of Private Members' Business has now expired. Pursuant to Standing Order 93, the Order is dropped to the bottom of the list of the order of precedence on the Order Paper.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 38 deemed to have been moved.

Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, in the House of Commons some time ago, I raised the issue with the government about VIA Rail and the cut-backs that were forced upon the constituency that I have the honour and privilege to represent.
The government has shut down 40 per cent of the rail lines between Ottawa and Montreal. It has also shut down 25 per cent of the lines between Ottawa and Toronto. Many people in the constituency that I represent use VIA Rail to go to work. They use it to commute between Alexandria and Montreal, and elsewhere. I feel that it is unfair that these people are now being deprived of this essential service.
The government says that it cannot afford VIA Rail any more. Why could it so much afford it during the election campaign? Why was the Prime Minister, during the election campaign, standing on a train platform in Actonvale, Quebec, saying to the people of that part of the country that VIA Rail was there to stay and that the Prime Minister had seen to it that train service was restored?

October 17, 1989
Adjournment Debate
The Financial Post of September 14,1989 identified one of the reasons why VIA Rail is in the present deficit situation. It talks about the fact that CN Rail is recording a profit and VIA Rail is recording a loss. Both are Crown corporations and one corporation is dependent on the other for the use of its track. It says:
In CN's case this is particularly galling, since the railway claims to be operating at a profit - "a business as well as a responsibility" is one of its slogans. Yet on closer examination it will be seen that for most of its life span VIA, has been one of CN's top two customers, the other being grain transport which is also heavily subsidized.
What we have, then, is a hat-and-shell game in which one public corporation, claiming a profit, is dependent on another which runs at a loss.
The problem now appears to be that my constituents are losing a service because CN Rail and CP Rail in some measure charge much too much for that track fee.
I had another problem in the constituency that I represent in regard to rail transport. It is the fact that the residents of my province commute to Montreal using passenger train. The government member who will be charged with responding to this will say, "Yes, but commuter rail is the responsibility of the province." I disagree.
Which province is going to be responsible for taking commuters from Alexandria, Ontario, to Montreal, Quebec, the Government of Ontario, when 90 per cent of the track is located in Quebec, or the Government of Quebec taking Ontarians to work in another province? Both, of course, are going to claim that it is not their responsibility and that the responsibility belongs elsewhere.

Mr. Speaker, it is clear the Government must help provide transportation for passengers who travel from one province to another to go to work. In fact, a precedent has already been set by the fact that the National Capital Commission annually pays $974,000 to the Outaouais Regional Community Transit Commission and $608,000 to the Ottawa-Carleton Regional Transit Commission.
These subsidies by the NCC, a federal government agency, acknowledge the need for passengers to commute from one province to another to get to work.
Mr. Speaker, I say to the Conservative Government that the Minister is not on track on this issue. It is high time the Government remembered that Canadians want to keep their railways and want to keep VIA Rail.

I say to the government that this plan should be derailed and should be derailed immediately. The minister has told us that we are going to have a royal commission of inquiry to study whether or not we should have shut down VIA Rail when we already did. I say that that is putting the caboose before the engine.


Mr. Ross Belsher (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, my hon. friend has made mention of what we campaigned on last year during the election campaign. I would like to tell him that we did promise Canadians during the election campaign that we would take responsibility for fiscal management of the affairs of Canada. I feel that the action we have taken in this last couple of weeks is a very position step in that direction.
I would like to offer to the hon. member some views on the government's decision on VIA's five-year corporate plan. The government's decision maintains a national, affordable, sustainable network of all rail passenger services, while at the same time being financially responsible. We do not have unlimited resources from the general treasury to pour into rail passenger service.
The government determined that Canadian taxpayers can simply no longer afford to spend so much on VIA when it offers such a low return on the ridership and revenues. VIA's ridership has dropped by 20 per cent since 1981. Its cost recovery continues to hover around 30 per cent. The corporation required an unprecedented $641 million in subsidies in 1988 alone, or an average of $100 for every person who boarded the train.
The government had to act, and having decided on VIA's corporate plan, chose to use the powers of the Governor in Council to act quickly. Delay would have cost the Canadian taxpayers further millions of dollars which, quite frankly, we cannot afford. The decision was not taken lightly and was taken only after careful deliberation and consideration of the representations received from individual Canadians, provincial ministers, mayors and other representatives of municipalities and
October 17, 1989

numerous other groups. Close attention was paid to all other concerns and suggestions.
The national network that we envisage strikes the best balance between the real transportation needs of Canada and its fiscal realities.



