1989-09-28

Mr. Pat Nowlan (Annapolis Valley-Hants):: Mr. Speaker, pursuant to Standing Order 34(1), I have the honour to table in the House, in both official languages, the report of the Official Parliamentary Delegation of the Canadian Section of the Canada-U.S. Interparliamentary Group which attended the thirtieth annual meeting of the Canada-U.S. Interparliamentary Group at Ottawa and Montebello between June 1 and June 5, 1989.
[Editor's Note: See today's Votes and Proceedings.]


Mr. Charest:: I am sorry I could not hear, Mr. Speaker, because I have, under the item of tabling of documents, some Order in Council appointments to table.


Mr. Speaker:: Does the House agree to revert to tabling of documents?


Some Hon. Members:: Agreed.


ORDER IN COUNCIL
Jean J. Charest: Mr. Speaker, I am pleased to table, in both official languages, a number of Order in Council appointments which were made by the government, pursuant to the provisions of Standing Order 110(1).


FEDERAL COURT ACT
Hon. Doug Lewis (Minister of Justice and Attorney General of Canada) moved: for leave to introduce Bill C-38, an act to amend the Federal Court Act, the Crown Liability Act, the Supreme Court Act and other acts in consequence thereof.


Mr. Speaker:: Shall the hon. minister have leave to introduce the bill?


Some Hon. Members:: Agreed.


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

Mr. Vic Althouse (Mackenzie):: moved for leave to introduce Bill C-262, an act respecting interprovincial livestock trade.


Mr. Speaker:: Shall the hon. member have leave to introduce the bill?


Some Hon. Members:: Agreed.


Victor Fredrich (Vic) Althouse: Mr. Speaker, I would simply like, in having this bill printed, to point out that this piece of legislation seeks to settle the problem of security for producers who sell livestock outside of their own province. A large number of the provinces have internal security arrangements for cattle traded inteiprovincially, but extraprovincial trade is a federal matter.
This bill would attempt to set up a trust fund to which abattoirs and slaughterhouses purchasing livestock and poultry from farmers outside a province would contribute. In the event of their bankruptcy the producers would not be left wanting their money.


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

Mr. Jim Fulton (Skeena) moved: for leave to introduce Bill C-263, an act respecting the international boundaries between Canada and the State of Alaska.


Mr. Speaker:: Shall the hon. member have leave to introduce the bill?


Some Hon. Members:: Agreed.


James Ross Fulton: Mr. Speaker, this bill is being reintroduced to permanently and legislatively entrench 54-40 as Canada's international land and marine boundary with the United States at the southern tip of the Alaska panhandle, more commonly known as the A-B line.
It is particularly important now because of the hijacking of the MV Fonzie and Viscount this summer and the kidnapping of the crews by the U.S. Coast Guard.
The debate will fully inform Canadians of the history of the boundary and the need for the Government of Canada to entrench the boundary in law, to fight for the protection of the boundary and to fight to protect the rights of Canadian fishermen such as Skippers Dever-eaux and Willson from the above-named vessels.


Mr. Speaker:: The Speaker of course has no public comments whatsoever on this bill.


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

James Ross Fulton: for leave to introduce Bill C-264, an act to amend the Nuclear Liability Act (limitation period).


Mr. Speaker:: Shall the hon. member have leave to introduce the bill?


Some Hon. Members:: Agreed.


James Ross Fulton: Mr. Speaker, this bill to amend the Nuclear Liability Act is vitally required in Canada for the future protection of Canadian nuclear industry workers and for Canadians generally.
The purpose is to delete the 10-year limitation period for litigation and to provide a fair limitation period for victims of radiation exposure and injury.
Modem medicine now recognizes latency periods of up to 30 years for radiation induced exposure. Surely laws passed by this Parliament must recognize medical realities and the rights of Canadians.


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

Mrs. Louise Feltham (Wild Rose):: Mr. Speaker, pursuant to Standing Order 36,1 have the honour to present several petitions containing the signatures of over 1,500 of my constituents who want to retain the uniformity of the RCMP uniform.
While they are in favour of those changes which will contribute to the safety and comfort of the RCMP, they feel it is imperative that the distinct heritage and the tradition of the RCMP as exemplified by this uniform be maintained. They wish to see continued the proud tradition of their forefathers while ensuring that this legacy will be preserved for generations to come.


