1989-05-10

Mr. Bill Attewell (Markham):: Mr. Speaker, on May 14, 1948, being the fifth day of Iyar in the Hebrew calendar in that year, the State of Israel was created, the realization of a Zionist dream and a haven for the homeless in the tragic aftermath of the Holocaust.
The soul and spirit of the Israeli people were aptly described by Israel's first Prime Minister, David Ben-Gurion, when he said:
The essence and significance of Jewish history lies in the preference of quality over quantity. For our security, survival, and status in the world and preservation of the legacy of our prophets to the end of time, Israel must strive incessantly for moral, cultural, technological, and social improvement to be a unique people.
Israel has become a vibrant, beautiful state. The desert has indeed bloomed, as I saw during my visit.
While Israel has had to cope with many wars and conflicts over the years, the past year and a half have been particularly difficult times.
As we wish Israel happy birthday, we pray that a way will be found for a lasting and enduring peace. No one longs for that peace more than the Israeli people. Shalom.


TRIBUTES
Mr. Svend J. Robinson (Burnaby-Kingsway):: Mr. Speaker, I rise to pay tribute to an extraordinary Canadian and friend who died yesterday, Kevin Brown of Vancouver.
Kevin was a founder of the Persons with AIDS Coalition. He fought his personal battle with AIDS for nearly four years, overcoming eight bouts of pneumonia. He was a fighter for all people living with AIDS, a man of humble origins who put a human face on AIDS.
Kevin challenged all of us, individuals and Governments, to do much more to combat and prevent this terrible disease which has killed over 1,400 Canadians, and to provide love and support to those who are living with AIDS.
As a proud gay man, Kevin spoke out against discrimination with these words:
As people with AIDS we are engaged in a daily battle for survival with this dread disease-to wake up each morning isamarvelandto make it through the day an achievement. Therefore, how cruel, for those of us who are gay, to not only have to fight against AIDS but also to suffer the unjust burden of homophobia from our society.
There can be no better tribute to Kevin Brown than to honour the important message that he gives us all.


EXTERNAL AFFAIRS
Mrs. Shirley Maheu (Saint-Laurent):: Mr. Speaker, I rise today in the House to honour the forty-first anniversary of the independence of the State of Israel.
After 2,000 years in the Diaspora and the horrors of the Nazi Holocaust, the Jewish people finally realized their dream in the establishment of their own homeland. Israel is the one place in the world where the Jewish people are masters in their own home.
Years of violent interaction with its neighbours have made Israel mature quickly as a state. I wish the people of Israel peace and happiness in a troubled area of the world and call on Parliament to celebrate this occasion with the Canadian Jewish community.

May 10, 1989



Mrs. Sheila Finestone (Mount Royal):: Mr. Speaker, I welcome the messages of my colleagues.
Today is Israel's Independence Day, celebrating the forty-first anniversary of the founding of the modem State of Israel. For the past 41 years our country and Israel have shared a strong and close friendship based upon mutual respect and understanding. Although Israel has had to struggle to deal with some of the most trying crises that have ever challenged a modem state, Canadians are pleased to note that she remains a democratic and pluralistic state, unfortunately one of the few such states in the Middle East guided by a commitment to the democratic process and the rule of law.
Canadians and Israelis share a history of struggling in many regions against climate and physical geography in order to turn desolate and harsh lands into places where food can be harvested and life improved. We share a common commitment to improving the lot of people in less developed countries and to making a positive and constructive contribution to our global future.
I hope all Members of the House join me in wishing Israel well on this occasion and with Israel in the hope that this year we shall finally see an enduring peace brought to all neighbours in the Middle East, as well as to the entire world.


Some Hon. Members:: Hear, hear!


TRIBUTES
Mr. Dave Worthy (Cariboo-Chilcotin):: Mr. Speaker, this morning I was advised that after a long and courageous battle with cancer the Hon. Alex Fraser, MLA for The Cariboo, had passed away.
Alex Fraser's father, John A. Fraser, was the Cariboo MLA from 1912 until 1916 and Member of Parliament in this place for the Cariboo from 1925 to 1935.
Alex continued in his father's footsteps by serving in elected office for more than 40 years, first as Mayor of
Quesnel and then as MLA for The Cariboo for the last 20 years. Much of this time he spent in the role of Minister of Transportation and Highways.
Alex Fraser was as much a part of The Cariboo as the great river with which he shared his name. Throughout his long and distinguished political career he never lost sight of the people he was chosen to represent. He was the kind of man who will best be remembered for representing all the people all the time and with all of his heart. He embodied the good qualities of those good people of The Cariboo that he loved so well. For this reason Alex transcended politics.
Just as Alex was honoured to serve The Cariboo, we of The Cariboo have been even more honoured to have been represented for so long by such a dedicated and distinguished gentleman.


TRIBUTE TO NURSES AND ORDERLIES
Mr. Jean-Guy Guilbault (Drummond):: Mr. Speaker, I am pleased today to pay tribute to Canada's nurses for their dedication and contribution to improving the health of Canadians.
Their presence is felt in the home, the workplace, clinics, hospitals, reception centres and all other types of health care institution. There are more than 200,000 nurses in Canada. This impressive number of care-givers makes a big contribution to health services and accounts for a large part of the effectiveness and strength of the medical team.
The theme chosen this year by the Canadian Association to celebrate the national week from May 8 to 12 is: Canadian nurses promote children's health, advocate healthy living and a safe environment, give information about health and risks, cooperate with Canadians for a better future.
In recognition of the nurses essential role, I call on Members of this House and Canadians to show their appreciation.
May 10,1989


FORESTRY
Mr. Brian L. Gardiner (Prince George-Bulkley Valley):: Mr. Speaker, at the end of March, forestry agreements with six provinces expired. Three other agreements will expire in March of next year. These agreements have helped provinces to regenerate their forest resources and the seedlings we have here today.
Despite the cancellation of the agreements and the fact that it is Forestry Week, the Government has failed to move quickly to negotiate new agreements with the provinces. The federal Government has a requirement that a comprehensive 20-year forestry plan be in place with each province before new agreements are signed.
Officials in the Western Diversification Office have stated that they are changing the current agreements and that it will be at least another three to four months before the Government knows what approach to take.
It is time for the Minister to show some leadership, to make a commitment now that the funds will be available to negotiate the new agreements which the provinces need to ensure that our forests will continue to provide for future generations.


CRIMINAL CODE
Mrs. Pauline Browes (Scarborough Centre):: Mr. Speaker, for under $500 a 16 year old in Canada can purchase an AK-47 assault rifle that has been converted from fully to semi-automatic. For an extra $60 that same 16 year old can purchase a trigger activator that will allow the gun to fire three bullets with one pull of the trigger. If that person has any knowledge of guns the AK-47 can be easily reconverted back to a fully automatic machine-gun. A fully automatic AK-47 fires a 30-round clip in less than three seconds.
I join the police agencies from across Canada in urging the Government to change the Criminal Code to prohibit these converted guns.
I applaud the Minister of Justice (Mr. Lewis) for stating his commitment to address this issue. I urge him to ensure that our Criminal Code bans any weapon that is or has the potential of becoming fully automatic.


FISHERIES
Mr. Lawrence MacAulay (Cardigan):: Mr. Speaker, the deplorable condition of Prince Edward Island's wharfs has not been addressed by the present Conservative Government. Island fishermen have to work under conditions that are hazardous to life and limb.
Wharfs in my riding such as those at Grahams, Macaulays, Savage Harbour, Sturgeon and Naufarge, among others, have deteriorated into a state of disrepair, a disrepair that is fast becoming an environmental as well as a fisheries issue.
Fishermen have petitioned the Government over the past five years to commit funds to repair these wharfs. The Government has only paid lip-service to these requests. The proof is at the wharfs, the proof of the Government's insensitivity and inaction.
I implore the Minister to act now before it is too late. Island fishermen deserve equality now.


THE DISABLED AND THE HANDICAPPED
Mr. Neil Young (Beaches-Woodbine):: Mr. Speaker, I think members on all sides of the House should be lending their whole-hearted support to the renewal of the Court Challenges Program for disabled people which is due to expire in March 1990.
This program provides the only funding available for disabled people to use their equality rights under the Charter. Without an adequate and permanent funding scheme to support test case litigation on behalf of disadvantaged groups, the equality guarantees in the Charter will be accessible only to the wealthy. Most people with a disability in Canada live on low or fixed incomes.
Already applicants to the Court Challenges Program are being informed that only expenditures incurred

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before March, 1990 can be covered. Since litigation often takes years, not months, few cases will be completed by that date. This means that access to the Charter is already jeopardized.
This program is extremely important to disabled people and their organizations. It deserves to be supported by members on all sides of the House.


NATIONAL FOREST WEEK
Mr. Charles-Eugene Marin (Gaspe):: Mr. Speaker, last September, the Prime Minister announced the creation of a full-fledged forestry department. He also mentioned the increasing recognition of the importance of this special heritage, our forest resources, for all Canadians.
In the years preceding the announcement of the department's creation, we as a nation clearly began to take a sound management approach to our forestry resources. Just recall the impressive results obtained from federal-provincial agreements to develop forestry resources. Indeed, nearly 900 million trees have been planted and some 100,000 jobs created throughout Canada.
National Forest Week is the time to reflect on these achievements and to prepare to meet the many challenges the future of the forests holds as we approach the 21st century.


Mr. Speaker:: I should advise Hon. Members that I have noted an exhibit on some their desks on both sides of the House. Hon. Members will know that no matter how well motivated the exhibit may be, it is breaching the rules. I would ask Hon. Members to co-operate with the Chair.



ORAL QUESTION PERIOD


Right Hon. John N. Tbrner (Leader of the Opposition):: Mr. Speaker, I would like to take up with the Minister of Finance the question of his breach of trust with the senior citizens of the country today, as I did yesterday.
I want to recall to his mind what the Prime Minister said during the election campaign in Sydney, Nova Scotia. I quote: "As long as I am Prime Minister, social programs, especially those for the elderly will be improved, not diminished".
Today, the President of the United Senior Citizens of Ontario, representing 300,000 old age pensioners, said this about the Prime Minister: "He has misled us". The President of the National Senior Citizens and Pensioners Association representing half a million senior citizens also said today: "We were betrayed-seniors were misled".
Will the Minister of Finance explain why some senior citizens are the only people in the country who are going to have part of their income taxed at 100 per cent? Why is it that some people at 75 will pay a higher tax on their income than people at 35 with the same income? Does he think that an age biased tax is really fair?


Some Hon. Members:: Hear, hear!


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, the Hon. Leader's financial critic is supportive of just exactly what we are doing here.


Some Hon. Members:: No, no!


Mr. Simmons:: Stop misleading the House.


Michael Holcombe Wilson: That is quite consistent with what the Prime Minister and others have said on this side. There will be $865 million more to be paid on Old Age Security payments this year than last year.


Mr. Allmand:: Because there are more old age citizens.


Michael Holcombe Wilson: I also say to the Hon. Member that these payments are fully indexed.
Let me quote if I may again from the budget speech: "This measure maintains the universal character of these transfer programs. Everyone eligible for these programs will continue to receive their benefits, regardless of income."
That is precisely what we are doing. I think it is quite consistent with what has been said in the past.
May 10, 1989


UNIVERSALITY OF SOCIAL PROGRAMS-GOVERNMENT POSITION
Right Hon. John N. Dimer@Leader of the Opposition: Mr. Speaker, during the election campaign the Minister of Finance called me a liar because I predicted that he would cut social programs in this country.
Even the Prime Minister told Canadians again that to him the principle of universality was sacred and that it was one of the basic tenets of this country.
Why did the Minister of Finance break the Prime Minister of Canada's solemn commitment, in his Budget?


Michael Holcombe Wilson: Mr. Speaker, let me just quote if I could from a book called Honourable Mentions written by his finance critic: "For my part I continue to wonder whether family allowances and possibly old age pensions need be universal, especially now that our federal deficits have mounted so markedly". There it is in black and white from his finance critic.


Some Hon. Members:: Hear, hear!


An Hon. Member:: Seniors want an answer.


Michael Holcombe Wilson: Mr. Speaker, let me if I can here-

The main purpose of the social safety net is to help people who need it most, not to subsidize individuals with high incomes. That is the policy of this Budget.


Mr.   Dirner@Vancouver Quadra: It is the word of the Prime Minister that is at issue here. The principle of universality for him was a sacred trust, once again. Senior citizens are challenging his words.


PRINCIPLE OF UNIVERSALITY
Right Hon. John N. Dimer@Leader of the Opposition: Mr. Speaker, my question is again for the Minister of Finance. He knows, as do I, that citizens in 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 being taxed and they have
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planned their future on the basis of that pension. It was part of the social contract in this country, part of the universal social contract. The Minister has broken that contract. What is he going to say to the senior citizens of the countiy?


Michael Holcombe Wilson: Mr. Speaker, I say quite clearly that we not have broken this contract.


Some Hon. Members:: Oh, oh!


Michael Holcombe Wilson: These payments have been taxable for many, many years now. We are still using the tax system because of the huge debt problem, which I have asked all Canadians to understand and to work with us in trying to beat.


An Hon. Member:: Not all Canadians.


Michael Holcombe Wilson: I have asked all Canadians to understand the debt problem. We are asking people to work with us to try to get this debt problem under control.
I say to the Right Hon. Leader of the Opposition that I have stood in this House for two weeks now and he himself has said: "Yes, we have a debt problem because, Wilson, you have increased the debt over the last four and one-half years." He knows-


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: The Right Hon. Leader of the Opposition-


An Hon. Member:: Why don't you tell the truth?


Michael Holcombe Wilson: Mr. Speaker, I will tell the truth, I say to the Member from Newfoundland. The Leader of the Opposition is being dishonest with the Canadian people.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: I am sure the Hon. Minister of Finance does not want to pursue that particular point, at least not in quite the same language. I would hope when I recognize him that he will properly correct himself.


Michael Holcombe Wilson: Mr. Speaker, I will withdraw the way that I was expressing it, but I will make the point at any rate.
The Leader of the Opposition knows full well the only way that debt can be stopped from growing is by reducing the annual deficit. The Right Hon. Leader of the Opposition has yet to tell us how he in any way would reduce the deficit, and that is why I say that that is not

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the right way to treat Canadian people. Come clean with them.


Some Hon. Members:: Hear, hear!


THE ENVIRONMENT
Ms. Sheila Copps (Hamilton East):: Mr. Speaker, my question is directed to the Minister of State (Transport).
We are aware that the Minister represented the Canadian Government at an international conference on the environment about two months ago. At that conference, she received some specific information on traces of PCBs in gasoline sold in Canada.
I would like to ask the Minister why, after a special meeting in Switzerland, she did not have the courage to act on her responsibility with respect to the transportation of dangerous goods or at least be sufficiently concerned about the health of Canadians to inform the Minister of the Enviroment accordingly.


Hon. Lucien Bouchard (Minister of the Environment):: Mr. Speaker, all the reports I received, including the statements made yesterday to the press by the Minister of State (Transport), are to the effect that no specific allegations concerning illegal shipments of contaminated gasoline were passed on, either in Geneva or elsewhere, to departmental employees or members of my office staff.
The only reference made, as I said before, in Basle and at meetings that may have taken place at that time was that toxic substances were being shipped illegally from the United States. That is the only reference that was made.
Personally, I didn't know anything about all this before reading the article in The Globe and Mail.


GOVERNMENT RESPONSE
Sheila Maureen Copps: Mr. Speaker, I would like to direct my supplementary question to the Prime Minister. We are not talking about an employee. We are not talking about a civil servant. We are talking
about a Minister of the Crown who was given certain information as a representative of the Government of Canada at an international environmental conference and who, with absolute and total negligence, failed either to exercise her responsibilities under the Transportation of Dangerous Goods Act or in fact to inform the Minister of the Environment.
Given that reports out of Washington today indicate that this scam could in fact be occurring also in British Columbia, potentially in Alberta and possibly in other parts of the country, what specific action have the Prime Minister and his Government taken to protect the health of Canadians against this scam of PCB laced oils and gas, and specifically to fire the Minister of State for Transport?


Lucien Bouchard: Mr. Speaker, I can inform the House that starting this morning a full operation has been launched at the main crossing point between Canada and the U.S. to take samples on shipments of fuel.
We have 34 inspectors in Environment Canada acting jointly with the Ontario Government and other Departments of the federal Government in Quebec and Ontario. We have now been in contact with all regions of Canada on this matter. I can assure the House and the people of Canada that every measure requested is now being taken to control it.


Some Hon. Members:: Hear, hear!


TRANSPORTATION OF TOXIC SUBSTANCES
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, I have a question for the Minister of State for Transport. My office was told yesterday that at a conference in Switzerland the Minister had been given very specific information about the transport of fuels with toxic substances across the border. Yesterday, the Minister refused to answer in the House. The Minister of the Environment, answering for her, said that all the Government had were hints.
Today, Mr. Green, the responsible environmentalist, who the Minister himself concedes is a serious person, has repeated the following with reference to the Minister, and I quote:
I told them that oil contaminated with PCB's were being transported across the border for use in industrial furnaces and greenhouses.
May 10, 1989

My question for the Minister is simply this-and it is not for the Minister of the Environment, it is for the Minister who has the responsibility here.