Russell Gregoire MacLellan: Mr. Speaker, I asked the Minister of Transport what I feel is a very important question and that is, following the cancellation of VIA service in eastern Nova Scotia between Truro and Sydney, was it not natural to assume that freight service would follow, and that the rail would be abandoned. The minister stated that this was not so much a question for him or for the government but for the NTA, that the NTA, under the National Transportation Act, had jurisdiction in deciding what rail lines were to be abandoned. He completely neglected to give me an unequivocal promise that that rail line would not be abandoned.
The minister, by not giving an unequivocal answer, has abandoned his responsibility as Minister of Transport to maintain a comprehensive transportation policy in this country. It is very important that areas such as mine know what the government is going to do, regardless of whether it is the responsibility of the National Transportation Act or not. It is the government's responsibility to maintain the services.
It is vital because many people in this country presume that because rail passenger service has been cancelled, rail freight service is to follow and those that lost passenger service will lose rail service completely and those rail lines will be abandoned. In Cape Breton, which needs industry badly, we are now facing the prospect of prospective investors saying there is not going to be a railroad that because there is no passenger service, ultimately it is only a matter of time before there is not going to be freight service. The minister would not state to the contrary.
It is made additionally difficult because the government appointed the president of CN to be president of VIA and asked that president of VIA, who was also president of CN, to do a study as to the rail feasibility for passenger lines in Canada. He decided which lines were to be closed and that recommendation was then given to the government. The president of VIA, by closing the VIA service in many parts of Canada, helped to make his
Adjournment Debate
case as president of CN for the abandonment of those particular lines. It is just not acceptable.
Also, unless we get an unequivocal statement from the government that rail lines in this country are going to be kept open, then we are inviting CN to downgrade the service to help them make its case for that particular rail abandonment. It has been done in other areas. It has been brought up at hearings that CN will intentionally reduce the service to make that service look as bad as possible to make its case for rail abandonment. It does not want many rail lines in Atlantic Canada, if it wants any rail lines at all. We cannot give it that opportunity. It is important that the government says that rail lines in eastern Nova Scotia will not be abandoned, that the service from Halifax to Sydney will continue. Then we will have CN making the best of that line, making as economic use as possible of that line, and maintaining that line.
CN has already entered into an arrangement to ship containers from Halifax to St. John's directly, thereby cutting down the container traffic from North Sydney to Newfoundland by 75 per cent, thereby starting to make its case. It buys rails from Sydney Steel Corporation. Imagine buying rails from a steel plant that may not have a railroad to ship those rails out on. Some people say, well, you can ship them by water. If you could ship them by water as cheaply as CN can on its track, then of course we would have done it before. But, of course, it uses those rails at intermittent spots across the country. Shipping to one particular location means extra handling and extra costs for it.
We have coal shipments in Cape Breton to clients whom we badly need to maintain a very struggling economy. Each coal car contains 100 tonnes. For each coal car, we would need four eighteen-wheel trucks to carry that same amount of coal. One of my constituents counted at a crossing 54 coal cars. That would mean 216 18-wheel trucks on the highways. Imagine what that would do to the tourist industry when the train goes through the centre of the island without much recognition whatsoever?
It is important that that rail line be maintained in Cape Breton and eastern Nova Scotia. It is vital that the government make a commitment and recognize the importance of maintaining that rail line. There should be no more backsliding. There cannot be any more dillydallying on the part of the government. We must draw the line for Canada and say to the people of Cape Breton and eastern Nova Scotia that the government is the

October 17, 1989
Adjournment Debate
government of all of Canada and not just of the areas that are numerous in population. There is a Canada outside the main metropolitan areas. It is important that this government recognize that.


Ross Belsher: Mr. Speaker, the hon. member for Cape Breton-The Sydneys has raised concerns regarding the possible branch line abandonment that the government has announced in its plan for the restructured rail passenger network. I can appreciate the concerns that he has raised here today and on other occasions. I also want to assure him that the government appreciates the concerns because we have to represent all areas of the country.
As the Blouse knows, it is for the National Transportation Agency to rule on the requests for branch line abandonment for CN and CP which are currently before the agency. They have to give due notice of their intentions.
The National Transportation Act of 1987 lays out the matters at which the agency must look in making its decision. The act does not call in any way for a line to be abandoned just because VIA Rail is no longer using the line.
I would remind members that in the fall of last year, the Minister of Transport asked the National Transportation Agency to seek the views of the provinces with regard to the criteria that it should be using for branch line abandonment and its concept of a basic rail network. I can assure the House that all proposals for branch line abandonment will be considered very carefully as the law requires.
The hon. member has also made the implication in his remarks that the president of CN, in functioning as VIAs chief executive officer, might have conflicting objectives in respect to branch line abandonment. I can assure him that this is not the case. In hearings today before the transport committee, we heard that it is a very small portion of CN's revenue that comes by way of VIA Rail. There is that myth that a large portion of its
revenue is from VIA. That is not the case. He gave the figures before the committee today.
In either his capacity as President of CN or as the chief executive officer of VIA or CN, the ownership of the rail line is not an issue in the government's decision to maintain a sustainable and an affordable national rail transportation network.
ALBERTA BUSINESS LOANS PORTFOLIO/REVERSAL OF POLICY-POSITION OF THE MINISTER