Mr. David Kilgour (Edmonton Southeast):: Mr. Speaker, pursuant to Standing Order 36,1 have approximately
6,000	names on petitions. They have been approved as to form by the clerk of petitions.
They relate to the question of our extradition laws. They refer specifically to some individuals who have created concern among Canadians generally. It is my honour and pleasure to present all of these petitions to the House today.


Mr. Iain Angus (Thunder Bay-Atikokan):: Mr. Speaker, I have the honour and privilege of tabling a petition
September 28, 1989

signed by 34 residents of Canada and users of VIA Rail who call upon Parliament to maintain, improve and modernize VIA Rail service in those areas of the country where it can provide a more rapid, economical, safe, convenient, environmentally sound and energy efficient alternative to other means of transportation.


James Ross Fulton: Mr. Speaker, I am pleased to table in the House a petition certified pursuant to Standing Order 36 as being in conformity with the rules of this House.
Residents from a number of communities across Canada are concerned about the proposed slashes to VIA Rail. As you would know, Mr. Speaker, there are many communities in northern British Columbia that have no other means of travel in and out of their communities. It is very important that VIA Rail not only in those areas but other areas of Canada be maintained.
[Translation\


Mrs. Shirley Maheu (Saint-Laurent-Cartierville):: Mr. Speaker, this morning it is my privilege; speaking on behalf of the people in my riding and in towns as far away as Saint-Bruno, Verdun and Dollard-des-Ormeaux, to present a petition which conforms to Standing Order 36, in which petitioners call upon the federal Government to reject the proposed goods and services tax.

I also have the privilege of presenting another petition on behalf of the Seniors Club in my riding whose members are begging us because of the impact on our senior population to reject the proposed goods and services tax.


Mr. Peter Milliken (Kingston and the Islands):: Mr. Speaker, I have the pleasure to present a petition signed by people from across Canada, 126 signatures, who oppose the proposed cuts the government has suggested to VIA Rail in its budget.
These people believe that VIA Rail is an essential part of our Canadian identity and have signed this petition praying that this Parliament will in fact oppose these cuts and stop them.


Mr. Ross Harvey (Edmonton East):: Mr. Speaker, as I did yesterday, as I expect to do tomorrow, as I know my
Routine Proceedings
colleagues and I will continue to do for as long as it takes, I rise under Standing Order 36 to present a petition, authorized by the clerk of petitions, to this House.
It is from a number of Canadians who are calling on the government to reverse its policy of the death of a thousand cuts to VIA Rail, calling on the government to enhance the service, not to cut such things as five of the seven weekly Supercontinental runs through Edmonton, not to annihilate train service through Calgary but rather to restore passenger rail service in this country to the effective levels that we all need.


Mr. Fred J. Mifflin (Bonavista-TVinity-Conception):: Mr. Speaker, I rise pursuant to Standing Order 36 to present two petitions, for a total of 60 signatures. They are based on the disillusionment, concern and uncertainty over the goods and services tax.
They humbly pray and call upon Parliament to reject this proposed goods and services tax. This petition is duly certified by the clerk of petitions.


Mrs. Beryl Gaffney (Nepean):: Mr. Speaker, I too rise under Standing Order 36 with regard to the goods and services tax as proposed by the Government of Canada.
This petition is signed by approximately 75 petitioners from across Canada who really believe that the new GST will cause serious and unfair hardship to low and middle income Canadians. On behalf of these petitioners I present this petition and pray that Parliament rejects the proposed goods and services tax.


Mr. Joe Fontana (London East):: Mr. Speaker, it is an honour and privilege to stand before this House and present petitions from Canadians from southwestern Ontario who ask this government to reverse its decision on the goods and services tax which will hurt every man, woman and child in southwestern Ontario and throughout Canada.