Mr. Andre:: You have no right to say that.


John Edward Broadbent: Was she told that and, if so, why didn't she act upon it?


Hon. Pierre Blais (Solicitor General of Canada and Minister of State (Agriculture)):: Mr. Speaker-


Some Hon. Members:: No.


Some Hon. Members:: Oh, oh!


Hon. Shirley Martin (Minister of State (Transport)):: Mr. Speaker, at a conference in Basle, Switzerland, there were conversations in which Mr. Green stated his concern about toxic waste crossing the border. Those concerns were voiced to the officials of Environment who were at that conference. They were voiced within my hearing. The Department took action and that is the extent of it.


Some Hon. Members:: Hear, hear!


INSPECTIONS-FOLLOW-UP ON INFORMATION
John Edward Broadbent: Mr. Speaker, my supplementary is for the Minister. We know according to one official that the inspections that followed this revelation of information at the border were already initiated by the Ontario Government. It had nothing to do with the search for toxic substances. What we are dealing with is not, for example, as was the case with tainted tuna, something that is merely unpleasant but life-threatening. Since the Minister of State for Transport had the information, why did she rely on someone from the Environment Department just to follow up and not herself inform the Minister of the Environment, the Minister of Health and the Solicitor General, all of whom had direct responsibility?


Lucien Bouchard: Mr. Speaker, I am sorry that the Leader of the NDP did not get his facts straight before asking the question. The truth is that it is routine in my Department and jointly with the Ontario Government that each year in May or June there is a stepped-up operation to check the border to verify if there are violations of the transportation of dangerous goods legislation. This year, because Mr. Green raised the question of a general movement of
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illegal toxic wastes across the border, we advanced the operation to April.


Mr. Lapierre:: What did you find?


ALLEGED DEALY IN TRANSFER OF INFORMATION
John Edward Broadbent: Mr. Speaker, my question is for the Prime Minister. The Minister of the Environment admitted yesterday that he had obtained information about these problems at the border, two days ago. But the Minister who went to the conference knew about it two months ago. My question for the Prime Minister is very simple. Did this Minister of Transport make a responsible decision by not directly informing the Minister of the Environment then? Yes or no?


Right Hon. Brian Mulroney (Prime Minister):: The
New Democratic leader has asked a question. Obviously, the two Ministers have given a complete answer. The two Ministers-


Some Hon. Members:: Oh, oh!


Martin Brian Mulroney: Do you want an answer? I shall tiy to answer.
Obviously, the two Ministers acted in an admirable way. The answers were complete and I now count on the New Democratic leader to support Canada's Environment Minister who is doing such important work for the future of Canada.


CONFERENCE IN BASLE-INFORMATION RECEIVED
Hon. William Rompkey (Labrador):: Mr. Speaker, my question is also for the Minister of State for Transport who said that she received information at a conference in Basle two months ago. I want to give the Minister the opportunity now to tell us exactly what information she was given. The Minister has also said that action was taken. Specifically, what action was taken and when?


Shirley Martin: Mr. Speaker, as I answered before, Mr. Green had concerns about the possibilities of toxic wastes being shipped across the border to Canada. That was the extent of it. When he brought that forward, the Departmental officials were there. They heard his concerns, I heard his concerns and the Departmental officials for

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Environment under whose jurisdiction his concerns lie followed up on the details. There were no details.


Jean-C. Lapierre: What did you do?


Shirley Martin: There were concerns expressed and those concerns were followed up.


Some Hon. Members:: Hear, hear!


ACTIONS TAKEN BY MINISTER
Bill Rompkey: Mr. Speaker, my supplementary is for the same Minister. The Minister of State for Transport still has not said what specific action was taken.


Jean-C. Lapierre: What did she do?


Bill Rompkey: She refers to some action that was taken, but we were told today that the Minister has just taken action now at border points in reaction to a problem that is becoming very, veiy serious indeed. What specific action was taken after that conference in Basle, Switzerland?


Lucien Bouchard: Mr. Speaker, the action is that after the information was conveyed to my Department, it was also conveyed to the Governments of Ontario and Quebec, and to the United States. Then there was an advance operation to check the borders which resulted in charges being laid and samples being taken. It was a very active operation.
I have something to add about Mr. Green's allegations. Mr. Green's allegations are somewhat complicated. In The Gazette today, under the signatures of Jennifer Robinson and Marian Scott, we read:
He said he did not mention diesel fuel or gasoline because he was not aware of the extent of the problem.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


ALLEGED IRRESPONSIBILITY OF MINISTERS
Hon. Lloyd Axworthy (Winnipeg South Centre):: Mr. Speaker, I think we have here a fascinating case of ministerial irresponsibility.


Some Hon. Members:: Hear, hear!


Lloyd Axworthy: We have one Minister who says she heard about it but did nothing. The other Minister says: "My officials did something about it, but I didn't know about it".
My question for the Prime Minister is when will he start appointing Ministers of Transport and the Environment who will start taking some action on crucial questions and who will not simply leave things up to the officials all the time?


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: One
thing that I will agree on, Mr. Speaker, is that the Hon. Member knows a great deal about irresponsibility.


Some Hon. Members:: Hear, hear!


William Warren Allmand: That is a great answer, Brian.


Martin Brian Mulroney: I think my hon. friend being a fair-minded parliamentarian-


Mrs. Campbell (South West Nova):: You have had two cases in the last two weeks.


Martin Brian Mulroney: -will acknowledge that both Ministers have acquitted themselves and their responsibilities in a very admirable way, and I know he would want to be the first to underline and salute that.


INVESTIGATION INTO ACTIONS OF MINISTERS
Lloyd Axworthy: Mr. Speaker, the Prime Minister, as a fair-minded parliamentarian some of the time, would surely want to respond to the fact that his Minister of the Environment said yesterday that he only found out about it yesterday and then took action. His Minister of State for Transport said she knew about it but didn't take any action, even though she is responsible for the transportation of toxic goods. Does the Prime Minister not think that it is time he began his own investigation into the irresponsible actions of his Ministers on something that affects the health and safety of Canadians?


Martin Brian Mulroney: Mr. Speaker, I think that all Members of Parliament, irrespective of political parties, are very concerned about the health and welfare of all Canadians. I do not think there is any doubt about that.
In the case at hand, a question has been put to the Minister of State for Transport who responded fully with the information that was required.


Jean-C. Lapierre: She did nothing.


William Warren Allmand: She left it to the officials.
May 10, 1989


Martin Brian Mulroney: The information was conveyed to the Department of the Environment. It is important to note, as the Minister has just pointed out, a quote from Mr. Green:
He did not mention diesel fuel or gasoline because he was not aware of the extent of the problem.
To the extent that he was aware of the problem, that information was conveyed to the Department of the Environment and the Minister for the Environment has acted very competently and fully-


Jean-C. Lapierre: Yesterday.


Martin Brian Mulroney: -in regard to this difficult matter and will continue to do precisely that.


Some Hon. Members:: Hear, hear!


NATIONAL REVENUE
Ms. Audrey McLaughlin (Yukon):: Mr. Speaker, my question is for the Minister of National Revenue. Yesterday in the House, the Minister of the Environment said that he learned a month ago, and I quote, "Daniel Green had been informed of illicit traffic in toxic substances between Canada and the United States." Today, Revenue Canada's chief investigator said:
-whenever Canada Customs inspected a tanker truck they looked for tax law violations-not hazardous wastes-"Had we known of these allegations our approach would have been entirely different - we weren't testing PCBs," -

That is quite a different story!
When did the Minister of National Revenue learn about toxic substances crossing the border between Canada and the United States?


Hon. Otto Jelinek (Minister of National Revenue):: Mr. Speaker, as did my other colleagues in Cabinet, I learned of the suspicion of toxic wastes being included in liquid fuels this Monday. I immediately initiated an investigation within my Department to ascertain whether or not any officials were knowledgeable of the fact prior to this
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Monday. The response was no. No one was informed of anything of that sort.
With respect to testing of tankers, it is true that Customs and Excise tests on a periodic basis tankers for tax rules and regulations for tax evasion. We had no reason whatsoever, prior to this Monday, to suspect the presence of toxic waste in liquid fuel in oil tankers any more than we had any reason to suspect toxic waste in taxed fuels as of this Monday.
Upon finding out, through the leadership of the Minister of the Environment, the Government, on a broad basis, took immediate action. Customs and Revenue Canada is co-operating fully with the Department of the Environment, with the Province of Ontario and with other provinces.


THE ENVIRONMENT
Audrey Marlene McLaughlin: Mr. Speaker, we heard both today and yesterday that Ministers knew at different times about this potentially very dangerous hazard to the health of Canadians. The Minister of the Environment said yesterday one month. Is it not the practice that other Ministers would inform the Minister of National Revenue, who is responsible for Customs in Canada, to ensure that he undertook to begin to search for hazardous toxic waste at the Canadian border as soon as the information was available? Why was the Minister not informed?


Otto John Jelinek: Mr. Speaker, I do not know how often Ministers on this side of the House have to say that the first time this matter of toxic waste in fuel specifically came to our attention was on Monday. How often do we have to say that? As soon as we found out, immediate, proper, direct and decisive action was taken by the Government.


LOW-SULPHUR WESTERN CANADIAN COAL
Mr. Arnold Malone (Crowfoot):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources, and pending his answer, this could have a very significant, positive impact on Canada's balance of payments and on our environment.
What undertakings has the Minister made or is considering making with respect to the movement and utilization of low-sulphur western Canadian coal in the industrial heartland of Ontario to prevent the utilization

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of high-sulphur Pennsylvania coal, the principal cause of sulphur dioxide emissions and therefore acid rain?


Hon. Jake Epp (Minister of Energy, Mines and Resources):: Mr. Speaker, I would like to inform the Hon. Member that we have been very active in attempts to have low-sulphur coal used for thermal purposes, particularly in Ontario. The Hon. Member will recall that a task force was formed largely under the direction of the Deputy Prime Minister. A number of tester model projects were developed, 14 in all, and partial funding for it was to come from western diversification in the amount of $27 million over a period of time. I can tell the Hon. Member that those plans are going forward and we hope we can put together a case for why western coal would be advantageous to Ontario while also using Canadian products and reducing the acid rain problem which now exists.


LIAISON BETWEEN MINISTERS
John Napier Turner: Mr. Speaker, the Minister of State for Transport has said that she had the information, as did some environmental officials, two months ago in Basle. Why is it that she did not communicate with her colleague, the Minister of the Environment? Why did the Minister responsible for the transportation of dangerous goods not follow it up with her officials or with environmental officials who should have reported, as should she have reported, to the Minister of the Environment? Why did she not maintain close contact with her officials and environmental officials to ensure that this matter was followed up?


Shirley Martin: Mr. Speaker, in Switzerland, there was concern expressed about toxic substances crossing the border. If the Right Hon. Member would read Hansard, he would see that I did not say toxic substances in fuel or gasoline. I said that Mr. Green had concerns about the transportation of goods across the border. They were not details, they were concerns. Those concerns were expressed to the Department of the Environment, which is responsible for environmental matters, and it took action within the Department.


RESPONSIBILITY FOR ENFORCING ACT
Right Hon. John N. Dirner@Leader of the Opposition: Mr. Speaker, is it not so that the transportation of toxic
goods across a border falls within the purview of the Transportation of Dangerous Goods Act? Does the Minister not recognize that she bears the highest responsibility for those officials, and in the circumstances, does she recognize no responsibility to the House or the country for not having followed it up with her officials or with the Minister of the Environment? Now we find that no one followed it up with the Minister of National Revenue who is responsible for Customs to prevent the stuff from coming across the border. Has the Minister no responsibility at all?


Martin Brian Mulroney: Mr. Speaker, I do not know why the Leader-


Some Hon. Members:: Oh, oh!


Martin Brian Mulroney: It is a novel occasion when the Leader of the Opposition rises twice during Question Period. It must be a matter of great importance.
The question was put to the Minister of State for Transport and I can tell the House and the country that she gave an answer of much greater clarity than the question of the Leader of the Opposition.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: I do not know why the Leader of the Opposition seems to find some virtue in tiying to nitpick about an answer of the Minister of State for Transport which was given with great clarity and great concern. The Minister of State for Transport has responded fully. The sequence of events was detailed with clarity and concern by the Minister of the Environment. The answers have been given in the finest traditions of the House of Commons. I would think that the Leader of the Opposition would be the first to want to honour and respect those traditions about which he speaks so frequently.


REPORT APPEARING IN OTTAWA CITIZEN
Mr. Brian Tobin (Humber-St. Barbe-Baie Verte):: Mr. Speaker, my question is directed to the Prime Minister. The Prime Minister stands on his feet with a smirk on his face and says that it must be an important issue because the Leader of the Opposition has risen twice during Question Period. We tell him to put away his smirk because it is an important issue. It is about toxic substances affecting the health of Canadians.


Some Hon. Members:: Oh, oh!
May 10, 1989


Brian Vincent Tobin: Mr. Speaker, if I can be heard through the braying jackals across the way, I want to quote the Minister of Environment from a newspaper report. I refer to The Citizen. The story said "But Green said he specifically told Martin and a Bouchard aide that toxic wastes were being transported across the border in fuels". Whether it was gasoline, home heating fuel, whatever it was, it had to be transported. We are not aboard the Enterprise. We do not beam it up or down.
I ask the Minister of State for Transport, given that she is responsible for the transportation of dangerous goods, given that she listened in with her cocktail glass in her hand, on a discussion of the movement of dangerous goods-


Some Hon. Members:: Oh, oh!


Brian Vincent Tobin: -why did she not undertake her responsibilities herself as well as advising the Minister of Transport?


Some Hon. Members:: Hear, hear!


Lucien Bouchard: Mr. Speaker, the Hon. Member just quoted a statement that Mr. Green claims to have made to one of my assistants. Since that assistant is not in the House and cannot defend himself, I may remind the House, and the Hon. Member that, as they know, yesterday this assistant publicly denied that Mr. Green made that statement.


ADVICE TO OTHER MINISTERS
Brian Vincent Tobin: Mr. Speaker, you would need the agility of a mental gymnast to follow the convoluted law of this Government. They have now got it that Mr. Green failed in his responsibilities.
Two months ago at an important environmental conference, a very credible individual told a Minister of the Canadian Government that there were suspicions of toxic substances being disguised in fuels of one sort or another.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Perhaps the Hon. Member could put his question.
Oral Questions


Brian Vincent Tobin: Yes, Mr. Speaker. I have a question for the Minister of State for Transport. Will the Minister clarify for the House today, beyond overhearing the conversation and telling us today that she overheard the conversation, did she take any other action? Did the Minister contact the Minister of the Environment or the Minister of National Revenue? Did the Minister advise the senior Minister of Transport? Did the Minister advise her own officials, or did the Minister finish her cocktail and go back home?


Mr. Speaker:: There are some things that are of course unparliamentary, and then there are other things that may not quite get there, but in the interests of fairness, we probably should be more careful. The Hon. Member for Skeena.


ALLEGED SMUGGLING
Mr. Jim Fulton (Skeena):: Mr. Speaker, my question is also for the Minister of State for Transport. Mr. Green has said very clearly that what he told the Minister was that there was toxic and hazardous wastes in fuels. Setting that aside for a moment, the Minister was told that toxic and hazardous waste was being smuggled across the border. With smugglers, it is just a suspicion of smuggling until you catch them. Why did the Minister of State for Transport not immediately tell the Minister responsible for the border, the Minister of Customs, that there was smuggling going on?


Lucien Bouchard: Mr. Speaker, one thing must be very clear. This general information that was given in Basle was immediately transmitted to Ottawa by a phone call to my Department. My Department is responsible for enforcing the transportation of dangerous goods regulations. That is why the action was taken by my Department in co-operation with the Ontario Government. It was immediately taken. Charges have been laid, and very rigorous inspections have been conducted at the border.


Some Hon. Members:: Hear, hear!


CONTRADICTION RESPECTING INSPECTIONS
James Ross Fulton: My supplementary question, Mr. Speaker, is to the Minister of the Environment. The Minister of the Environment said to my Leader a few moments ago that after the conference in Switzerland, the number of inspections were advanced. This was flatly contradicted yesterday afternoon by Environment Minister Bradley who said that the inspections were not related to Mr. Green's statements, but were already

May 10, 1989
Oral Questions
planned. How does the Minister explain that fundamental contradiction?


Lucien Bouchard: Mr. Speaker, there is no contradiction nor confusion except in the mind of the Hon. Member. What is true is that those inspections are routinely made in May and June each year. But this year, because of this, they were advanced. That is the only thing that happened.


TRANSPORTATION OF DANGEROUS GOODS ACT
Hon. Herb Gray (Windsor West):: Mr. Speaker, I have a question for the Minister of the Environment.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Having had a clear signal from the Hon. Member as to what his intention is, I would ask him to go ahead with his question.