Mr. Ross Harvey (Edmonton East):: Mr. Speaker, on June 16 of this year, I put a question to the hon. Minister of Finance, concerning business loans by the chartered banks in Alberta. At that time, I noted that business loans by Canada's chartered banks had declined by 50 per cent in Alberta from 1982 to 1988. They dropped from an annual average of $18.1 billion in 1982 to $9.1 billion in 1988.1 noted as well that given average dollars invested per new job created figures for Alberta, that collapse of bank business financing in Alberta cost the people of that province somewhere between 100,000 and 140,000 jobs.
Two related elements make this abandoning of Alberta businesses by Canada's chartered banks all the more strange. First, indigenous financial institutions in Alberta actually increased their assets base in the province during the same period, again 1982 to 1988, in which the bank's assets were dropping like crab apples in the fall. Local credit unions saw their assets rise by 22 per cent. Trust companies' assets went up by 30 percent. Incredibly, mortgage companies' assets shot up by 147 per cent, and Alberta Treasury Branches', the Alberta peoples' nationalized bank, its assets skyrocketed by a whopping 167 per cent.
Second, at the same time as the chartered banks business loans in Alberta declined by 50 per cent and their total assets declined by 13 per cent, their total liabilities actually went up by 27 per cent and the value of personal savings held by those banks in Alberta went up by a very healthy 41 per cent. So at precisely the same time that business loans had been declining absolutely and as a percentage of total assets, personal savings have been rising absolutely and as a percentage of total liabilities.
To those familiar with classic capitalist economic theory which holds that banks and such similar financial institutions exist primarily to marshall the savings of
October 17, 1989

individuals in a community and then put those savings to productive use in wealth-creating investment, these diametrically opposite trends must be deeply puzzling, especially during a period in which other locally-based financial institutions, including again, the province's very own nationalized bank, experienced healthy and in some instances, very healthy increases in their assets.
The Minister of Finance, in responding to these facts last June, offered two related explanations. First, he said that it was just a matter of bank business loans reflecting the adjustment in Alberta's economy as it tumbled from the boom-time highs of 1982 to the more sober and appropriate levels of 1988 and second, that it was the fault of the NEP. I will deal with each argument.
To take the second point first, the facts are that the banks, abandonment of their Alberta business assets accelerated after the revoking of the NEP in 1985. Bank business loans in Alberta dropped by 6.2 per cent from 1982 to 1983; by 7.2 per cent from 1983 to 1984; and by 5.4 per cent from 1984 to 1985. Then the NEP was removed. Immediately the banks responded. Business loans dropped like a rock from 1985 to 1986, a plunge of 13 per cent, more than double the previous year's rate of decline. Then from 1986 to 1987, the crash accelerated further, reaching a dizzying 18 per cent drop. Things moderated only slightly from 1987 to 1988 when bank business loans dropped only another 14.4 per cent.
If one wishes to involve the NEP at all, the only reasonable conclusion one can draw from the data is that the NEP, while it was in place, served to moderate the chartered banks' abandonment of Alberta businesses.
The other argument which can be stated, that Alberta has simply been put back in its proper place is, on the face of it, a more reasonable argument. Again, it requires ignoring the record of other locally based financially institutions in the province, but let us for the moment adopt that indulgent ignorance and examine the thesis.
In 1982, the chartered banks had $18.1 billion tied up in business loans in Alberta. That same year, Alberta's GDP at market price was $59.9 billion. By 1988, bank business loans had plummeted to $9.1 billion, for a 50 per cent drop. But Alberta's GDP had risen by almost 20
Adjournment Debate
per cent over the same period up to $63.3 billion. Again, those who advance the thesis that the banks' business loans in Alberta are simply a lock-step puppet of the province's GDP will have to seek support for their thesis from sources other than the available data.
Wait, I hear the cry coming from across the floor. That is not what we said. We said you have to look at Alberta's business loans in light of Alberta's GDP, in light of the national GDP. Got that? Right, Mr. Speaker. Ignore the province's growing savings. Ignore the province's growing GDP. Look instead at what happened to Alberta's GDP as a percentage of the national GDP. Okay, fine. Let us look at what happened.
In 1982, at the same time as Alberta accounted for 14.1 per cent of Canada's GDP, it received 25.3 per cent of the chartered banks' business loans. By 1988, Alberta accounted for only 10.5 per cent of Canada's GDP, a drop of 3.6 per cent. But over the same period, Alberta's share of the banks' business loans dropped to 11.2 per cent, a plunge of 14.1 per cent. Alberta's GDP share drops 3.6 points so its business loans share drops 14.1 points.
Look at it in this way. Express bank business loans as a ratio of GDP. In 1982, that ratio stood at 1 to 2.91; that is, $1 of bank business loans for every $2.91 of GDP. By 1988, that ratio had widened to 1 to 6.93; $1 of bank business loans for every $6.93 of GDP. That is some adjustment over six year.
Again, I would simply ask the government, why did you let it happen? Why did you not do something to staunch this appalling haemorrhage of bank finance capital out of Alberta businesses? While we are at it let me pose as well the following question: Canadians' total personal savings on deposit with Canadian chartered banks rose from $98.9 billion in 1982 to $150.3 billion in 1988, a rise of a little more than 50 per cent. Even expressed in constant 1981 dollars, that is still a rise of 17 per cent, a very healthy trend. Over the same period the total of Canadian chartered banks business loans outstanding in Canada rose all but imperceptibly from $71.6 billion in 1982 to $72.8 billion in 1988. In constant 1981 dollars, that is actually a decline of more than 20 per cent in bank business loans. Again, that is savings up, business loans down.