Mr. Rex Crawford (Kent):: Mr. Speaker, I am honoured today to present two petitions to the House pursuant to Standing Order 36.
I humbly pray and call upon Parliament to reject the proposed goods and services tax on behalf of these petitioners, Sir.

September 28, 1989
Routine Proceedings VIA RAIL


Mr. Nelson A. Riis (Kamloops):: Mr. Speaker, it is an honour to present a petition pursuant to Standing Order 36. It has been certified correct by the clerk of petitions. It is signed by petitioners from western Canada who are simply distressed that the government has decided to reduce VIA Rail services.
I am speaking for them when I say that they are moved to the point of depression. They are asking the government to reconsider this dastardly decision.


Mrs. Sheila Finestone (Mount Royal):: Mr. Speaker, I rise under the provisions of Standing Order 36 to bring to your attention petitions which call upon the government to show some consideration for the taxes that have been imposed upon Canadians over the past four years.
On behalf of these people who strongly oppose the new goods and services tax which they consider to be unprecedented as a grab from their pockets-and they are hit with not only higher taxes but with higher inflation, higher interest rates and higher unemployment-I call upon the government to stop the tax.


Mr. Joe Comuzzi (Thunder Bay-Nipigon):: Mr. Speaker, I have the honour today to present petitions from people from the city of Windsor. The petition is duly certified.
It prays that the goods and services tax that is proposed by this government be abolished in its present form.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Albert Cooper (Parliamentary Secretary to Government House Leader):: Mr. Speaker, the following questions will be answered today: Nos. 76 and 122.


Mr. Skelly (North Island-Powell River): Did the Secretary of State for External Affairs contact Mr. Robert Albert Callihoo, of the Michel Callihoo Indian Band, to discuss the matter of enfranchisement of the Band and was an appointment made with Mr. Callihoo and (a) if so, for what date (b) if not, for what reason?
Right Hon. Joe Clark (Secretary of State for External
Affairs): The Secretary of State for External Affairs did not contact Mr. Robert Albert Callihoo of the Michel Callihoo Indian Band to discuss the matter of enfranchisement of the band as this issue was deemed to be neither a constituency matter nor to fall under the mandate of the Department of External Affairs.


Mr. Kindy: For the years 1985 to 1988 inclusive, what is the dollar value of (a) lines of credit and loans given to China by the Government of Canada or its agencies and Crown Corporations (b) loans and subsidies given to Canadian companies to do business with China?
Hon. John C. Crosbie (Minister for International
Trade): Insofar as External Affairs and International Trade Canada, the Canadian International Development Agency and the Export Development Corporation are concerned, the reply is as follows:
In the years 1985 to 1988, the Export Development Corporation (EDC) had a Cdn $2 billion line of Credit with China. This was most recently renewed by EDC and the Minister for International Trade in October 1988. The value of loans provided by EDC for China from 1985 to 1988 inclusive was Cdn $472.6 million. EDC does not provide any direct loans or subsidies to Canadian firms.
Support to the private sector for activities in China during the period totalled $5.4 million under the Program for Export Market Development (PEMD), $1.75 million under the National Trade Strategy, and $15 million under the Industrial Cooperation Program of the Canadian International Development Agency.


Albert Glen Cooper: Mr. Speaker, I ask that the remaining
questions be allowed to stand.


Mr. Speaker:: The questions enumerated by the Parliamentary Secretary have been answered. Shall the remaining questions stand?
September 28, 1989


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


Right Hon. John N. Turner (Leader of the Opposition) moved:: That this House condemns the government for its mismanagement
of the Canadian economy, including:
1)	the threat to impose a new 9 per cent sales tax that is regressive, inequitable, invisible and inflationary;
2)	an unjustifiable high interest rate policy, with an interest rate spread between Canada and the United States that is at record highs;
3)	negligence in the management of Canadian trade causing unparalleled reductions in our trade balance and a loss of jobs, and threatening the survival of many formerly thriving Canadian industries;
4)	abandonment of Canadian primary producers with resulting undermining of the farming, fishing and forest industries; and
5)	continued neglect of regional disparities.
He said: Mr. Speaker, the new 9 per cent sales tax is the ultimate confession of failure of a government which said that it was dedicated to fiscal responsibility.
This government has lost control of the economy. Interest rates are spiralling upward. In five years the total public debt of Canada since Confederation has doubled. Annual deficits are still around $30 billion per year, and all of this despite the largest tax increases during the last five years in the history of our Confederation.