Herbert Eser (Herb) Gray: Mr. Speaker, my question is to the Minister of the Environment. I thought it was always understood that while a number of Departments have responsibility to enforce Acts like the Transportation of Dangerous Goods Act, they have to work at the border in co-operation with the Department of National Revenue. If that is the case, why did the Minister and his officials fail to get the immediate and full assistance of customs people across the country such that they would do something effective on this? Why did the Minister of National Revenue and his people learn about this matter only on Monday? Is this not proof of a clear dereliction of duty by the Minister of the Environment and his Government?


Lucien Bouchard: Mr. Speaker, the information we received, which the Department received, was connected with the environment. It was about toxic substances that might or might not have crossed the Canadian border illegally. That is why the matter was handled by the Department of the Environment. There had been no fiscal implications so far. There is no connection between fiscal responsibility and the environmental issue.


REQUEST FOR MINISTER'S RESIGNATION
Herbert Eser (Herb) Gray: Mr. Speaker, if the Minister was really concerned about the health of Canadians, why did he keep these serious problems a
secret? Why didn't the Minister immediately get in touch with his opposite numbers at Customs and Excise? Why did he keep this important information to himself?
Mr. Speaker, the Minister is obviously not capable of performing his duties and should resign, and with him the Minister of State (Transport).


Lucien Bouchard: Mr. Speaker, I can assure the Hon. Member that I have no intention of resigning, and that with the support of the Prime Minister, the Cabinet and the entire Conservative Party, I intend to carry out this very important mission that we all have, which is to protect the environment in this country.


Some Hon. Members:: Hear, hear.


Mr. Speaker:: I wish to advise Hon. Members that there will be a single question from the Hon. Member for Winnipeg Transcona.


SAFE DRINKING WATER ACT
Mr. Bill Blaikie (Winnipeg TVanscona):: Mr. Speaker, I want to give the Minister of the Environment an opportunity to do something of a preventive fashion with respect to the environment instead of having to act after the fact, as in the case that we have been discussing.
The Minister will know of the concern of the citizens of Winnipeg about the potential damage to their water supply, thanks to the application by Consolidated Professor Mining to start up a mine in the middle of Shoal Lake in the drinking water supply.
Will the Minister rise in the House today and commit himself to using every federal power at his disposal, plus bring in a Canadian safe drinking water Act that will make this type of madness, having a mine that produces arsenic right in the middle of our water supply, impossible?


Arthur Jacob (Jake) Epp: Mr. Speaker, as a Manitoban, I share the view of the Hon. Member, that the drinking supply of Winnipeg must be secure. It is an issue that has been dealt with a number of times in the House and on a number of topics. In each case members of the Government have


May 10, 1989

made sure that the security of Winnipeg's water supply is not tampered with or compromised in any way.
With regard to the application the same condition applies. We do not want to have arsenic in the water supply. From our perspective, no approval should be given until every assurance has been given that the water supply is in fact safe.


PRIVILEGE
Hon. Don Mazankowski (Deputy Prime Minister, President of the Privy Council and Minister of Agriculture):: Mr. Speaker, I rise on a question of privilege. During the course of Question Period I think an unfortunate slur was directed, perhaps inadvertently, at the Minister of State for Transport (Mrs. Martin), and I am sure without any foundation whatsoever, by the Hon. Member for Humber-St. Barbe-Baie Verte (Mr. Tobin).
As a distinguished parliamentarian, and I am sure in keeping with the spirit of the traditions and dignity of the House, perhaps the Hon. Member may wish to reconsider, withdraw, and apologize to the Hon. Minister and to the House.


Brian Vincent Tobin: Mr. Speaker, I invite the submission of the Deputy Prime Minister (Mr. Mazankowski). I would not want to infer in any way, shape or form that the Minister was not alert, serious and all the other things Ministers should be in attending her conference out of the country.
I was using some imagery to suggest that the matter which I thought should have been paid attention to was not. If the Minister took any insult, I want to assure her that none was meant.


ALLEGED REMARKS DURING QUESTION PERIOD
Mr. John Nunziata (York South-Weston):: Mr. Speaker, during Question Period while my colleague the Hon. Member for Humber-St. Barbe-Baie Verte (Mr. Tobin) was making submissions, the Minister of National Defence (Mr. McKnight) uttered some very profane words, directed at my colleague.
Petitions
In the circumstances, Mr. Speaker, I would ask that you ask the Minister of National Defence to withdraw and apologize for the profane comments he made.


Hon. Bill McKnight (Minister of National Defence):: Mr. Speaker, if anything that was said during the heat of Question Period offended my colleagues opposite, I withdraw it, in the tradition of the House.


Mr. Deputy Speaker:: I thank all Members.



ROUTINE PROCEEDINGS


Mr. Stan Keyes (Hamilton West):: Mr. Speaker, I have the honour and duty to present a petition to the House, pursuant to Standing Order 36.
The petitioners call upon the Government to take whatever measures are necessary to ensure that sexual orientation is a prohibited ground of discrimination.
They also call upon the Government to introduce an amendment to the Canadian Human Rights Act to protect persons from discrimination due to their sexual orientation.


Mr. Vic Althouse (Mackenzie):: Mr. Speaker, I have two petitions to present to the House which have been duly certified.
The first petition calls upon the House of Commons to instruct the Government not to sign the Order in Council which would remove oats from the marketing jurisdiction of the Canadian Wheat Board and to place oats and barley under the Wheat Board Act in such a manner that in future farm organizations and Parliament must be consulted before such changes are made in the marketing of these products.


Victor Fredrich (Vic) Althouse: Mr. Speaker, the second petition is from residents of the Province of Saskatchewan.
The petitioners note that it was the Progressive Conservative Party of Canada which stated that the federal Government has the responsibility to ensure that rail passenger services in Canada be retained, modernized, and expanded as an important part of our national transportation system.
Therefore, they call upon the Government of Canada to live up to its original pledge to support VIA Rail, to

May 10, 1989
The Budget-Mr. Valcourt
abandon its plans for further cuts to VIA's budget, and to provide the necessary resources to allow VIA to operate as a modem, effective transportation company rather than as a museum piece.


QUESTIONS ON THE ORDER PAPER
Hon. Doug Lewis (Minister of Justice and Attorney General of Canada):: Mr. Speaker, I ask that all questions be allowed to stand.


Mr. Deputy Speaker:: Shall all questions stand?


Some Hon. Members:: Agreed.


Douglas Grinslade Lewis: Mr. Speaker, I would ask that all Notices of Motions for the Production of Papers be allowed to stand.


Mr. Deputy Speaker:: Shall all notices of motions stand?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Tuesday, May 9, 1989, consideration of the motion of Mr. Wilson (Etobicoke Centre) that this House approves in general the budgetary policy of the Government.
Hon. Bernard Valcourt (Minister of Consumer and Corporate Affairs):: Mr. Speaker, it is a pleasure today to take part in this debate on the Budget. This is a debate about our future. It is a debate about responsibility and about the kind of Canada we want for Canadians today and the kind of Canada we want to leave to our children.
Mr. Speaker, I must say I am also very pleased that Canadians were able to see the irresponsibility shown by the Opposition Parties during the last two weeks in their comments on this Budget.
Last month in the Throne Speech, the Government announced its agenda for the next few years, an agenda that emphasizes the Government's commitment to maintaining economic growth across this country, to continue to provide Canadians with a vast range of social programs, to protect the environment and to protect and strengthen the fundamental values that define us as Canadians.
At the time, as Hon. Members will recall, Members on this side of the House stressed the fact that the commitments in the Throne Speech could not be met unless Canada can rid itself of the intolerable burden that the national debt has become.
To understand what we are talking about, Mr. Speaker, I think it would useful to give a short overview of the budgetary process during the last fifteen or twenty years.
Up to the early 1970s, ministers of finance had more or less been able to balance their budgets, which was relatively easy because the economy was in good shape and money was flowing into the coffers of the Treasury. Because those were affluent times, the Government of the day was able to develop many social programs, to provide assistance to the needy, and to fight against regional inequalities. In those days, politicians had it easy. They could afford to be generous and please almost everybody. Those were happy years. But then, around 1973-74, the economy started slowing down. The good time was over with the oil crisis which had a considerable impact on finances, but our friends opposite who formed the Government at that time kept on managing the affairs of the State as if nothing had changed, as if nothing had happened, as though the Canadian economy was still going full speed. And that is when for the first time we started to run a deficit. The Leader of the Liberal Opposition can rightfully claim that he was the first to create annual deficits in this country. That is his legacy to Canadian men and women.
At first, the deficits were small. People thought that it was only a temporary phenomenon, but over the years, they quickly realized that these small early deficits had become enormous and when we assumed power in 1984, something nobody can deny, the annual deficit was close to $40 billion. And during the Liberal Government's last term in office from 1980 to 1984, the trust in the Canadian economy was at its lowest ebb, every month
May 10, 1989

the unemployment rate reached record highs; we had runaway inflation and skyrocketting interest rates.
Such a situation developed because these people pursued year after year short-term budgetary policies and demonstrated a lack of responsibility and courage in the management of the State's affairs. I would not want to be too harsh on these poor Liberals, Mr. Speaker, for on two occasions already Canadians have already passed judgment on the sort of management they pursued then and still continue to propose to the Canadian people.
Now, when I consider the economic record of the past four years, I must say I find it a little more heartening. Canada has experienced sustained growth over that period. Inflation has remained stable; over a million and a half jobs were created throughout this country; the unemployment rate is much lower and the economic outlook is much brighter. Contrary to a popular belief which those who are eager to divide Canada are trying to spread, the continued economic growth I am talking about was not limited simply to Southern Ontario.
Many people want to blame Ontario for all the economic problems some regions of the country may have now, but I believe that, looking directly at the facts, you will see that over the last four years, not only Ontario but all regions of the country benefited from the economic policies put forward by the Government.
In my native province of New Brunswick, Mr. Speaker, which is considered to be one of the disadvantaged regions of the country, New Brunswick and the Atlantic region benefited from the favourable economic climate created by the policies put forward in 1984 by the Government under the Finance Minister's leadership.
Since September 1984, Mr. Speaker, unemployment in New Brunswick, where I come from, has gone from 16.3 to 12.1 per cent. My fellow New Brunswickers will say that 12.1 per cent is still too much, but it is better than 16.3 per cent and this progress was achieved with our Government's economic program.
The growth rate in New Brunswick was higher than the national average during this period. And this year again, investment is expected to increase by some 16 per cent. Admittedly, some people wonder about it because many of us on the Government side talk with satisfaction about the Government's record. We often say that we
The Budget-Mr. Valcourt
created many jobs and that Canada's performance is unmatched by any OECD country. So why change, if there are no problems? I think the question is legitimate. That is where the importance of putting things in perspective comes in. We must make every Canadian aware of the financial realities facing us as Canadians. I submit to you, Mr. Speaker, that we in Canada absolutely must change our way of seeing things because we can no longer afford the luxury of living and operating on borrowed money, as was done systematically over the last 20 years.
In his budgetary projections and his Budget speech, the Minister of Finance (Mr. Wilson) used the phrase: to borrow from the future, which has always been the approach taken by the Liberal Party, while spending like there is no tomorrow is the solution proposed by the New Democrats. However, there comes a time when Canadians the New Democrats often talk about ordinary people, about the average Canadian, about unmarried mothers who have to work and have trouble making ends meet. The people in that Opposition Party, Mr. Speaker, talk a lot about the average person. The Liberal Party does too. The Liberals talked so much about the average Canadian that when we came to power in 1984, they left us a debt of nearly $280 billion.
In this Budget, the Minister of Finance and the Government are asking Canadians to look at the facts and face reality.

That is a sad reality. What we have been doing in the last 20 years has been literally mortgaging the future of our kids.
I have listened to Members opposite. They all seem to agree that we have a problem with the deficit. None of the solutions put forward by the Minister of Finance have been accepted or even endorsed by opposition Members.
I think one has to look at the financial picture and where the expenditures are taking place to see that this is indeed a tough job. If we Canadians cherish those social programs the way I believe we do all across Canada, I think we will have to make certain choices.
One thing is certain. For the time I am in public life I will not be an accomplice in mortgaging the future of my

May 10, 1989
The Budget-Mr. Valcourt
children and their children, which is what has been happening.
Hon. Members opposite, my good friends the Liberals and socialists, would do well to go back and speak to the people they claim to represent. I do not think they have a comer on representing ordinary Canadians as is their claim to fame. We know how well they served them in the past.
We on this side of the House were elected by ordinary Canadians. I was home on the weekend and spoke to a lot of ordinary Canadians in northwestern New Brunswick, Madawaska and the County of Victoria. I did not meet one person who took offence to the measure in the Budget to tax people earning above $70,000 a year so they would pay back some of the money given to them under family allowances and old age pensions.
I have not met one person in the streets of Edmund-ston, St. Basile, Grand Falls or Perth who takes offence to the fact that back home that great New Brunswicker whom I respect very much, K. C. Irving, should have to send back the old age pension that he receives every month. K. C. would not need it for his breakfast. I fail to appreciate and understand why, given the massive debt that we as Canadians shoulder, the people on the other side of the House are not applauding this measure introduced in the Budget of the Minister of Finance. If this is not done, then something else will have to be done. We cannot say that we will cut expenditures, reduce the annual deficit, and keep on spending like drunken sailors. We just cannot.
Members opposite will point to the odd expenditure which takes place about which the Government does not even know. There are stupid expenditures taking place out there, I recognize that. However, when we look at the broad picture and the transfer of moneys from the federal Government on to the taxpayers of Canada, they may think that they fool Canadians. Maybe they were fooling them for a while because they think that the money is coming from Ottawa. Ottawa is not giving anything to Canadians. It is just going into the pockets of Canadians, taking money, and redistributing it to the same taxpayers. There is no free lunch. The Budget is about just that. There is no more free lunch. We cannot keep on spending the way we have done without controlling the situation.

Mr. Speaker, I have heard a number of accusations coming from the other side of the House, and as far as I am concerned, I can say that in his Budget, the Minister of Finance has proposed a firm, realistic and responsible approach to our public finances, an approach this Government has been taking since 1984. The Liberals and socialists opposite would have Canadians believe that we just found out about the national debt, that this is the first time the Government ever mentioned the debt, and that we tried to hide this from voters during the last election campaign. Mr. Speaker, it takes a lot of nerve to make a statement like that!
During the election campaign, and it is all there on the record, the Prime Minister said on several occasions, including the morning when the election was called, that we had to tighten public spending and manage Government expenditures responsibly. The Minister of Finance talked about this. What is more, during the election campaign the Chairman of the Finance Committee said, when discussing the proposed national sales tax, that the Government would raise $18 or $14 billion more. This was Blenkam, the well-known chairman of the committee. This was quite a bombshell, Mr. Speaker, and imagine, the same guy who was shouting that the Minister was taking money out of the pockets. This went on for three hours during the election campaign. During the campaign, the white-collar Socialists and the Liberals were trying to scare people. They were indulging in intellectual terrorism across this country on the issue of the Free Trade Agreement. Even if we had wanted to talk about the deficit, they would never have given us a chance, because they just were not interested in Canada's finances. Those are the people who, during 20 years, have brought Canada on the brink of bankruptcy. It is the legacy which they left us.
Unfortunately, I only have two minutes left, and I would like to take this opportunity to invite my colleagues opposite to seriously consider-and I don't know if they can do that- supporting the measures contained in this Budget, because it is the turning point that will allow future generations of Canadians to benefit also from the government programs and services which our generation can enjoy today.
Mr. Speaker, you don't have to be a prophet to predict that if we do not accept these measures, if we do not adopt them, 15 or 20 years from now, it will no longer be 35 cents of each Canadian taxpayer's dollar that will be
May 10, 1989

spent on debt interest payments, but perhaps the whole dollar. We cannot do that to future generations of Canadians.
Mr. Speaker, I see that you are signalling me that my time has expired. I want to invite all members of this House to consider the seriousness of the situation and to support the measures proposed by the Minister of Finance (Mr. Wilson) in his Budget.


Mr. Marchi:: Mr. Speaker, we on this side of the House listened attentively for the last 20 minutes to the Minister's speech. It was very difficult to ascertain what was fact and what was fiction, since the Minister failed to tell the House and Canadians about a number of different issues that must be brought to bear on the Government.
Perhaps the Minister can explain why, during the last election campaign, members of the Government did not tell the facts to Canadians as they are telling them now. They are now very bent on telling Canadians how important the deficit is and how important it is to make sacrifices. They are now saying that it is important that cuts be made and that it is important to claw back on family allowances. They say how important it is to take back on pensions and increase taxes. If it was important in January and February of 1989, why was it not important enough to tell Canadians that in terms of the economic outlook in September, October, and November of last year?
If it is so important now to increase taxes, how can the Minister explain to his constituents, to average families in his riding out in New Brunswick, that if they happen to be on the lower end of the economic scale, earning $25,000 to $30,000 in terms of family income, they now have to pay more than 60 per cent in taxes than they did in 1984, after five federal Budgets?
In the very elitist neighbourhoods in his ridings and elsewhere people earning $100,000 and more will face an 8 per cent increase.
I would like him to tell the House and to explain to his constituents how fair that situation is, how fair that tax regime is. Perhaps Canadians will then have a fair and balanced overview of what the Government is actually trying to do.
The Budget-Mr. Valcourt


Bernard Valcourt: Mr. Speaker, I welcome a chance to answer my colleague from the Liberal Party. The way in which the Hon. Member put his question seemed to downplay the importance of the national debt, the debt that every Canadian, every kid, every person has to shoulder. He said that it was not important enough to speak about it during the last election campaign. I made the point, as did the Minister of Finance and the Prime Minister. We spoke about the deficit.