October 17, 1989
Adjournment Debate
I would therefore ask the government, is it at all alarmed at this trend which, once again, flies in the face of classic capitalist economics? Having abandoned Alberta businesses to their fate, will the government nonetheless see what it can do to encourage a somewhat less tight-fisted attitude on the part of the banks toward Canadian business in general?
And what the heck, Mr. Speaker, maybe just one more time, the government could explain why it is necessary to exempt Canada's chartered banks from the GST.


Mr. Pierre H. Vincent (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, it always makes me smile when I see a Member of the New Democratic Party speaking for the corporate sector, when he criticizes them for the rest of the day and in fact the rest of the year. The Hon. Member for Edmonton East (Mr. Harvey) pointed out that the bank business loans portfolio in Alberta declined 50 per cent between 1982 and 1988, and his conclusion was that the banks are depriving Albertan businesses of the credit they need to expand.
Mr. Speaker, it is true that the bank business loans portfolio in Alberta declined between 1982 and 1988.
What we must understand is that this decline was not caused by the banks, as the Hon. Member said, "throwing half of their business loans overboard". There were several financial factors that influenced the banks.
I believe the most important factor was that 1982, the first year of the period we are considering, in addition to being a year of transition-the previous years had been years of growth while those that followed immediately afterwards showed a drop in activity-was practically a record year for the resource sector in Canada and especially in Alberta. There are two reasons for this. First, thanks to very high prices in the industry, the resource sector was growing at an unprecedented rate. Second, 1982 was the year when Canadianization of the resource industry was made a priority. As a result of
these two factors, funds borrowed from banks by the resource sector across Canada in 1982 totalled $10.8 billion, which was 14 per cent of total business loans. In 1988, the corresponding figures were, respectively, $5.6 billion and 7 per cent.
Because of the important role played by the resource sector in Alberta's economy, the province's share of total business loans in 1982 rose to 25 per cent, twice the province's share of the GDP. Alberta's share of total business loans in 1988 was 11 per cent, which is closer to its present share of 12 per cent.
The second factor to be considered when we look at bank loans to businesses in Alberta is that the 1980s were a difficult period for the resource sector in Canada, and that understandably, the impact of these problems was particularly severe in Alberta. Because of large loans contracted during the years of rapid growth immediately preceding 1982, many businesses were reorganized, downsized, amalgamated or simply closed down. From 1982 to 1988, non-recovered bank loans in the resource sector, and especially in Alberta, totalled several billion dollars. Following a period of restructuring, the sector has now gained strength.
Another factor we cannot overlook is that many businesses are now resorting to other types of financing. Since 1982, for instance, the use of bank acceptances and securities issues has increased.
In concluding, Mr. Speaker, I think we can say that the figures submitted by the Hon. Member for Edmonton East are not a reflection of cynical or discriminatory practices. Furthermore, we have every reason to believe that the banks, like other financial institutions, are developing opportunities for business loans as vigorously in Alberta as they are in the rest of the country.


The Acting Speaker (Mr. Paproski):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 2 p.m., pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 6.28 p.m.
[Stage Direction]
Wednesday, October 18,1989