The Conservatives have increased taxes 31 times since 1984. If you add up the tax increases for a single-income family with two children and an annual income of $23,600, which in Canada means you are below the poverty line, the Tories increased their taxes by 60 per cent in the past five years. If you happen to be an average Canadian with an annual income of $45,000, thanks to the Tories your taxes went up 30 per cent in five years. If you are wealthy with an annual income of $100,000, that increase was only 8 per cent and if you earn $200,000 annually, it was only 4 per cent. Everybody knows this
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isn't fair. There is no equity in all this. The same applies to the new sales tax. It isn't fair either.
After letting their expenditures get completely out of control and raising personal income tax levels to the saturation point, Tories are now inflicting on Canadians the biggest, sneakiest and most regressive tax grab in our history. The impact of this tax will be particularly severe on lower and middle-income families. This means that the people in the poorest and most remote regions of our country will suffer most.
How big is this tax, Mr. Speaker? Well, if we add up all personal income tax collected by all ten provinces and the two territories, that amount is still less then what the Tory Government is going to collect from Canadians through its new sales tax. This is a tax that will be paid on practically all goods and services purchased by Canadians: shoes, socks, shirts, skirts, hats and coats, piano lessons, home repairs, plane tickets, stamps, lottery tickets, paper napkins, toothpaste and aspirin. Mr. Speaker, I have only twenty minutes -

The tax does not meet any of the criteria which the Prime Minister of this country and the Minister of Finance set forth for the tax. It does not meet one solitary principle they outlined to Canadians. They have been dishonest about this tax right from the beginning, right from day one.


Some Hon. Members:: Hear, hear!


John Napier Turner: Listen to what they said, Mr. Speaker. The Prime Minister and the Minister of Finance said that this tax would be revenue neutral. We asked them what this new vocabulary meant. The Minister and the Prime Minister said during the election campaign and prior to that, and I use their words: "Not one penny of additional tax", will be paid as a result of this new sales tax. Those were their words to Canadians during the election campaign. The Minister's own technical paper says there will be $5.5 billion more taken from Canadians.
The Canadian Federation of Independent Business says that that amount is $10 billion more. That is the figure used by the chairman of the finance committee of the House of Commons, the member for Mississauga South, who is in the House. Yet the Minister and Prime Minister said that that member was not right, and yet he

September 28, 1989
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was telling the truth. Now we are faced nationally with a new $29.7 billion tax grab.


Some Hon. Members:: Shame.


John Napier Turner: The Minister and the Prime Minister told Canadians it would be revenue neutral. Saying this tax would be revenue neutral was somewhat like saying that hurricane Hugo was like a warm summer breeze.

And what about the visibility of this tax? The Prime Minister and the Minister of Finance told us that consumers would be well aware of the tax and that it would appear separately on the sales slip, so we would see what proportion it would be of the sale price. The tax was supposed to be visible. And then one day, the Minister woke up in a cold sweat.
He suddenly realized that if his new sales tax appeared separately on the bill, consumers would know what they had to pay as a result of the tax and would know exactly who was responsible for this extra cost.
But the most important thing from his point of view is that if eveiyone knew what the tax rate was, he could not increase it eveiy year as he did with the old manufacturers' tax. The Minister of Finance increased this invisible tax from 9 per cent to 10, 11, 12 per cent, in short by 3.5 per cent in 5 years.

Now the tax will not be visible. It will not be on the sales slip. Instead, the minister is going to give to every business a little sticker to put at the check-out counter. The sticker will say, "Notice: Somewhere in your total bill is the new 9 per cent sales tax. If you cannot afford it, put some of those things back. Have a nice day" signed by Brian Mulroney.
The Minister of Finance and the Prime Minister said they would impose this tax only with provincial co-operation. In 1987 the minister told this House of Commons that without provincial co-operation any such sales tax would be, to use his words, unworkable; not a difficult tax to impose, not harder to do, but unworkable. So what happened? The Conservative government is now imposing a tax on Canadians which they themselves said was
unworkable. It is now being imposed without provincial co-operation.
The Prime Minister and minister said that they would remove the income tax surtaxes. They did not. They said they would lower personal tax rates. They did not.