Mr. Crawford:: No!


Sergio Marchi: It was written in invisible ink.


Bernard Valcourt: The hon. gentleman says: "No". I invite him to read the speeches that were made during the campaign by different Ministers, by different candidates on behalf of our Party.


Sergio Marchi: Table them.


Bernard Valcourt: That is not the issue. This just shows how much in the past and how not forward looking is the Liberal Party of Canada. Members of that Party would rather deal with what happened in November when we had a challenge facing us from coast to coast about the debt situation that plagues every Canadian. No, this is not serious enough for the Hon. Member. He would rather stay in the past and talk about what happened. What is going to happen in the future is what matters.
The Liberal Party has failed to bring in a solution or to propose anything. The Liberal Party has completely failed as Canadians in this House to tell the Minister of Finance that it is wrong to do this, that this should be done instead. The Liberal Party has not done this because it has no clue of what is taking place. The finance critic for the Liberal Party had an opinion as to the fiscal situation, as to what the Budget should be. Every Member in that caucus, their leader included, have denied the words of the Hon. Member for Etobicoke North (Mr. MacLaren). He is not even allowed to ask a question in the House. How many days has that Hon. Member been silenced? How many days has the official critic of the Liberal Party been silenced in this House? Explain that to Canadians. Why is he muzzled? Why is the Hon. Member for Etobicoke North muzzled?


An Hon. Member:: Shirley Martin is being muzzled, not us.

May 10, 1989
The Budget-Mr. Valcourt


Bernard Valcourt: The finance critic for the Liberal Party may be muzzled by his colleagues but I think that he agrees with what this Government is doing. He talks about the increase in taxes. He asks the elitists. There are no elitists in my riding. We are all poor people. I met a gentleman during the weekend. I do not know his income but I believe he earns over $100,000, maybe close to that, and he told me he was going to have to pay $5,000 more in taxes next year on account of this Budget.


An Hon. Member:: He was happy.


Bernard Valcourt: He does not mind. He knows that if Canada-


An Hon. Member:: What is his name?


Bernard Valcourt: What is his name? I have too much respect for him to give it publicly but I will ask him and I will send you the name. I even know of another one who contributed a few bucks to my association because he was happy with the Budget. But I am not surprised that the Liberal Party does not understand and appreciate the real life that is taking place but Canadians out there do and they will approve of this Budget.


Mr. Deputy Speaker:: The Hon. Member for Saskatoon-Dundum on a question or comment.


Mr. Fisher:: Mr. Speaker, the previous speaker mentioned that on two occasions the Liberal Party has been defeated. I would suggest to the Hon. Member opposite that that also implies that the Conservatives have been elected twice. It is long past time that the Government opposite blamed anyone but itself for the economic problems this country is facing.
Since the Conservative Party was elected in 1984, the total federal deficit has doubled. It doubled in four years compared with the previous history of this country. Yet Members opposite stand there and blame Members on this side of the House, including the New Democratic Party, which they accuse of being socialist. I thank them for that because at least if nothing else the Member knows enough to call a spade a spade and a socialist a socialist, which is what we are.


An Hon. Member:: The "S" word.


Ron Fisher: The "S" word, yes. It is long past time when Members opposite can blame anyone else for the problems this nation is suffering except themselves. It wants solutions. There are solutions. Since the Conservatives were elected in 1984, the proportion of Government revenue from corporate tax has decreased from 15 per cent to 10.7 per cent. I would suggest that if the Conservatives were to put a little bit more fairness-and I stress little, because there was not much in it previously-back into the tax system, that some of the nation's problems would be alleviated as far as the financial mess is concerned.
I would also like to point out that as far back as 1962 the proportion of corporate tax was 26.1 per cent and the individual tax was a mere 34 per cent. It has now gone up to 57 per cent as of about six months ago, compared with 49.8 per cent when the Conservative Party was elected. Taxes for the individual in this country have gone up from 49.8 per cent to 57.7 per cent since the Conservatives were elected. That is taking tax revenue from the ordinary Canadian whose average earnings during that period of time decreased in real value by over 5 per cent.


Bernard Valcourt: How can the Hon. Member honestly stand up in this House and make that charge when the people in the socialist party claim to be so honest? He knows, if he cares to look at the facts, that what we inherited in 1984 was a debt that had risen from some $18 billion to $200 billion in 1984. What is dishonest and what I do not accept is a socialist standing up today telling us that we have let the debt go up in the last four years, when every single proposal made by this Government to reduce the deficit in the four previous years was opposed by every socialist. Every day in this House the socialists called for more spending. They think we grow money on trees. They are dreamers. They are dreamers who have no idea of what the reality is in this country. The socialists think that they can take-


An Hon. Member:: Tax the poor.


Bernard Valcourt: These are the same people who were governing Manitoba. Along came the socialists in Manitoba. Look at what happened in Manitoba. Those poor Manitobans. All those poor people below the poverty line. What happened during those great years of socialist government? The people were worse off.


Mr. Deputy Speaker:: The last question or comment to the Member for Calgary Northeast (Mr. Kindy)


Mr. Kindy:: Mr. Speaker, I have listened with interest to the Hon. Minister because I used to sit with him on the Justice Committee. I appreciate what he is saying but I have some problems with his numbers. In 1984, the deficit was around $180 billion. The projections for 1989 are $353 billion. The Auditor General has said that we might be short another $30 billion that is not accounted for. This would almost raise the debt to $380 billion. This is in five years. We have really doubled the deficit. I do not think this Budget really addresses the deficit and debt reduction. I am for debt reduction. I would like to see the deficit reduced but I think this Budget does not do it because we did not cut enough. This is my
May 10,1989

explanation to the numbers. For instance, we give tax breaks to big companies and tax deferrals, probably in the order of $35 billion. I think we should get that money back because we have a debt. It should be paid for. So I have some problem with his numbers. I would like him to comment on how the debt can be doubled in five years and at the same time say we did the proper thing was done. When the Conservatives took over, the over-all-


Mr. Deputy Speaker:: Could I ask the Member to conclude, please, as the time is running out?


Alex Kindy: In 1985, the total expenses of the Government were $109 billion. They are projected to be $142 billion. That is an increase of over $33 billion. I do not call that cutting the deficit and the debt. I would like him to comment on that.


Bernard Valcourt: Mr. Speaker, the Hon. Member says that we have not cut enough and he has a problem with the numbers. He points to the fact that the debt, he says, has increased during the last five years, and no one is disputing that. But if the Hon. Member cares to look at the figures, at the expenditures of the Government and at how much money goes to service that debt, there is the problem we face.


Jean-C. Lapierre: Cut.


Bernard Valcourt: The Liberals say cut, but every time a cut is proposed they yell for more money. We know and Canadians know from coast to coast that you cannot trust the Liberals to cut any deficit but you can trust the Liberals to mortgage the future of the kids of this country.


An Hon. Member:: They did it.


Bernard Valcourt: To come back to the Hon. Member from Calgary Northeast, who says there are not enough cuts, my own view on this Budget is that it is well balanced because of the regions of Canada. It is all right to say that we should have cut more, but if you look at the balance, these are serious cuts that will take effect on the fiscal framework over the next five years. The deficit will be cut by half by 1992-93 and that is, I think, serious
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progress in the right direction. The purpose of this, as the Minister of Finance has indicated time and time again, is to allow the growth in Canada to continue to ensure that we can generate enough revenues to pay the interest on the debt and also to afford needed programs for Canadians from coast to coast.


Audrey Marlene McLaughlin: Mr. Speaker, I rise today to speak on the motion that the House approves the budgetary policy of this Government. I will be speaking against that motion because I do not think that middle income and low income earners in Canada would support this motion on this budgetary policy. I think they would say no to this budgetary policy. The homeless of this country would say no to this budgetary policy. The one in six children who are living in poverty would say no to this budgetary policy. Those who are unemployed and who see the Minister projecting that 8.2 per cent unemployment in this country for this year is an acceptable level would say no to this budgetary policy.
This is what has led to a lack of trust in all the policies of the Government and, in particular, this Budget. When taxpayers look at what is happening and see that in 1985 a family whose assets are valued $6.2 billion received a $500 million tax break, they do not have much trust in the Canadian Government and its policies.
Since 1984, the budgetary policies of this Government have meant that corporate taxes have increased by eight per cent, personal income tax by 45 per cent and sales tax by 67 per cent. I do not support this budgetary policy and I believe that Canadians do not support this budgetary policy.
I would like to speak particularly to some issues in this Budget having to do with northern Canada, those areas that are more remote and, as a consequence of this Budget, will experience even more severely the effects of it. This refers not only to northern areas like my own, the Yukon, the Northwest Territories, but also to many rural parts of Canada.
Let me outline just a few issues to illustrate why it would be impossible to support this kind of budgetary policy.

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The Budget-Ms. McLaughlin
First, a simple item to some people, a one cent increase in tax on aviation fuel. The Yukon Government has been working veiy hard to reduce the cost of fuel in the Territory because it is of vital importance to northerners where we have long distances for commercial transportation as well as for communication between communities. The impact of the one cent a litre increase will be substantial. It will be substantial for those small business enterprises, such as outfitting and trapping, which depend on not just aviation fuel but other fuels as well to which an additional tax has been added.
Tourism is a major industry in the North. Most of Yukon's tourist travel is from the United States and Alaska as well as from southern Canada. In surveys several years ago tourists cited gasoline costs as one of the most prohibitive reasons regarding their ability to travel in the North. When we talk generally about travelling in the North, I want to remind Members that we are not just talking about a Sunday drive, we are talking about the life line to remote villages. Our dependence, for example, on the Alaska Highway for ground transportation of goods into the Yukon as well as to transportation by air.
A second example is that of the telecommunications tax. Last year when the Government imposed a 10 per cent telecommunications tax covering all long distance calls as well all calls made by business, it was devastating for many individuals and businesses in the Yukon. Studies have indicated that Whitehorse residents pay as much as three times more on telephone services than residents of southern Canada. Last year, the first year after the telecommunication tax was imposed, it cost Yukoners, and we are talking about a very small number of people, $4.5 million in extra costs for essential phone service. This year the projected cost is $4.75 million. To northerners, long distance phone service is essential in the same way that local service is to southerners.
Such things as the use of mobile and radio phones in many northern and rural areas is veiy common and necessary for safety reasons, business reasons, as well as for personal reasons for making appointments with the doctor or school teachers. All of the calls made on those phones are taxed because all of them are considered to be long distance calls. It is clearly an unjust and inequitable measure instituted by this Government.
Another area is that of the increased tax on building materials. Building materials in the North and in many rural areas and northern parts of the provinces, both because of the transportation costs to bring those materials to source, are extremely expensive. A tax from 8 per cent to 9 per cent, as provided for in this Budget, is not fair. It is also harmful to the development of the northern economy.
This leads me to make a few comments on the whole aspect of regional development and the philosophy that this Budget embodies about this Government's policy toward development of our country in a national sense beyond central Canada. The Government has broken its promise to the far-flung regions of Canada with its assault on regional development and its cut-backs of over 40 per cent over a period of time.
The other issue which affects all Canadians, not just simply northerners, is the whole question of taxation. This Budget, as I mentioned earlier, has been seen as the biggest tax grab in Canadian history. But it is a tax grab on one particular group, a tax grab on the middle-income to low-income earner. It is a claw-back on senior citizens as well as on families. It is certainly not a tax grab on large profit-making corporations. I will mention several examples of this, particularly in terms of the inability of this Government to institute tax fairness. It is fine to talk about tax reform but the reforms have been very minimal on the high-income earners and profitmaking corporations in this country and have been maximized on the individual who is now paying the largest percentage of tax.
The Government, in order to indicate that it was going to tax the wealthy at a greater level, put an additional surtax on Canadians making over $50,000 a year and an additional one on Canadians making over $70,000 a year. In principle that may be all right except that we have to look at the facts and see that over 6,000 upper-income Canadians do not pay any tax at all. A surtax on nothing is nothing and 8 per cent of zero is zero. Those wealthy whose tax lawyers are not quite up to scratch can afford to pay a bit more. After all, since the Government came to power in 1984, the richest 1 per cent have had an average tax cut of $3,500. This is not tax fairness, this is not a policy, this is a tax grab.
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On the other hand, the question of a surtax for all Canadians is an interesting one and is an illustration of the Government's inability to keep its promises. When the surtax was imposed on income, we were told that the general national sales tax would replace the surtax. Now we are being told that it will not replace it. The surtax will stay on. I suppose one might say that we were naive and wanted to believe that a certain tax measure that was imposed might at some point be withdrawn, but clearly the Government has gone back on this promise.
In addition, Canadians, through other attacks on social programs, will be paying more. Unemployment insurance is a good example with a 15 per cent hike in premiums, premiums that are now to be paid by the employer and the employee. All of these tax measures, and we are not yet talking about the sales tax but the increase in gasoline taxes, the increase in fuel taxes, the telephone communications tax, the increase in excise taxes, will mean a decrease of well over $700 per year for Canadian families.
Sales and excise taxes have also gone up. Again, we are told that when the national sales tax comes in, the manufacturers' sales tax will no longer be in place. That tax has gone up from 12 per cent to 13.4 per cent. Even at that level, more is being paid.
When we add on the new sales and excise tax, a regressive form of tax which hits low-income earners as well as high-income earners, we see that taxes have climbed 62.4 per cent between 1984 and 1988. When we add on the new sales and excise taxes, consumption taxes, those hidden taxes, it will have increased an astounding 171 per cent since the Government came to power. Support this budgetary policy? Hardly.
These kinds of taxes affect northerners more severely. First, the cost of living is about 30 per cent to 50 per cent higher depending upon where one lives in the Yukon or Northwest Territories. All of these measures will have an exponentially higher effect on the taxpayers of the area and on the cost of living in the area. Clearly, this will lead to an inflationary cost of living for northerners.
Some measures such as the sales tax credit have been built into the Budget. However, those will not address the issues of the majority of northerners. Because of the higher cost of living, many people are already making higher salaries so the sales tax credit will not kick in at the level that really is the poverty level in a place like the Yukon. As well, the claw-back of old age security and
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family allowances will have a similar effect on the cost of living in the North.
Earlier, I mentioned unemployment insurance and the effect this budgetary policy will have on the development of regional economies. Unemployment insurance will cost Yukon employers and employees approximately $2 million a year, or $65 for every man, woman and child in the Yukon. That is an insupportable cost to enhance business development.
At the same time, the Government went back on its promise to institute a national child care program. This will have very severe effects for all Canadians, not just those in the regions. We will have a very short-term gain but very long-term pain if we do not care about our children now, if we do not provide the resources our children deserve so that they will become productive citizens themselves.


An Hon. Member:: An investment in the future.


Audrey Marlene McLaughlin: My colleague says that it is an investment in the future and he is absolutely right. It is an investment in education, child care and health. The Budget is saying that that is not an investment, we should cut back on that. However, that is an investment in the future. We are not simply looking for a shortterm gain. We are looking to build a nation for the future.
Finally, I would like to say a word on the national sales tax which is to be instituted, it appears, without the co-operation of the provinces at this point. Even such organizations as the Canadian Federation of Small Business have pointed out what a severe handicap this will be for many of the small businesses which exist in my riding. They will find the bookkeeping involved in collecting these taxes extremely expensive as well as an added burden. What about music teachers who give music lessons in their homes? We will make Canada a nation not only of taxpayers but of tax collectors. We will all be running around trying to figure out how to collect taxes when we provide a service such as teaching music.
I am particularly concerned that national conservation and alternate energy initiatives will be phased out by 1990-91. How can the Government say that it is concerned about the environment when Government support for the development of alternate energy sources will be phased out? We held an emergency debate during which many Hon. Members from all sides of the House spoke of their concerns over the oil spill in Valdez, Alaska, and its environmental consequences. What is the

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The Budget-Ms. McLaughlin
Government doing? Is it putting more resources into alternate energy sources? No, it is taking them out.
How can the taxpayers trust the budgetary policy of the Government? I say they cannot. Previous speakers have talked about the debt. We are all concerned about the debt. It is important and we want to see it addressed.
I have some suggestions. What about a 20 per cent minimum corporate tax on profit-making corporations? What about not spending $2.7 million on advertising to convince us that we have a deficit? We know we have a deficit. What about that $3 million that we spent to have the post office convince us that it is great for us to privatize and take away our services, lower the wages of workers and try to destroy the postal system? There are three examples alone if the Government is looking for alternatives.
I would like to conclude by saying that the budgetary policy of the Government cannot be trusted by Members on this side of the House. It cannot be trusted by Canadians. It is a litany of broken promises. It is not a budget for the future, it is a budget for an immediate tax grab and in the long term, it will create inflation and higher unemployment, and it will have very serious consequences for Canadian taxpayers.