The Prime Minister and the Minister said that the tax would be easy to administer, but that is not true!
The Canadian Federation of Independent Business believes that applying the tax will be a nightmare, much more complex that the taxes imposed by other countries;
4,000	new tax collectors-additional bureaucrats; a million small and medium-sized businesses will have to collect the tax for the Minister; every small business will have to spend $2,000 more because of the tax; the Retail Council of Canada says that it will cost $2 billion to collect the "easy to administer" tax; it will take more machines, two sets of accounts, two sets of cheques, two sets of transmittal forms. It is total anarchy for every private business person, for every small business in the country!

For example, the homebuilders' association told the finance committee the tax will increase the average house price by $3,000. That is just the average.
What about food? Originally the government said the tax would apply to food. We protested, Canadians protested. We deposited petitions here in the House.
Finally, in response to Canadians everywhere say-ing:"We don't want a tax on food", the Minister of Finance rose in this House on September 2, 1987, two years ago, and as reported at page 8700 of Hansard stated:
Let me make it absolutely clear. There is no proposal in this
document or any other document in Canada to tax food. That is a
fact.
Those were the minister's words. That was not a fact. That was pure fiction; that was pure deception; that was not coming clean with Canadians.


Some Hon. Members:: Hear, hear!


John Napier Turner: In 1987, we thought that the minister had relented. More important, all Canadians thought so too. Almost every newspaper in the country ran headlines that read: "No tax on food, says Minister of Finance". Now, the minister is laughing at Canadians; laughing at this House of Commons. He says that is not what he said. He said he just said there would be no tax on groceries. He said that he was very precise.
He knew exactly what he was doing. He knew that Canadians would assume that he had meant that he was not going to tax food. What did he do when he saw those headlines? He did not say anything to correct them. What did he do during the election? He did not say a word. He left Canadians with the impression that there would be no tax on food and now he says: "It's only basic groceries". He knows full well that if he had told the truth to Canadians he would not still be in his office as Minister of Finance.


Some Hon. Members:: Hear, hear!


John Napier Turner: What is the situation now? All food in restaurants, cafeterias, snack-bars, will be taxed. He is still debating the merits of taxing certain canned and frozen foods, and a whole range of other frozen products. About the only thing Canadians can be thankful for is they will not pay tax on food on trains; they will not get the chance because there will not be any more passenger trains left in the country.
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Some Hon. Members:: Shame!


John Napier Turner: The restaurant industry says that the new tax increases their tax burden by 612 per cent. Loblaws warns that food prices could jump by 10 per cent. The minister is proposing a confusing, hodge-podge of rules and regulations which will result in a whole bunch of ridiculous distinctions.
A frozen pizza in a grocery store is not going to be taxed unless it is heated up in the store before you get in. But if you buy a pizza from a pizza parlour, it will be taxed.
The same carton of milk will be taxed if you buy it in a restaurant, but it will not be taxed if you buy it in a grocery store. Milk in a paper cup is taxable in a restaurant, but in a carton it might not be taxed under certain conditions. Under the so-called streamlined accounting procedures milk, might be taxable and tax-free in the same store at different times of the year. That is a shambles, Mr. Speaker. That is ridiculous. How do you expect the corner grocery store, the comer pharmacy to deal with a confusion like this? Mr. Bulloch, in this sense, was right when he called the whole tax a nightmare.
To add insult to injury, the Prime Minister is trying to sell this as a tax cut. He is going across the country and saying: "Look, we are lowering the 13.5 per cent tax to a 9 per cent tax". That is an unbelievably fraudulent way to treat Canadians.


Some Hon. Members:: Hear, hear!