Mr. Gray (Bonaventure-Iles-de-la-Madeleine):: Mr. Speaker, I commend the Hon. Member on her speech. I understand that perhaps she has aspirations of going further in the New Democratic Party, and I wish her the best of luck.
It would be fair to the House if we were to understand where she is coming from when talking about the Budget that was introduced by the best Minister of Finance (Mr. Wilson) this country has ever known. She suggested that we impose a 20 per cent extra tax on the rich people of Canada. That would involve a certain amount of money. That would be the proposal of the NDP and the Hon. Member, should she become the leader of that Party. The philosophy of this side of the House is that to balance the Budget the Government must on one side cut its operations and administration of programs, and on the other side tax. If the NDP Party believes that we must balance the Budget and attack our global national
deficit, could the Member give us some figures as to how she would bring our annual deficit down to zero?
Second, Mr. Speaker, I would ask the Hon. Member for Yukon, assuming that she does have aspirations to the leadership of her Party, where she stands on the Meech Lake Accord since the Province of Quebec would be brought officially into our constitution and into our Confederation. What does she think would be the state of investor confidence in the Province of Quebec from outside the country and from other provinces?


Audrey Marlene McLaughlin: The first thing that I would do in order to reduce the debt, which this Government has doubled since coming into office, is to not elect Conservative and Liberal Governments that first created the debt and then continued the debt. That would be the first thing that I would do.
Since the Member opposite is interested in political ideology, when the New Democratic Saskatchewan Government was in power, it had a balanced budget. When the Manitoba New Democratic Government was in, it had a balanced budget. When the New Democratic Government of British Columbia left office, it had a $300 million surplus, and social democratic countries such as Sweden not only manage to have a balanced budget, but to have an unemployment rate of under 3 per cent.


Some Hon. Members:: Hear, hear!


Audrey Marlene McLaughlin: However, I will list again for the Member some specific suggestions because he may wish to take notes. The first suggestion that I mentioned is something that has been instituted in the United States. I do not always like to use the United States as a model but under Ronald Reagan there were some good ideas. The first is a 20 per cent minimum corporate tax on profit-making corporations. When you look at the deferred taxes that corporations have outstanding, which I believe is at $36 billion at the moment, that is higher than the deficit. If we were to charge interest on those deferred taxes, that would be a way to raise revenue. I pointed out in my speech that a lot of money is spent trying to sell Canadians on this Government's policies such as the $2.7 million spent to sell us and tell us that there is a deficit, the $3 million spent by Canada Post to
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try and convince us that privatization is a good thing. It seems to me, Mr. Speaker, that there are several evident ways that one could reduce the Budget.


Mr. Thompson:: Mr. Speaker, I would like to point out to the Hon. Member for Yukon (Ms. McLaughlin) that since the election of the Mulroney Government in 1984, there has not been a Government in the country that has spent more money in her area than our present Government. We have spent money to help her people, especially the native people. We have done it in a number of ways. But we must pay our bills and gather the revenue necessary for this country to operate. I agree that it is unfortunate that we must pay tax, and it is unfortunate that we must have a federal sales tax, but I really cannot see the basis for her argument when she discusses the federal sales tax and the goods and services tax that we are going to implement. She should realize that we are going to reduce the amount of federal sales tax. Regarding the 13.5 per cent example to which she referred, it is going to be reduced to 9 per cent. So where is the logic in her argument? Is it going to be more burdensome for the Canadian people to carry 9 per cent versus a 13.5 per cent rate of tax?
It is great to complain, but let us have some solid suggestions. There is an old expression "Everyone wants to complain about the weather, but no one wants to do anything about it''. It is the same with taxation. Members opposite complain about taxation. However, they do not want to do anything about it. The bills in this country have to be paid. The Minister of Finance (Mr. Wilson) has taken steps to ensure that we are taxed fairly and evenly across this country from one end to the other. No area has benefited more than the northern areas under the present taxation formula that the Minister of Finance has put forward. He will continue to put it forward to ensure that the northern peoples, all people from one end of this country to the other, are treated fairly, equitably and receive the types of services and programs that they deserve.
In relation to the argument on the child care Bill, we all know what happened to the child care Bill in the last Parliament. We passed the legislation. We brought it forward. It was passed here in this House of Commons. However, it was killed in the Liberal Senate, her friends to her right. The Minister noted last week that we will bring that legislation forward in the Thirty-Fourth Parliament. I am sure that when parliamentarians see that legislation, read it and interpret it, they will be very
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proud of it. Many of the concerns that the Member for Yukon has expressed will be addressed in this Thirty-Fourth Parliament.


Audrey Marlene McLaughlin: I do not believe, Mr. Speaker, that I heard a question, but I did hear something about proposed alternatives. I would say that there are a number of alternatives that could be proposed. This Government should support the aspirations of aboriginal people. It should ensure that land claims are settled, ensure that the compensation through land claims is carried forward so that aboriginal groups can become self-sustaining, can develop economically as they wish to. That is a very large part of what this Government can do.
In terms of the child care Bill, I would remind the Member that at the standing committee which heard submissions on child care, not one of the 39 groups that appeared before that committee approved of the Government's child care Bill. There was a general community consensus of professionals and others who work in that field that this Bill would not address the child care needs of this country.


Some Hon. Members:: Hear, hear!


Alex Kindy: Mr. Speaker, I listened with interest to the speech of the New Democratic Party hopeful. I would Idee to have her comments on how the national sales tax and the goods and services tax would affect the northern people. I personally believe that there is an inflationary component to that tax, and the compliance costs would be extremely high for Canadians, probably about $4 billion. It would put small farmers and small businesses at a disadvantage compared to big businesses. Small farmers would be required to issue invoices on all sales, and maintain records of taxes paid on all inputs. This would create a lot of cost to them. It would as well put in difficulty small businesses compared to big businesses which already have excellent accounting systems. I would like her comment on that.


Audrey Marlene McLaughlin: I basically agree with the comments of the Member opposite. We do not have many large corporations, other than perhaps mining, in many of the northern and more remote areas. They have a very narrow profit margin. They also have a great profit problem. I believe last year there was a study by the Canadian Federation of Independent Businesses trying to have them identify their major problems. Something like over 70 per cent said that their major problem was paperwork for the Government. This will increase substantially, and many businesses in my area certainly would not be able to hire extra accounting services. It is a very severe concern for people in that area. When I say small business, we could be talking of a two-person

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The Budget-Mrs. Anderson
business, a three-person business needing not only additional accounting resources, but a whole new training on this. It is going to be a complex procedure. It is not clear yet what the mechanisms will be. It will be a substantial cost to small business. I can assure the House that it is a substantial concern to small business people at the moment.


Mr. Deputy Speaker:: Resuming debate with the Hon. Member for Simcoe Centre.


Mrs. Edna Anderson (Simcoe Centre):: Mr. Speaker, it is a great honour to rise to debate in the House today for the first time as the elected representative of the constituency of Simcoe Centre. I do so with a very keen sense of history.
It was 72 years ago that my grandfather, the Hon. James Chaplin, Conservative Member of Parliament for Lincoln, and Prime Minister Arthur Meighen's Minister of Trade and Commerce, sat three rows down and four seats over to do likewise.
Today, in the throes of embarking upon my new career, retirement now long behind me, I reflect on the counsel he gave to me as a child. He spoke of Canada. He spoke of building a better Canada. He spoke of building a better Canada for future generations, for his granddaughter's generation. Today, in that very same spirit, we are here in an attempt to demonstrate how we view our legacy.
The Budget we are now debating speaks to passing on to our grandchildren a nation better than we found it. Although I am new to this place, I have lived my life and raised my children in a part of this country where it is understood that one does not live beyond his or her means. I understand that. My constituents understand that. They know that we cannot keep borrowing simply to pay the interest on what has already been borrowed. In the real world one goes broke or becomes bankrupt when those loans are called in, and then there are no choices.
As a nation our flexibility to pay for caring and compassionate social programs would be eliminated. Our ability to compete in the world would be eliminated. Our
choices of how we want to live as a nation would be eliminated. Governments would have to raise more and more money out of everybody's pocket just to stand still. That money would not go to social programs, or to alleviating regional disparities, or to defending our nation. It would simply go to paying the interest, not the principal. So taxes inevitably go up, and so would inflation and interest rates. Programs would be decimated as we spent just about all our revenues on merely the interest.
As the television commercial states: "You can pay me now or you can pay me later". The problem is that it is not those of us here today who will be paying more later. It will be our children and our grandchildren.
The Government and the Party I have the privilege to represent understand that. We know why we are here. We know our responsibility goes beyond the next election or the next leadership convention. We have acted.
The growth of the public debt which averaged 23.5 per cent a year over the four years ending in 1984-85 has been reduced to an average annual growth of 12.7 per cent over the four years just ended. By 1988-89, the growth in debt will have declined to 9.9 per cent. That is the first time in 15 years that the debt growth has been less than 10 per cent. However, if controlling the public debt is our objective, then deficit reduction is our means.
From 1984 to 1989, the budgetary deficit was reduced from $38 billion to $29 billion. Relative to the size of the economy, the deficit fell from 8.6 per cent to 4.8 per cent of Gross Domestic Product. The provisions of this Budget, along with sustained economic growth, will reduce the deficit to $15 billion in 1993-94. This is very real progress indeed.
By carefully balancing revenue increases and expenditure reductions, the Minister of Finance (Mr. Wilson) has put before the House a comprehensive plan for addressing the national debt. Not driven by some blind allegiance to antiquated micro or macro-economic theories, the Budget has as its reason for being the need to preserve for future generations-for the grandchildren-an ability to continue to make choices. The Government knows all about making choices; the right choices.
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Recently, the Minister of Employment and Immigration (Mrs. McDougall) announced a new labour force development strategy for the 1990s. It will be based upon consultation with the private sector to design programs to train Canadians and upgrade their skills in order that they can better meet the demands of a quickly evolving labour market.
I am a strong supporter of the Budget precisely because it will allow future generations the ability to make excellent choices like these.
In a similar light, it recently was my honour, on behalf of the Minister of Employment, to announce in my constituency federal funding to the Barrie and District Industrial Training Council for use to help launch an experimental job skills project in participating secondary schools throughout Simcoe County.
Skills Canada is intended to improve the image of manufacturing careers, and provide an incentive for students to pursue technical careers boosting enrolment in many technical colleges and schools, while providing technical workers for industrial growth. This program is unique in Canada and the Government has shown innovative leadership by providing the start-up funds.
Last week, 12 Simcoe County students specializing in 12 different technical areas, travelled to Columbus, Ohio to participate in an international skills competition. Their results were impressive. Competing against 1,200 others, they placed in the top third of the competition. One student even came home to Huronia with a bronze medal.
Just as programs like these assist today's generation to make necessary choices, so in turn do future Governments and future generations need the ability to do the same. Let there be no mistake that this is far more than the usual Budget debate over tinkering at the edges. This is a debate about the very future, the economic future, of our nation.
It is a debate between those on the other side of the House who take no responsibility for that future, and who did not even when they were in office and had that responsibility, and those of us who say, simply, that it is time to pay our way, time to make the tough choices so that our grandchildren can determine what type of Canada they want.
It is time to stand up and be counted. It is time to decide whether political expediency counts for more
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than our grandchildren's future. I have listened intently to this debate for the past several days. I have heard absolutely nothing from the other side of the House to indicate anything more than what some call political posturing.
What has the Opposition been saying throughout this debate? It is simple. It has been taking the easy route. Nobody likes tax increases, so it says cut taxes. Nobody likes spending cuts, so it says do not cut expenditures. But where is there responsibility to the nation? Who speaks for the grandchildren? How big a burden is it willing to put on our grandchildren in its single-minded pursuit of the immediately popular?
Every minute, every hour, every day the debt compounds and we, everyone of us in this country, go deeper into debt and must dig deeper to pay the interest.
Only by getting it under control, only by taking the tough decisions now while we still have a chance, can my grandchildren expect to have the life my grandfather dreamt of for me. The choice is ours. It is ours here and now, not at some indefinite point in the future when it will be too late.
For the sake of the grandchildren, we must make the right choice.


Mr. Brewin:: Mr. Speaker, let me congratulate the Hon. Member on her speech. I must say, however, that if the Government was really serious about the deficit in this country it would be attacking the great tax giveaways that have been in place since the days the Liberals were in office. The give-aways to corporations in Canada now amount to some $34 billion. These give-aways have been determined by economists to be completely uneconomic.
If the Government was genuine, it would introduce a minimum corporate tax. Instead, we see the crocodile tears shed about the deficit, which I may say, are shed for a deficit which has largely remained untouched by this Budget. Instead we see a Government that is repudiating its election promises to the people of Canada. It is repudiating solemn commitments made to Canadians. The commitment on child care has been repudiated. The commitment on social programs has been repudiated. Its commitments on regional programs have been repudiated. Its commitments on unemployment insurance have been repudiated. Its commitment on official devel-

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opment assistance has been repudiated. A sacred trust on universality has been repudiated by the Government.
If the Government was genuinely going to tackle the deficit, the Budget should have attacked the tax giveaways that have dominated the unfair tax system that this country has had for so long.
Let me conclude by making some specific reference to the impact of this Budget on Victoria. We have seen the CBC cut-backs move further back the commitment which has been made for over 35 years to the people of Victoria for CBC facilities. We see the Government beginning to edge away from its commitment on the Polar 8. We hope that is not so. We will fight hard to ensure that it is not so.
We see the threat, now reported to us by the Conference Board, of an economic slowdown as a result, just as our community is beginning to work itself out of the 1981-82 deficit. We see the E and N Railway under threat as a result of this Budget.
Will the Hon. Member comment on the failure of the Budget to deal with what is on all sides understood to be the critical issue of the environment? Why is there nothing in the Budget for the environment?


Edna Anderson: Mr. Speaker, I believe the Hon. Member has not read the Budget in its entirety. We certainly have been taxing those with higher incomes and we certainly are protecting those with lower incomes.
The environment is most definitely included in the Budget. It is my priority. We must not forget that we are looking after the future of our grandchildren. The time to do it is now. We have to tighten our belts.
Our social programs have been definitely kept intact. Certainly those who are in need will be well cared for.


Alex Kindy: Mr. Speaker, I would like the Hon. Member to comment on the goods and services tax. It will be introduced in 1991, with approximately 9 per cent on all goods and services. This tax, in the words of the Minister, will probably bring in revenue of $23 billion. Does the Hon. Member feel this tax is fair to consumers? Does she approve of this type of taxation?


Edna Anderson: Mr. Speaker, the new goods and services tax will be replacing the present manufacturer's tax. Very few people realize that the manufacturer's tax, aside from being very unfair and a burden at roughly 12 per cent, will be removed entirely before the 9 per cent
goods and services tax will be implemented. Just that one tax will be paid by the consumer and it will be much better.


Ron Fisher: Mr. Speaker, I want to congratulate my fellow committee person the Member for Simcoe Centre (Mrs. Anderson) on her speech.
Will she tell us the source of financing for that very commendable school program that took place in Barrie? The kind of training the young people receive today to prepare them for the future is certainly commendable. The competition in which they participated in Columbus, Ohio, is an exemplary example of the talents of our young people. If only we had the jobs to be able to make use of those talents.
What is the source of the funding for the program in Barrie? Second, can she assure Members of the House that after this Budget similar financing will be available after January, 1990, for similar programs?


Mr. Deputy Speaker:: The question and comment period must be addressed to the speech of the Hon. Member. I do not recall if the Hon. Member mentioned specifically the issue that the Member for Saskatoon- Dundum has raised. The Member may reply if she wishes.


Edna Anderson: Mr. Speaker, the Skills Canada Project is financed through the federal Government and through industry as well. It is assisted through the educators in our community. We are hopeful that this program will be adopted throughout the country. It is highly successful and has made young students who are at the drop-out stage and really do not have a yearning to go to university aware that technical schools do exist. They can earn a good living and be trained.
The industry is providing assistance on a co-operative basis, taking students into their industries or providing supplies through what I believe is called "adopt a shop". It has been a very successful project in our area and I am extremely excited about it.