John Napier Turner: Mr. Speaker, it does not take a mathematical genius to figure out that a new 9 per cent tax at the retail level on a $300 armchair for your home would come to $27. But the $27 tax at 9 per cent on a $300 armchair is more than the 13.5 per cent tax on the wholesale price of that armchair of $100 which would only be $13.50.
So a retail tax at 9 per cent is higher than a 13.5 per cent tax at the wholesaler distribution level. Anybody can understand that, except the Prime Minister of Canada.


Some Hon. Members:: Hear, hear!


John Napier Turner: Mr. Speaker, we see that not a single criterion announced by the Prime Minister and the Finance Minister has been met. Not one! It is not revenue neutral, it is not visible, it is not easy to administer, the provinces are not participating, the personal income tax rate is not lower, the individual

September 28, 1989
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income surtax is not eliminated and it has an inflationary impact.
This tax therefore meets none of the criteria, the principles set even by the Prime Minister and the Minister of Finance and now they ask us to find alternatives.
There is no alternative to this tax. Get rid of it! Do not impose it. Go back to the drawing board. That is the alternative!
This tax cannot be salvaged or rescued. It does not meet any of the principles which the Prime Minister and the Minister of Finance set forth to this House. This tax is nothing but a licence to print money for the government. It is a licence that Canadians want revoked. This tax is coming out of their pockets. It is coming out of our savings accounts, pension cheques, family allowance cheques, unemployment insurance cheques, our budgets for clothes and shoes, and it is on top of rental payments, mortgage payments, and utility bill payments.
As I said to the students at Dalhousie last week and will say again at the University of British Columbia on Monday, for the first time in the history of this country we have a tax on learning, a tax on reading, a tax on literacy, a tax on books. Yet, the Prime Minister, talking to his national convention a few weeks ago, said that education was the priority in the next four years of his government. What a farce! What deception!
It is a tax on pollution-control equipment from a government that said it would do everything to stop pollution. It is a tax on sickness. It is a tax on housing. It is a tax on raising children. It is a tax on the necessities of life. For God's sake, Mr. Speaker, it is even a tax on death.
It is a tax to pay for the government's own mismanagement. It is a tax to pay for the government's own incompetence. We will all pay hundreds and thousands of dollars more for the simple reason that the Tory government has made a complete mess of the fiscal situation. They botched it and now they want Canadians to try to rescue them and pay the price. Well I say, Mr. Speaker, it cannot be rescued. It cannot be tinkered with. It is so fundamentally flawed it has to be scrapped and
the minister has to go back to the drawing board and withdraw the tax.
We intend to fight this tax all the way. It is a bad tax. We are telling this government it is time to scrap this idea and go back to the drawing board. Canadians are fed up with the dishonesty behind the tax. Canadians are fed up with this 9 per cent tax. They are fed up with this government.
I say to the Prime Minister: "You had better listen to what the people of Canada are telling us and your own members." It is coming in loud and clear whether you live in Whitehorse, Vancouver, Toronto, Trois-Rivieres, Halifax or Comer Brook. It is coming from ordinary Canadians, from the elderly, from seniors, from our students, from single mothers, from the business community, and it is virtually unanimous. It is saying to the Prime Minister of this country: "Scrap this tax. No more double talk. No more of these extravagant newspaper ads. No more phoney sales pitches. No more of this tax. Scrap it, get rid of it, and bring us back something that makes sense".


Some Hon. Members:: Hear, hear!


Mr. Speaker:: I will recognize the hon. member for Hamilton East on questions and comments. I will come to the hon. member for Kamloops in a moment.


Ms. Copps:: Mr. Speaker, I think we have just had an impassioned analysis of the situation. I would like to ask the Hon. Member for Vancouver Quadra whether in fact, given the parameters of this tax, and given the fact that everything the Prime Minister said he did not do he has done, do you think that the Prime Minister will actually listen to Canadians and listen to the Leader of the Opposition? Do you really think he will scrap this tax?