Mr. Joseph Volpe (Eglinton-Lawrence):: Mr. Speaker,
I am honoured to rise today to represent the views of my riding, Eglinton-Lawrence, on the Budget. I do so with some sense of anger. I say anger because my constituents, so Canadian in their willingness to work themselves
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out of crises, so trusting in Government to apply the same principles of reason and responsibility to their accounts, and so accommodating in their contribution to the common weal, have themselves in anger deluged my office with objections to a Budget that they define as a blueprint for disaster.
I would have preferred that it had not been so, that the Ministers of our Government might have erred here and there. After all, we cannot accuse them of being more than mere mortals. But so pernicious is the all-pervasiveness of fault in procedure, thought and in context, that my constituents of Eglinton-Lawrence no longer want me to merely criticize the Budget but rather to work to bury it.
What other end could be expected of a document that is so without indication of planning for the country's future, so bereft of courage in addressing the challenges of tomorrow, so senseless in its direction or so mean in its spirit? My constituents, who can be best characterized as having a self-help approach to problem solving, are asking if this reactionary-and I mean it in a social and economic sense-Conservative Budget has as its only purpose the demonstration that a Government incapable of comprehending larger social economic goals is still petty enough to say: "We won the election. Now we will rub your noses in it".
We have seen ample examples of this cavalier smallmindedness by the Government over the last four years when Canada has experienced some fortuitous, even if localized, healthy growth in the economy. Some would even call it unprecedented growth.
Of course, there was an accompanying windfall in government revenues, as more Canadians entered the labour force and were gainfully employed in their own enterprise or in the enterprise of others. At the same time, there was a diminution of people who were dependent on social programs. A reasonable individual might have expected that the Government would have seized the opportunity to use good times and profits to alleviate the disparities and to invest in Canada's future. Not so. Instead, Tory myopia set in.
Employment training decreased by 27 per cent over the last four years from $2.2 billion to $1.6 billion. Tory
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support for R and D, so vital to international competitiveness, actually decreased over that period of time.
However, what could we expect of a Conservative Government that sat back as self-interest in the marketplace generated a concentration of wealth so unchecked that mergers and takeovers increased by some 48 per cent and, now, the top 25 firms control 35 per cent of Canada's economic assets?
Could one expect any less of a Government that saw fit to increase taxes on lower-income and middle-income families by some 62 per cent while inflicting-and I choose the word guardedly-families with annual incomes of over $100,000 or more per annum with a mere 8 per cent increase in taxation? Instead of planning for the future the Tories attempted to solve short-range financial problems by pillaging our earnings.
I know that Hon. Members, colleagues on both sides of the House, wonder and ask themselves would that the Tories had applied such meanness evenly. Unfortunately, the middle and lower-income groups, as we have seen, have borne the brunt of tax increases while corporate earnings were only taxed by some 28 per cent during the same period. In fact, these same businesses which pay roughly $11 billion to $12 billion in income taxes received almost $9 billion in subsidies, grants and tax write-offs in 1987 alone.
Thinking Canadians in Eglinton-Lawrence, as elsewhere, are aghast when they learn that corporate income taxes as a proportion of GDP have actually decreased by 4 per cent under the Tory Government while personal income taxes have increased by 24 per cent-the highest tax increases in Canadian history. For what purpose? The Government certainly did not address the debt and, if we accept the figures of the Minister of Finance (Mr. Wilson) himself, not even the deficit.
The public debt of $177 billion that represented 45 per cent of GDP in 1984 has ballooned under these great managers, these all-seeing visionaries, these all-knowing builders, to $321 billion, and 55 per cent of GDP in 1988, and growing. A $29 billion deficit forecast for 1989 is still $1 billion higher than it was last year, even after tax increases.

Why did'nt the Minister of Finance and his Government address the major problems of the Canadian

May 10, 1989
The Budget-Mr. Volpe
economy? Why did'nt they concentrate their efforts on the quality of this economy and what is necessary to make it a success over the next five or ten years?
With this Budget, the Minister should strive to provide the economy with flexibility and diversification, unless it can increase the wealth of this country to improve the welfare of all Canadians men and women by progressing on several fronts at the same time.

Yet over the next five years the 10 occupations expected to contribute the highest number of new jobs are in the medium to low-skilled positions where the remuneration is below the weekly average. I ask government Members this: Whose kids are being targeted for those jobs? Whose children are being slotted for such a future?
The Minister of Finance bold-facedly says that this Budget aims to increase the level of unemployment, a level already on the upswing in seven out of ten provinces. Canadians must surely find it hard to appreciate knowing, as they do, that approximately 60 per cent of that unemployment currently represents and is attributable to job mismatching.
Approximately 600,000 job vacancies go begging. That figure represents the highest percentage, the highest total, since 1966. Some 300 categories of skilled jobs are not being filled, and in many areas the situation is not improving. In fact, it is getting worse.
As an example, the average age of tradesmen in the construction industry, which is so vital to the growth of many of our big metropolises, such as Toronto, Montreal and Vancouver, is 55. Worse, Canada's illiteracy, as we have seen evidenced by one in six adult Canadians, costs businesses some $4 billion annually, and society as a whole a total of $10 billion.
The results for Canadian productivity are as obvious as they are harsh. Anticipated growth in productivity of a paltry .7 per cent over the next four years is predicted when a competitive position in the global economy requires 1.5 per cent to 2 per cent growth.
Canadians will be forgiven for their skepticism and their cynicism when Tory propaganda, which my hon. colleague to the left has indicated is costing Canadians
$2.7 million, aims to convince Canadians and all of us in this Chamber that their Government is in a bind and must tax its way out. The past four "fat cat" Tory Budgets declined to meet the minimum standards of sound economic management.
The sins of omission read like a litany of betrayals for Canadians: No comprehensive job training, no national educational strategy; decreased support for R and D; insufficient support for export-based manufacturing industries; deregulatory policies that favour monopolies to the detriment of competitiveness; disproportionately heavy taxation of the two groups with the greatest input in the economy-and I refer to those two income groups at the lower and middle spectrum-the abandonment of any industrial strategy that might have increased the softer lines of all-Canadians, widened the tax base and reduced dependence on Government programs.
Where budgets in the past have buttressed the infrastructure of our society, provided impetus to growth and instilled confidence at home and abroad, this Budget perpetuates that sense of drift now so characteristic of Tory governments. The errors of omission are compounded by a perversity of commission in this Budget. The Minister has set in motion the dismantling of the infrastructure that binds this country and gives it that chance of survival in the face of continental pressure.
We see that the private sector will soon rule over Air Canada and the Post Office. Gone will be VIA Rail and an equitable employment insurance system as the Government withdraws from the economy.
Moreover, this Finance Minister (Mr. Wilson) refuses to recognize the damage that he is inflicting globally. His Government has gone back on defence and aid commitments, actions so symptomatic of its cynical domestic deceptions. With cut-backs to the ODA, the Minister has compromised our national word of honour. As a result, he has undermined our international moral authority, diminished our image as an honest broker, weakened our export markets and generally convinced our allies and friends abroad that we are no longer reliable.
The rest of the world is quickly learning what Canadians now take as a given: That the Tories cannot locate the word "integrity" in any dictionary.


An Hon. Member:: That is right.
May 10, 1989


Giuseppe (Joseph) Volpe: However, this Budget shows something worse. In fact, it shows that the Finance Minister is unable to properly appreciate either the economic realities of the day or the requisites of tomorrow's marketplace. He can no longer manage the financial and economic affairs of our nation. A brief look at his performance over the last year leading up to this Budget ought to shake the confidence of even his more assiduous sycophants in the business world.
He based his fiscal plan in 1988 on an interest rate of 7.8 per cent. When the Budget was tabled later in the year at the end of winter, the rate had gone to 8.5 per cent. It reached 10.5 per cent when the election was called. It now threatens to break through the 14 per cent barrier. The Minister made no adjustments to his Budget. I would ask my colleagues: How many of them or how many Canadians would not have fired their financial planners with that kind of performance?
That same Minister justified $16 billion in election commitments by saying that everything, and I quote: "is within the spending budget-set out in February of 1988. The costs would be zero-in those reserves we have sufficient money to handle the announcements". Six months later, after reneging on those commitments which, according to the Minister, represent money in reserve, the same Minister launches into a tax grab of $12 billion to $14 billion over the next two years to restrict the growth of the deficit. So much for honesty and integrity!
One may ask the Minister "why"? He says that interest rates must remain high in order to keep inflation down. The difference between interest rates, currently at 13 per cent and the inflation rate at 4.3 per cent, is already the highest it has ever been in Canada, despite the prosperity of recent years.
The Finance Minister still acknowledges that the introduction of his goods and services sales tax will actually increase the rate of inflation by 3 per cent. This is the same Minister who said that he would attack the debt and deficit through expenditure reductions rather than through tax increases. Now for every dollar of reduction he proposes, there are three in additional taxes. What unmitigated gall! We have seen this shifting of responsibility before. Even when the Budget was leaked, the Minister who is responsible for all aspects of
The Budget-Mr. Marcel Tremblay
departmental activities, immediately and without foundation covered up by claiming to be a victim of a criminal act.

One is left to conclude that his Government must think that Canadians are stupid in addition to being gullible. I can assure all Hon. Members that Canadians are neither. They can see clearly the lack of logic and absence of reason in this Government's budgetary decisions and directions. They wonder: "Who is writing the Government's agenda?"
This Tory Budget says loud and clear that the Government will not be involved actively in the economy in the short or in long term with any consistent, co-ordinated policies. It abandons any direct interest in promoting the expansion of an economy with deeds, as well as with words, so that the resulting expanded tax base would effectively reduce the Government debt.
What an insipidly short-sighted document! One that authorizes the pulling back of Government contributions to the economy and simultaneously taxes more money out of that economy while sheltering the rich against its pillaging forays.
These are the indicators of a government and a party without honour and without purpose. One that listens only and exclusively to the corporate rich. One that is afraid to look beyond any issue other than the public debt, a problem, I might add and remind, that has been created by this Government over the last four years. A government that can still predict a 3 per cent growth in the economy as it slashes spending, increases taxes and causes interest rates to rise.
The Finance Minister who bungled the Budget from the very beginning should heed the call of all Canadians and dump this Budget or risk damning the Government to unending vilification.
This Budget must go.


Mr. Deputy Speaker:: Resuming debate, the Hon. Member for Quebec East (Mr. Tremblay) has the floor.


Mr. Marcel R. TVemblay (Quebec East):: Mr. Speaker, I am pleased to rise today to participate in this debate on a Budget which deals with responsibility, the future, the

May 10, 1989
The Budget-Mr Marcel Tremblay
challenges which Canadian men and women will have to speak-out for themselves and vote, but who would take up in the forthcoming years.	eventually have to foot the bill?
On Monday, April 3rd last, Mr. Speaker, the Speech from the Throne presented us with a vision of the future and dealt with such issues as economic growth, inequalities reduction, environment protection, as well as the maintainance of adequate and generous social programs for all those who really need them.
What the Minister of Finances Budget is offering us today the means to achieve these objectives. This Budget is of outstanding significance, not only because of the circumstances which surrounded its publication, but rather because of its substance generally and the problem it addresses in particular.
To understand this Budget well, one must realize that Canada was faced with the serious threat of becoming completely powerless to continue its economic, social and cultural development, of loosing the high standards of living we all value so highly, as well as being deprived of our quality of life and social programs. In fact, it is the very character of Canada which is being threatened, everything that distinguishes us from other societies. All of that because the public finances in this country are ill and attacked by a condition which is in the process of destroying everything. The causes of this condition are well-known: the national debt and its servicing.
Let us now have a look at the patient, Mr. Speaker! The national debt which reaches now $320 billion is made up of all the deficits which Canadian Governments have accumulated since day one. This year, we will have to pay as much as $39 billion just to service the debt. That is something to think about, Mr. Speaker! As an illustration we could say that 35 cents out of every tax dollar sent to Ottawa by my good Quebec East constituents is earmarked to pay for these interests.
Our national sickness has reached such a level of growth that it feeds on itself. Each year, the Government is compelled to always borrow more money, not to pay back its debt, but only to pay the interests on that debt. Our national debt results in a real misappropriation of funds which could forever jeopardize our economic growth and which, day after day, weakens our country and seriously mortgages its future.
Mr. Speaker, do we have the right to borrow-some might say steal-so much money on the backs of our children and grand-children who could not be here to
For the people living in my fine Quebec East riding as for most Canadian men and women, the answer is clear: We must put an end to the treadmill of the national debt. While we still can, we must stop this tremendous waste of our resources. We are very likely to succeed because our Government has been aware of the seriousness of the debt problem since it came to power. It did address it right at the beginning. For four and a half years, we have taken stringent steps to control the problem.
For instance, we have done away with a number of programs which had become obsolete. We have cut down on waste and made public management more effective by cutting over 10 000 positions from the Civil Service. Program expenditures on the whole have decreased in relation to national revenues.
We have eliminated unproductive tax shelters for corporations and high-income individuals. We have also reduced the annual deficit. In four years, we have lowered it by $9.5 billion. In addition, we have succeeded in slowing down the growth of the public debt from 24 per cent in 1984 to less than 10 per cent last year. Our Budget program was conceived and implemented under a long-term comprehensive plan to revive the economy in a rapidly changing and increasingly competitive world. For the past four and a half years, we have built a solid foundation on which Canadians can develop their economic potential. Our aim was accurate. The results speak for themselves. Since 1984, Canadians have created 1.5 million new jobs and our economy has grown more rapidly than that of most industrialized nations. We have made that progress together, as a Government and as a nation, because we had the courage to make difficult choices and to take vigorous action in the fight against our fiscal and economic problems.
But we haven't won the war yet. The public debt disease has found a new ally: mounting inflation in Canada and other countries. It feeds the national debt and threatens our gains. In response to inflationary pressures, short-time interest rates are up. This year, they will largely exceed most experts' predictions. At the beginning of 1988, most economic analysts forecasted that the October 1987 market crash would slow down economic growth. Nobody in Canada or any other industrialized nation predicted the rapid growth and the inflation we are now experiencing. In Canada and
May 10, 1989

elsewhere, monetary policy was activated to fight inflation.
These rising interest rates will increase the cost of the public debt by $6 billion this year. Something else to consider, Mr. Speaker. I am well aware that Canadians are frustrated with high interest rates. Some even suggest that we reduce them by decree. But let us not forget that interest rates are not cut off from everything else; they are not isolated from other economic forces. They cannot be reduced without considering the whole economic picture. Upward inflationary pressures lead to high interest rates. Acting on the symptoms, on the rates alone rather than the underlying causes, solves nothing. On the contrary, it could even be very harmful.
Let us not forget the surge in inflation and interest rates we had in the early 1980s. Let us not forget the resulting loss of confidence in the economy, the arrested economic growth and job losses in every region of Canada, and especially, the disastrous consequences for the lives of millions of Canadians.
The Government at that time did not take the inflation threat seriously, which resulted in interest rates of 22 per cent in 1982. You remember that, Mr. Speaker. We shall not make the same mistake. We must all admit that a slowdown is necessary to restore economic growth to a normal rate for long-term development. We must apply firm, moderate, coherent budgetary and monetary measures that keep us on the right track to lower inflation and interest rates in a lasting way.
In the budget we just presented, we made difficult choices. We tried hard to make all the measures balanced, to take account of regional situations and to place the heaviest burden on those most able to carry it. We are not reducing the debt at the expense of the least fortunate. The budgetary measures include a vast range of reductions in public expenditure and of measures to increase revenue. The measures affecting revenue are intended to place the heaviest burden on taxpayers who can afford it. Altogether, these measures will bring in over $5 billion this year and $9 billion next year.
This year, they will almost cover the increase in interest charges and leave the deficit at $30.5 billion, a level that in my view is low enough to satisfy the money
The Budget-Mr. Marcel Tremblay
markets and lead to the reduction in interest rates all Canadians are looking forward to.
This year, they will almost cover the increase in interest charges and leave the deficit as I said at $30.5 billion, which next year will lower the deficit down to some $28 billion.
The debt-to-GP ratio will stabilize next year. The debt will stop increasing faster than the economy. This is a capital achievement. Finally the illness will be under control. And within five years, the deficit will have been reduced by half down to $1.5 billion. Borrowing needs will plummet to $3 billion, after reaching $20.5 in 1989-90.
In the long term, we will continue building the foundations for economic growth by implementing a balanced program of financial and economic moves. We will take important economic initiatives in areas such as manpower, international trade, financial regulation and the promotion of a productive and economically viable farm sector. We will ensure that economic growth does not harm the environment.
If I may, Mr. Speaker, I would like to emphasize this. The replacemeent of the existing federal sales tax is a key component in this Government's strategy to preserve essential programs while strengthening the Canadian economy. This new tax will improve the overall fairness of the tax system. It will make the federal tax more visible to the consumer, and result in significant economic production gains of about $9 billion a year, which will be felt throughout the Canadian economy and in all parts of the country.
The Government is committed to ensuring that families earning less than $30 000 a year will be better off after the sales tax reform. Let's keep in mind also that basic groceries, prescription drugs and medical equipment will not be taxed. Residential rents, day care services, legal aid, most health and dental care services and education services will also be exempted.
A few days ago, Mr. Speaker, many Canadians got another summary of the Budget through a special bulletin on the global TV network. I will not share my thoughts on that special bulletin, but rather leave you with my personal version of what a special bulletin could have suggested.
"We have just heard from exclusive sources that the Conservative Government has decided to protect and strengthen the Canadian identity and basic values, which make Canada unique among other nations, thanks in

May 10, 1989
The Budget-Mr. Marcel Tremblay
particular to its social programs. The Government has decided to develop a strong Canada that is entireley competitive with other countries. It proposes to declare war on the national debt, that cancer which eats its way through public finances, by implementing a firm, measured and cohesive budget.
According to our sources, it would seem that by introducing such a Budget the Minister of Finance (Mr. Wilson) assured himself of a political future for years to come."
End of special bulletin.
I can tell you, Mr. Speaker, that every single piece of information in my special bulletin is verifiable.