John Napier Turner: I think if the Prime
Minister listens to Canadians, if he listens to his own members of Parliament, some of whom are in the Chamber today, if he travels about the country as all of us are travelling listening to our own constituents and Canadians everywhere, he will not only get the message, he will start feeling the heat.
If I were the Minister of Finance I would listen very carefully to the daily pronouncements of his Prime Minister because I think the Prime Minister is wavering.
September 28, 1989

If I were the Minister of Finance I would feel the Bunsen burner right under my backside.


Nelson Andrew Riis: I listened very carefully to the speech of the Leader of the Official Opposition, and I agreed with virtually everything he had to say. I have a question. I heard him say that he was against this sales tax, that this is a mean and a terrible tax, and he had a whole host of good critical comments to make. The question I want to put to him is a very simple one. Does he and his Party oppose the concept of a consumption tax? Would he commit himself and his party today to never, ever supporting a consumption tax of this nature, that they are against the idea of imposing a sales tax on the people of Canada? Perhaps a very tight answer might be appropriate for this question.


John Napier Turner: Only a government has the authority under our rules to bring in a tax. As you know, we cannot amend it from the floor. It has to have the warrant of the Crown signed by the Minister of Finance in order to make it applicable.
We are examining a tax that does not meet any of the criteria which the government itself put on a tax, criteria which we stated in our minority report in the last parliament were necessary even before you could consider a value added or a consumption tax, or something of that sort. We said it would have to be visible if there were any way we would ever contemplate it; it would have to be provincially drafted and co-ordinated, and it is not; we said there would have to be some progressivity in it. It is so warped on the basis of the minister and the Prime Minister's own criteria that there is no way, in our view, that it can be improved, or amended. You have to go right back to the drawing board.
We said during the election that we were against the sales tax. We still are. We would look at a better combination of progressivity, at a better balance between taxes on the various elements in an economy than this.
Also, it has to be looked at within the general scope of the economy. Fiscal and monetary policy have to be taken together. Also, consideration must be given to what the government has allowed to happen to our
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exchange rate as part of the secret deal that I believe exists with the United States under the trade agreement.


Nelson Andrew Riis: I appreciated the response given by the Leader of the Official Opposition. I have been trying to think, while he was making his very thoughtful presentation today, how we differ in terms of the Liberal Party and the New Democratic Party. I think I have found the way.
We are clearly of a mind that we oppose the principle and concept of a national sales tax, of a consumption tax, of a tax on consumption of any kind. We totally oppose it. I think what I am hearing the Hon. Leader of the Official Opposition say is that, on principle, they do not necessarily oppose that, but they oppose this particular tax. This is a mean, rotten, bad tax, there is no question about it. But perhaps in another form, in another way, they would consider it.
If we are trying to figure out how we do differ, because we are both fighting this tax, would he agree that perhaps this is the way that we do differ? We oppose it on principle and you really buy the principle, it is just that you really oppose this particular tax?


John Napier Turner: I want to suggest to the Hon. Member for Kamloops, who in an earlier incarnation shared a lot of our views, that he can read what he wants into what I have said, but should not put too much confidence in his reading.
The real difference between a Liberal approach to taxation and an NDP approach to taxation is that someday we will have to implement it.


Mr. Speaker:: The hon. member for The Battlefords- Meadow Lake.


Mr. Taylor:: I wish to follow up my House leader's question from a few minutes ago in terms of the way in which the Leader of the Official Opposition is opposing this goods and services tax. The wording of the motion is quite specific. The first item reads:
1) the threat to impose a new 9 per cent sales tax-
Could the Leader of the Opposition clarify that the comments he made throughout his well-argued speech would also apply to this item if it read 4 per cent sales tax, or 7 per cent sales tax? Do his arguments apply to any number there, as opposed to the specific 9 per cent which is mentioned in his motion today?

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John Napier Turner: I want to thank the hon. member for listening so closely to what I had to say. I hope he profited by it, and I hope it is reflected in his own speech when he addresses the House.
I said that the tax is so flawed you cannot tinker with it. That means you cannot play with the numbers.


Mr. Speaker:: The hon. member for Winnipeg South.


Mrs. Dobbie:: I would like to ask the hon. member, since he sees that this tax is such a negative tax and such a blight, according to what he has had to say, what concrete and positive proposals he would like to bring to the Canadian people as an alternative to this tax?