Alex Kindy: Mr. Speaker, I listened with interest to the Hon. Member's speech, which was mostly about the deficit and the debt. He said that the debt would be reduced in a matter of years. If we look at the statistics, we see that in 1984, the debt was about $180 billion, while today it is $350 billion and is increasing daily.
The Budget this Government brought down has a deficit, which means we are about $30 billion short for this year. Our revenues this year are $112 billion, while our expenditures will be $142 billion. That gives us a deficit for 1989-90 of about $30.5 billion.
I think these figures show we are not really dealing with the problem of the deficit or with a national debt that next year will total $380 billion, while the interest on the debt is expected to be 38 cents of every tax dollar the Government receives.
I don't think we are dealing with the debt and I don't think we have made enough cuts. This year, the Budget was increased by 7 per cent, a very substantial increase, and we do not have the revenues to make up for this $30 billion deficit.
In 1991, the Government will introduce a sales tax that will affect all taxpayers on low incomes. The tax will increase inflation by about 3 per cent.
I would like the Hon. Member to answer the following question. What does he think of a sales tax that in its first year will raise inflation by about 3 per cent?


Marcel R. Tremblay: Mr. Speaker, first of all, perhaps I may recall what I said in my speech which is that in my view, the $30 billion deficit is low enough to satisfy the financial markets and will help bring down interest rates as quickly as possible, something Canadians are looking forward to, especially my constituents in Quebec-Est.
Mr. Speaker, this year we have had some hard knocks financially as a result of interest rate levels that were much higher than expected. If the Hon. Member would look at the timeframe in which the Budget is expected to have an impact, he will see that by 1993-94, financial requirements will have fallen to $3 billion, compared with $20.5 billion in the Estimates tabled recently by the President of Treasury Board.
For the benefit of those listening, perhaps I may recall that financial requirements represent the money the Government will borrow on capital markets, and that this indicator compares pretty well with the definition of the deficit used in the United States and the United Kingdom.
According to this indicator, Mr. Speaker, Canada will have almost balanced its Budget by 1993-94, and I think that is a fundamental point people should remember. Although the present exercise leaves us with a deficit of $30.5 billion, we must realize that this is the kind of action we must take now if we want to succeed in controlling and balancing our Budget within a reasonable timeframe.


Mr. Rocheleau:: Mr. Speaker, I would tend to agree with my colleague from Calgary-North-East (Mr. Kindy) when he talks about the debt increasing from $177 billion in 1984 to $320 billion today. And, according to the Budget, this year's deficit will be $1.5 billion higher than last year's. This goes to show that before November 21 1988, the Conservative government kept hidden from the Canadian people the real problems which this country is facing.
I ask myself and I ask the Hon. Member from Quebec-Est whether the people in his riding were not fooled by the promises of the Conservative government considering the fact that unemployment insurance is now left entirely to employers and employees. In the case of universal social programs such as old age pension, it is again the people who have worked all their life, regardless of the money they have, which will have to pay. In Baie-Comeau, the Prime Minister of Canada, with his mother at his side, said that social programs would not be
May 10, 1989

cut, yet with this Budget devoid of any real improvement, the debt has doubled, the deficit has increased, programs have been cut, taxes are up. Furthermore, interest rates continue to increase substantially. Despite all this, the government would have us believe, Mr. Speaker, that it has done its job over the last four years. I think not and I would like the Hon. Member from Quebec-Est to comment on that.


Marcel R. Tremblay: Mr. Speaker, I repeat what I said earlier, that our approach since 1984 has brought concrete results. The measures we have taken to reduce the deficit and slow down the debt growth have helped fostering investment and employment in Canada, raising the standard of living and increasing economic security.
I am well aware that there is more to do. We must do more to be able to continue our social and cultural programs, to build and support a strong and competitive economy that will keep on creating jobs and opportunities for Canadian men and women, to give us the means to meet priorities such as job training and the protection of the environment and, of course, to improve the quality of life for Canadian men and women in general.
So, in meeting the debt challenge, this Budget is building our future instead of mortgaging it. You can be assured that I, who has young children, have no intention to pass the buck to them, to make them pay the bill for something in which they had no say and did not deserve.


Mr. Andre Harvey (Chicoutimi):: Mr. Speaker, it is absolutely inconceivable to hear our colleague of the Official Opposition say that the Government has added to the deficit. We know full well that the deficit stood at $39.5 million in 1984 and had the Liberals remained in office the deficit would now be up to $50 billion or $55 billion and the public debt would have gone over the $500 billion mark.
In an attempt to set the record straight, allow me first to commend my colleague for the quality of his remarks on the Budget Speech. I would suggest that the ponderation and scope of our colleague's speech enables us to gain a better insight during the difficult times we are experiencing now and will soon be facing, Mr. Speaker.
I should like to ask my colleague whether it is a fact that, according to the claims of both Opposition Parties, regional development programs are to be reduced as will other social programs. Is it a fact that old age pensions
The Budget-Mr. Comuzzi
will not continue to increase? Is it a fact that regional expansion programs will be axed, or is the truth something else again?


Marcel R. Tremblay: Mr. Speaker, I will be veiy brief. I think the truth is completely different.
On the contrary, we notice an increase in all areas of the budget. Where there is a slowdown, it applies to the rate of increase. When you read and read again the many documents made available to us, you see that priorities remained the same and that measures taken by our Government since September 1984 are maintained and will be completed on time, except that we have a temporary period of restlessness. We do not control interest rates as we would like to, but be assured that the actions we are taking now will enable us to position ourselves very firmly and much more aggressively as early as 1993-94, when our budget program is completely balanced.


Mr. Joe Comuzzi (Thunder Bay-Nipigon):: Mr. Speaker, allow me first to preface my remarks with some general observations about this Budget. The Government has burdened Canadians with $3.3 billion in additional taxes which will be raised on the backs of Canadians right across this land.
On March 6 the Minister of Finance (Mr. Wilson) promised this House that they would cut spending and that they would not raise taxes as tax levels in Canada were already too high. He went on to promise Canadians that the deficit would be reduced by cutting spending, not by raising taxes.
On November 29, the Prime Minister (Mr. Mulroney) told us that Canadians paid a pretty penny for their government services. They feel that they pay quite enough already, yet since 1984 taxes paid by individual Canadians increased by $26.7 billion while taxes paid by corporations increased by only $3.4 billion. In our estimation this is very unfair.
When the Government took office in 1984 the public debt was $176.8 billion. Between 1984 and the end of this fiscal year that debt will rise to $352 billion. The Government has doubled the debt of this country in the five short years that it has been in office. What does this mean? It means that in the past 117 years of Canadian history since Confederation, up to 1984, the national

May 10, 1989
The Budget-Mr. Comuzti
debt of our country increased by $1.5 billion a year. Since 1984, for the last five years of Conservative rule, the national debt of our country has increased by $34 billion a year.
In light of the largest personal tax increase in Canadian history our deficit will increase this year from $28.9 billion to $30.5 billion for the next fiscal period. All Canadians were told by the Minister of Finance that the deficit in our country could not be allowed to increase and that it was the number one problem in Canada. When we were discussing the deficit I was prepared like all Canadians to tighten our belts. We expected some harsh measures in the interest of reducing the deficit for the benefit of all Canadians.
How disappointing it was when the Budget was finally tabled in the House to see that the deficit had not decreased but in fact had increased. What did the Government do? It did an about-face and increased the deficit again, exactly opposite to what it told Canadians throughout the country that it was not going to do. This Government has failed miserably in its attempt to realize the goals outlined by its own Minister of Finance when he stated: "Our challenge is to restore fiscal stability and rebuild credibility in the management of government finances. The only way to do this is to set out a medium term fiscal plan with sustained deficit reduction and then hold firm to that plan." This is not what the current Government has done. It has done just the opposite.
Let me be specific in the main thrust of my intervention. A close review of the Budget suggests that the Government has little regard for northern Ontario. This Budget is cruel to rural and small town Canada. This Budget is particularly cruel to northern Ontario. Since 1984 the Government has ignored all of the people in northern Ontario. Since 1984 it has failed to let Canadians from northern Ontario share in the national dream. Since 1984 it has failed to let the people of northern Ontario share in the national pie.
The people of northern Ontario responded to being ignored in 1988. It is obvious from the actions of the Government that we are now paying our dues. No matter what the Government does or says, its actions count. It ignores those who exercise their democratic rights. It ignores those in northern Ontario like it ignores the good people in Prince Edward Island-look what the Government has done in Summerside. It ignores us in northern Ontario like it ignored the people in Ottawa- look what it did with the space program. It ignores us in
northern Ontario like it ignores the people in Newfoundland-look what it did to the vital fishing industry and the unemployment insurance. It ignores the people in Portage la Prairie-look what it did with the service base there. They ignore us in northern Ontario-take a look at what the Government has done to our softwood industry and the movement of our grain away from the traditional ports to the West Coast.
Do we need any more proof that the Government is not concerned about small-town and rural Canada? Do we need any more proof that the Government is not concerned about northern Ontario?
Gasoline prices in northern Ontario are 4 cents or 5 cents a litre higher than in southern Ontario or Manitoba. Fifty kilometres out of Thunder Bay gasoline costs 10 cents to 12 cents more a litre. What does that mean to the average person who lives in northern Ontario? It means if that person goes from the centre of my riding in Thunder Bay to the furthest point which is 290 kilometres away, it will cost $5 more for a tank of gasoline. It costs $5 more for a tank of gasoline eveiy time one pulls up to the gas pumps. You can cut it any way you want, Mr. Speaker, but this is $5 extra in income tax that is being paid for the deficiencies in the way the Government handles its fiscal responsibility.
The impact goes beyond economic considerations. Northern people must travel great distances to reach a neighbouring town. Increasing gasoline prices limits the mobility of people in northern Ontario. Northern people must travel to communicate with their neighbours. We must travel to socialize with our relatives. We must travel to receive a degree of health care. We must travel to obtain educational equality. Sometimes, yes, we must travel to survive. This is a cruel Budget to the people of northern Ontario because of those increased costs of taxation.
On April 12 I tabled in the House a petition from a group of concerned citizens from northern Ontario who are opposing the Government's 10 per cent telecommunications tax on long-distance telephone calls. Residents in the North are often compelled to make more long distance calls than our friends in the South due to the population and the distances between our communities.
How do you think those citizens will respond to this Budget, Mr. Speaker? In its disregard for matters pertaining to northern Ontario, the Government has again increased the tax on telecommunications services from
May 10, 1989

10 per cent to 11 per cent. That is another issue and another area in which the Budget is cruel to the people of northern Ontario.
We on this side of the House recognize the importance of rural post offices to the communities they serve. They provide valuable services which go well beyond the delivery of mail. Yet rural post offices which were previously threatened by closure are again threatened by closure under the Budget. Most small communities in northern Ontario such as Nipigon, Red Rock, Dorion, Pass Lake, Gull Bay, Armstrong, and Hurkett rely on their rural post office. In small-town and rural Canada, as it is in small-town and rural northern Ontario, perhaps the only presence of the Government in those small communities is either the post office or a VIA Rail station, and the Government cannot take those away from rural Canadians.
Does the Government realize that in remote areas the costs are much greater? The Budget will reduce the disposable income of all Canadians, but it will particularly hurt those who live in the North. The impact will be felt most in isolated, rural, and small-town regions. Those people will now have to shoulder increases in personal income surtax from 3 per cent to 5 per cent, and sales tax increases from 12 per cent to 13.5 per cent.
If that was not enough of a burden, young families in our communities, those who wish to buy homes for the first time, not only face higher interest rates, mortgage rates, and insurance rates, but with the imposition of another tax, construction materials will be raised from 8 per cent to 9 per cent which will further delay their ability to purchase homes.
Transportation plays an integral role in the unity and the prosperity of northern Ontario. Yet the cruel Budget threatens those essential services. The Budget calls for substantial cuts to VIA Rail's continuing operating and capital subsidies for the coming year. It is a paradox that when the Budget was handed down, the National Transportation Agency was holding hearings throughout Canada, costing millions of dollars, to find out the future viability of VIA Rail. While that is being done the Budget is presented which tells all Canadians where VIA Rail is going and what its future will be.
The Budget-Mr. Comuzzi
Those subsidy cuts will lead to a reduction in the quality of service, the abandonment of certain routes, numerous lay-offs, and certainly lower maintenance standards. This is being pursued by the Government because it fails to realize the importance of passenger service. It fails to realize that the passenger service is integral to the history and the development of our country. Instead of exploring options to modernize and improve the passenger rail system, the Government has condemned VIA Rail to a slow and painful death before our very eyes.
I represent a riding that was once represented by a very great Canadian by the name of Clarence Decatur Howe. Among Mr. Howe's many accomplishments as a Member of the House and serving Canada, especially during the Second World War, was being a founding person in Trans-Canada Airlines, now Air Canada. We are proud of Mr. Howe in the riding of Thunder Bay-Nipigon. It was a sad day when the Government announced in the Budget that it would now privatize the remaining 55 per cent of Air Canada.
I can say with complete assurance that it was Mr. Howe's dream that we would have a national airline in Canada that was owned by Canadians to equalize the delivery of air transport to all Canadians regardless of where they lived. In reading that particular segment of the Budget, it was a sad day for Air Canada, a sad day for Canadians, and a sad day for a great Canadian by the name of Clarence Howe.
The Budget shows all too well the Government's real and actual commitment toward social programs. The Budget tells us that the Government has chosen not to proceed with the promised $4-billion child care program. This is a cut in our social programs. Individuals who earn more than a set amount will no longer receive old age pensions and family allowances. This constitutes a further cut to the social programs that we were told would not be cut.
As of January 1, 1990, the Government will terminate its $2.9-billion contribution to the Unemployment Insurance Program. Instead, employers and employees will have to pay for this through increased premiums. This is a further cut in our social programs.
As a result of the Budget, transfer payments to the provinces will be further reduced by 1 per cent. In 1986 those payments were cut by 2 per cent. We all know the benefit of transfer payments to the provinces. In Ontario

May 10, 1989
The Budget-Mr. Comuzzi
the transfer payments pay for post-secondary education, and the very needed health care costs for care that we have come to expect. When funding is reduced in those two vital areas, the health care delivery system is reduced, as is the delivery of post-secondary education.
When we told Canadians that the Government would be forced to harmonize our social programs with those of the United States in the interest of big business, we were accused of lying to the people and using scare tactics. Now that we see the direction the Government is taking in the Budget, who is misleading the Canadian people now?


Some Hon, Members:: The Tories!


Joseph R. (Joe) Comuzzi: The Budget also points to areas other than social programs where the Government misled the Canadian electorate. The list of broken promises is long. The Government stated that it would not reduce its commitment to regional development. It was cut by $300 million. It pledged to increase official development assistance by .7 per cent of Gross National Product. That target was reduced to .43 per cent. Farmers were told that the Government would maintain adequate support. Instead, there have been cuts to the farm fuel rebate, crop insurance funding, dairy export subsidies, and Farm Credit Corporation interest-free loans have been eliminated. The Government said it would improve federal housing programs. What has it done? It has cut the Canada Mortgage and Housing Mortgage Residential Rehabilitation Program by $49 million. It said it would improve women's programs and multicultural programs. It has cut both by $2 million. The added funding for the CBC announced on January 23,1988, was reduced by $45 million. The point is quite clear. The Government has misled the Canadian people.
In summary, I suggest that all Canadians, from northern Ontario, southern Ontario, Victoria to Newfoundland, know that they cannot have their cake and eat it too. Canadians realize that we cannot increase expenditures, cut taxes, reduce the deficit and thereby service the debt.
The purpose of my intervention today is to bring to the attention of Canadians what the Government promised. It promised to sponsor a fully-funded program of day care to the mothers of this country. It promised that
social programs would not be touched. It made a definite commitment to our elders and senior citizens. It made a promise to the working people of Canada that it would not change anything in our unemployment insurance program. It promised not to cut our social or foreign aid.
I am trying to tell the Government that it cannot continue to tell Canadians one thing and do something else, as it has done since it formed the Government in 1988. It is time the Government did something for Canadians. It is time it told Canadians exactly what they can expect for the future of our young people who want to get married, have families, own homes and realize the Canadian dream. The Government must provide a level playing field for all Canadians so that we know where we are going. It can only do this by not misleading us anymore.


Mr. MacDougall:: Mr. Speaker, I know that the Hon. Member is new in the House and perhaps did not have an opportunity to review the record of the Government between 1984 and 1988 and what we have been able to do for northern Ontario.
Between 1984 and 1988 this Government introduced a northern tax allowance which many of his constituents are benefiting from. That was not in place prior to 1984. We also brought in a program called Community Futures where individual communities across northern Ontario have the opportunity to enhance their future.
We also brought in procurement which previously did not exist. Companies across northern Ontario had the opportunity to work with the Government in order to procure purchases from the federal Government.
I cannot understand why the Hon. Member would not have congratulated the Government for FEDNOR and the fact that funding for FEDNOR has remained the same. It is people from northern Ontario who are ensuring the opportunities for all of us, whether in small business or large business, or individual tourist operators in northern Ontario.
The Hon. Member talked about softwood lumber. As a good Liberal Member from northern Ontario, perhaps he would not mind talking to the provincial Minister of Natural Resources to encourage him to sit down with our Minister, like other Ministers from other provinces, to negotiate a way to settle this. The provincial Minister has received over $50 million which has not gone back into reforestation or into the industry. It goes into general revenue funds.
May 10,1989

I challenge the Member to compare our record from 1984 to 1988 with the record of any Liberal Government prior to that time. If the voters had the opportunity in 1988 to vote on the record of this Government rather than on the misleading untruths they heard about the Free Trade Agreement, I suggest there would be more Conservatives from northern Ontario than just myself.


Joseph R. (Joe) Comuzzi: Mr. Speaker, I thank my hon. friend opposite for his remarks. While he was speaking I wondered how he was the only Conservative to win one of the 12 seats from northern Ontario. I suggest it is indicative of the way the Government has treated the people of northern Ontario.
I accept his challenge. Shortly after the election he visited the riding of Thunder Bay-Atikokan. If the local newspaper recorded his comments accurately, I was amazed at how little he knew about the sawmill softwood lumber industry in northern Ontario. He did not even know that it was not a surcharge, referring to the $50 million in the Ontario coffers to which he alluded, but an export tax. It is an export tax to stop the countervail by the United States so those funds would stay in Canada.
If the Hon. Member wants to challenge me about anything to do with the softwood lumber industry, I suggest that we can meet later. I would certainly open my file on softwood lumber for him so he could be better informed as to that very difficult and serious area that affects some 3,000 to 4,000 people in northern Ontario.
The Hon. Member talks about programs like Community Futures and the northern tax allowance. I thought the Member would have some appreciation for what the people of northern Ontario are all about. People in northern Ontario do not want handouts. They do not want something for nothing. They want the ability to work, earn a living, pay whatever is necessary and enjoy themselves. That is the fibre of the people of northern Ontario. They do not want to rely on those services that must be provided at times when they cannot find employment. The people who make up the fibre of our community are strong-willed people. Community Futures, although appreciated, is not what the people of northern Ontario are all about.
With respect, I suggest to my friend that those are programs to help the unfortunate, the poor and those who need additional retraining, but what the people of
The Budget-Mr. Comuzzi
northern Ontario want is the grain moving through the port of Thunder Bay. We want our fair share of grain. We want the sawmills operating at full capacity. We do not want that export tax that the Government put on softwood going to the United States.
I might say to the Hon. Member, to show him the fibre of the people in northern Ontario, that this weekend two ships left the port of Thunder Bay for a market in London, England. They were taking over 800,000 board feet of lumber to a new market which the people of northern Ontario developed without the help of any Government. They were forced to do that because of the 15 per cent export tax that the Government blatantly implemented, destroying an industry in northern Ontario.


Mr. Atkinson:: Mr. Speaker, I am sure the Hon. Member was simply mistaken, but he indicated that there was a 1 per cent decrease in Established Programs Financing transfers to the provinces. I am sure he will agree that there will be an increase in those fundings this year, but the increase has been decreased. The increase will be down by 1 per cent, but there is a guarantee in the Budget Papers that that increase will not fall below the level of inflation. These EPF programs will be increased, not decreased, as seems to be the customary assertion.
I would also like his comments on the deficit, whether he considers it a problem, and whether he has any solutions to that particular matter. He has attacked every tax increase and expenditure decrease that has been made. I would like to hear his comments on exactly what he would do in regard to the deficit.


Joseph R. (Joe) Comuzzi: Mr. Speaker, I appreciate the comments of the Hon. Member. With respect to the 1 per cent, I did not intentionally mislead the House. It is 1 per cent less than what was projected to be turned over in transfer payments. Thus it is 1 per cent less than what was promised.
With respect to solutions, Members opposite had all the solutions up until November 21. There was no deficit problem. They told the people of Canada that all the spending commitments had been looked after and that the fiscal management of the country was in its best shape ever because of the Conservative Government.

May 10, 1989
The Budget-Mr Vincent
Now, they look across the House and say: "What is the solution?" The solution is this: perhaps they would like to turn the reins of government over to us. I am sure that with the 83 members on this side of the House we could come up with a better solution than what we have heard in the Budget tabled in the House. I promise you, Mr. Speaker, that we would bring the Budget in on time without any floods.


Mr. MacDonald (Dartmouth):: Mr. Speaker, I listened with a great deal of interest to my colleague from Thunder Bay-Nipigon. I heard him speak in the House. I have listened with care to his vision and the Liberal Party's vision of the country. I have learned a great deal from the Hon. Member about the true nature of the country. I like to talk about the country being a nation of regions, each distinct. I found out that the northern part of Ontario is a distinct and important region of Canada. As such, many times in other parts of Canada we look at Ontario and see it as the fat cat of Confederation.
However, when we see what transpires in this House and when we listen to the important debates that take place here, it becomes increasingly obvious that regionally does not just hit the West and East. It also hits the northern part of Ontario. One thing we saw in the Budget and about which I would like to ask the Hon. Member is a picture of the Government which only a few short months ago said that regional development programs were safe. Members of the Government said that they were a sacred trust with universality, old age pensions and family allowances, for goodness sakes. We found out just how sacred they were. We know now that over the next five years there will be up to $1.2 billion cut from the projections for regional development programs. We have heard the Minister responsible for the Atlantic Canada Opportunities Agency say in the House that in the short term, a three-year period-a lifetime in the regions-there will be some difficulty in funding regional development agreements.
What I would like to ask my colleague is exactly how the $1.2 billion in cuts to regional development programs will affect the vision of the North as a full participating partner in the economy of the nation.


Joseph R. (Joe) Comuzzi: Mr. Speaker, I thank my colleague for his question. It gives me a chance to discuss in some detail regional development in northern Ontario.
Like the area which my hon. friend represents, as with many other areas in the country, in northern Ontario we depend on regional equity in order to enhance our communities. The Atlantic provinces, northern Ontario, most parts of Manitoba and other areas rely on regional assistance.
In answer to the question, let me say that we do not have any regional assistance. In 1988 a funding program by the name of FEDNOR was started. It was funded up to $55 million, which is a pittance when one talks about regional development and the wealth of northern Ontario. It is a pittance when we consider our mines and what they have produced for the national economy. It is a pittance when we consider what our forestry industry was worth before the export tax. It is a pittance when we talk about what the pulp and paper industry in northern Ontario produces for our national economy.
We do not get one iota of assistance from the Government other than that $55 million in FEDNOR which has already been committed for $12 million. I might say that it is spread over five years. Thus it amounts to a $12 million subsidy to enhance industry in northern Ontario.
As I said earlier, Mr. Speaker, you can see that the Conservative Government has ignored the people of northern Ontario.
[Translation\


Mr. Deputy Speaker:: Resuming debate with the Parliamentary Secretary to the Minister of Finance (Mr. Vincent).


Mr. Pierre H. Vincent (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, as Parliamentary Secretary to the Minister of Finance, I am happy to speak to the Minister's excellent Budget. Since we have been debating that Budget for a few days, it is perhaps time to set the record straight and, at the same time, go over what the Progressive Conservative Government has accomplished since 1984.
I'm sure you will remember that Minister Wilson tabled Budgets in November 1984, May 1985, February 1986, February 1987 and February 1988. You will recall, Mr. Speaker, that in those five Budget debates the Liberal Opposition said roughly two or three things. Firstly, we would lose jobs in Canada with those Budgets; secondly, inflation would skyrocket; thirdly, we would get
May 10, 1989

all the problems in the world on top of lost jobs, growing inflation, higher interest rates and so on.
And, if you read Hansard for the 15 days following those five Budget Speeches, you will realize that is all the Opposition said.
If we look at what really happened since 1984, Mr. Speaker, we created 1.4 million jobs in Canada, 80 per cent of which are permanent, unlike the Liberal Government who used to create temporary jobs in the same proportion.
Inflation stood at about 4 per cent over the last four years. Canada had the best productivity ratio. During the years 1984 to 1988, Canada was among the countries having the best economic performance.
In fact, Mr. Speaker, it worked so well that, by the end of 1988, we were in an inflationary period. The Minister of Finance and the Conservative Government had two alternatives: to let inflation escalate like it did in 1980-1981 under the previous Liberal government when it shot up to 12 or 13 per cent; or to wake up and raise interest rates to 22 per cent, like the Liberals did. The Liberal Government had to go along with interest rates of 22 per cent to check the inflation it had let run rampant. Mr. Speaker, this Government has faced up to its responsibilities and said no, we cannot let the inflation rate go up too fast. There are two ways to make sure that inflation will not go wild: sure enough, interest rates must inch upward, and there must be a Budget to put a clamp on our national debt and the current annual deficit. Both steps have been taken. It is an excellent Budget. Indeed there are cut backs. Indeed there are tax increases. And indeed we have a major problem. Our national debt goes up to the tune of over $3 million every hour, and this works out to $80 million every day. Now, Mr. Speaker, just what is this national debt? It is the debt we inherited from the Liberal Party when it was turfed out in 1984, that is what it is!
Members opposite do not like that. We can hear them moan. They do not like that, but it is the debt they left behind in 1984, Mr. Speaker, plus what it is costing us to service it. If you examine the deficits of the Progressive Conservative Government since 1984 you will see that they can be accounted for by adding up the cost of servicing the debt of the Liberal Party. That, Mr. Speaker, is our current national debt. We must be aware of that, and ours is the only Government courageous
The Budget-Mr. Vincent
enough to take whatever action is needed to get a handle on the debt and cut down the deficit. We have managed to reduce the deficit four years in a row.


Mr. Gauthier:: Not true! You are again dreaming in colour!


Pierre H. Vincent: Four years in a row we have reduced the deficit. And I challenge my colleague to stand up and tell me that is not true, instead of twittering. Let him stand up and say it! Let him put up figures!
Mr. Speaker, this year's deficit should have been lower but, as I said earlier, because of higher interest rates, we have had to pay $6 billion more just in interests. And that explains why the deficit is higher this year than was anticipated. However, with the kind of initiatives that were taken in the Budget, as much in terms of tax increases as of different spending cuts, we will be able in a couple of years to cut our deficit by half to $15 billion. And with the control of our national debt, Mr. Speaker, it is important to look towards the future, as we have done, and to know where we are going. Mr. Speaker, I heard comments from business which supports us, according to the Opposition, and it said: Cut spending. Since 1984, Mr. Speaker, we have made annual spending cuts and now in 1989-90, the Government will spend less money on running this country than it did in 1984. We will be spending less, in cash terms.


Jean-Robert Gauthier: Look at the books!


Pierre H. Vincent: The Hon. Member for Ottawa-Vanier (Mr. Gauthier) is upset, Mr. Speaker!


Jean-Robert Gauthier: Not at all!


Pierre H. Vincent: Yes he is, his glasses are shaking. Mr. Speaker. The truth is always hard to take.
This year we are going to spend less money on administration than we spent in 1984-85, in cash terms. Five years later, we are spending less. This proves that we cut the fat, and we also cut some of the lean. There isn't much left. We are spending 16 cents on the dollar to administer this country.


Bernard Valcourt: And the Liberals?


Pierre H. Vincent: They spent 20 to 22 cents.


An Hon. Member:: Terrible!


Pierre H. Vincent: On the other hand, Mr. Speaker, we are spending 35 cents on the dollar to pay off their debt, and that is a fact. It is a fact that we are spending 35 cents on every dollar to pay interest charges on the debt that the

May 10, 1989
The Budget-Mr. Vincent
good old Liberal government left us. We have to live with it.


Some Hon. Members:: Oh, oh!


Pierre H. Vincent: Mr. Speaker, the truth really shakes them. They are waking up, Mr. Speaker, and it is high time they did. The House is going to adjourn in five minutes. But I will be back tomorrow morning. I will be here when you come back, and that should put you in fantastic shape for the rest of the day!
Mr. Speaker, every year I have had a chance to take part in the debate on the Budget, and every year I tried to explain to the Opposition what we were doing, and every year I asked the Opposition- No, they just won't understand, and I never could make them understand, Mr. Speaker. But every year, I asked them and I am doing it again this year: Do you have any measures that could help this country, not the Conservative Party but Canada, to reduce the deficit, because, Mr. Speaker, I will tell you what I have been hearing in the House for the past five days. For the past five days, they have been demanding more money for VIA Rail, more money for day care, more money for unemployment insurance-


Jean-Robert Gauthier: Broken promises!


Pierre H. Vincent: They want more money for regional development, for training and for the environment-


Jean-Robert Gauthier: Broken promises!


Pierre H. Vincent: They want more money for the sales tax, for old age security pensions and for family allowance cheques-


Jean-Robert Gauthier: Broken promises!


Pierre H. Vincent: They want more money for the provinces, for women and. for the disabled-


Jean-Robert Gauthier: Broken promises!


Pierre H. Vincent: They want more money for the CBC, and I could go on and on and on, Mr. Speaker.
Every single day the Opposition ask for more money for everything, while blaming us for not cutting the deficit down enough, not reducing the national debt enough. To use the usual phrase, they speak from both sides of their mouths. Let me remark that some of their colleagues are very well equipped to do that. They speak from both sides of their mouth.
But this Government has a straightforward message. Already in 1984, Mr. Speaker, we stated we had a national debt problem. We stated we had a deficit problem, and new Members here in particular can read the Debates, there is a lot to learn in it. They will see we have been suggesting this for four years.
Mr. Speaker, let me ask this question once more: Does anyone in the Liberal Party of Canada or in the New Democratic Party have brillant solutions to offer? The Liberal critic shares our views. Inded, the Liberal Party critic thinks as we do. They shut him up for a while. Of course he must shut up. He does not ask questions during Oral Question Period anymore, he does not rise, they shut him up. Mr. Speaker, let me ask the question: If they have such brillant solutions that will help the country, we are buyers any time. I know beforehand what the NDP will say. The NDP will say: Tax large corporations, tax the individuals who are well off. This we did, Mr. Speaker. This is finished and done with! We cut tax havens for individuals. We imposed a minimum corporate tax and cut corporate tax havens.
Just remember the scientific research tax credit which was imported by the clever Liberal Party of Canada and its Finance Minister of the time which cost billions of dollars to Canadian taxpayers. It was a sham, a real sham which cost billions of dollars to Canadian taxpayers. Such was the result of the Liberal Party of Canada's management. We have eliminated the tax loopholes. We have levied a tax on corporations with assets of over $10 million. We have done all that for the sole purpose of giving back Canada its proper place among nations, and to stop people from saying that Canada is the country with the greatest debt in the world, which is a fact now. But to achieve this, all Canadian men and women must do their share to reduce both the deficit and the national debt.
In this Budget, something the Opposition has chosen to overlook by jumping a line, we have reduced by 1 per cent the increase in transfer payments to the provinces. I repeat that we did not reduce the payments made to the provinces, but only by 1 per cent their rate of increase. We have reduced the increase. That should be emphasized, because the provinces, just as ordinary individuals, must work together with the Federal Government to finally control our national debt.
May 10, 1989

We have also indicated our intention to levy as of January 1, 1981, a new 9 per cent Federal Sales Tax. As you know, Mr. Speaker, this is a 65th anniversary. The Federal Sales Tax, as we know it, would be eligible for Old Age Security pension, because it is now 65 years old. It came into being in 1924. In view of its age, the Minister of Finance and the Cabinet have felt that the time had come for it to get its pension, and they are absolutely right.
The federal sales tax we now have is harmful to Canadian companies, as it favours imports.
Mr. Speaker, I can see you are telling me that my time is up. I understand, Mr. Speaker, that you will give me
The Budget-Mr. Vincent
the opportunity to complete my speech at the next sitting.
Mr. Speaker, I hope the Hon. Member for Ottawa- Vanier (Mr. Gauthier) will be here tomorrow morning, so that he can finally understand how good a budget this is.


Mr. Deputy Speaker:: I am sure the Hon. Member for Ottawa-Vanier (Mr. Gauthier) will be here. He is always here.

Mr. Deputy Speaker It being six o'clock, the House stands adjourned until 11 a.m. tomorrow, pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 6 p.m.
[Stage Direction]
Thursday, May 11,1989