John Napier Turner: The hon. member is entitled, representing a constituency in this country, to put that question. Before I answer it fully, she really should assure me that what she reflects carries the support of all the people in her constituency. We heard her colleague from Edmonton deposit about 6,000 names representing what his constituency feels. I wonder whether she could assure us that she speaks for her constituency and that the people are behind that tax as she seems to indicate she is.


Hon. Gilles Loiselle (Minister of State (Finance)):: Mr. Speaker, I have listened very carefully to the speech by the Hon. Leader of the Opposition. Since I am getting on in years, I have discovered that much of what is too exaggerated does not exist. I feel that to be so negative on so many points indicates a certain weakness in the argument.
What he has convinced me of is that we are not doing this because we intend to win a popularity contest. We are doing it because this government has a long-term plan to build a strong economy for Canada. The plan is aimed at such vital objectives as reducing our deficit, controlling the growth of national debt, of removing obstacles to Canada's economic growth, and fostering innovation and competitiveness in the business sector.
Our plan is working. There are factual independent measurements of its progress because 1.5 million new jobs have been created in Canada over the past five years; 86 per cent of them full-time, and 57 per cent filled by women. Unemployment rates have dropped in
every region of our country. Youth unemployment has dropped by 7 per cent as more and more Canadians have joined in our economic renewal. The economy has expanded by 20 per cent. Business investment is up by 95 per cent, and average after tax disposable income is up by $1,600. The government's annual deficit has been cut by about $9.5 billion below its level of 1984-1985.
Our plan is also aimed at providing more assistance to Canadians in need through our social programs. That is something the opposition always seems to forget. Only by having a dynamic economy, led by a vibrant business sector, coupled with a fair and effective tax structure, can we provide these services today without imposing an insupportable burden of debt on future generations.
I have listened carefully to the comments made by opposition members about our comprehensive proposals for sales tax reform, and frankly, I am not very impressed. I am waiting to hear their proposals for sales tax reform. How could they replace the current manufacturers sales tax, a tax that has been universally condemned by nearly every interest group in this country as a destructive, discriminatory, and unfair tax?
This important reform of our tax system is an essential element of the plan for economic renewal that this government began five years ago.

As far as interest rates are concerned, I maintain that it would be irresponsible and in fact counter-productive to lower rates before inflationary symptoms have eased off. It would certainly not be a good way to manage the economy. There would be a heavy price to pay for any short-term relief that might result. Business, labour and other levels of government must realize that this Government will not tolerate measures that are inflationary. However, to beat inflation, both the public and private sectors of our economy must be involved.
The federal Government will continue to implement responsible monetary and financial policies in order to defuse inflationary trends. As inflation eases off, we will see the benefits as reflected by a drop in interest rates, a more competitive economy, stronger growth, more jobs and a higher standard of living for all Canadians.



Our GST package, and I stress "package", contributes to these objectives. First, by contributing to the deficit reduction effort and ensuring that we can continue to pay for programs and services Canadians value. Second, by helping to ensure that Canada can compete in the world economy. Third, by improving the over-all fairness of the tax system.
Since we released our proposals in August, a number of misconceptions about the GST have arisen. I welcome this opportunity today to put these misconceptions to rest and to get the facts on the table.
To begin with, it can be taken as a given that we would all prefer taxes to be lower rather than higher. That goes without saying. But it also goes without saying that they are a necessary part of a civilized and modern society. The government knew that its proposals would be controversial.
No one likes taxes and we recognize the sacrifices that Canadians have been asked to make to help deal with the deficit. Life could have been easier for all of us if we had been content to let the subject of tax reform drift, as past governments have done. But, for a government that takes its responsibility seriously, that was just not acceptable. Our objective is to have the fairest and most efficient tax system that can be designed.
Very few Canadians are aware that they already pay a hidden federal sales tax of 13.5 per cent when they purchase manufactured goods. They do not realize that this 13.5 per cent manufacturer's tax generates production losses of as much as $9 billion annually for Canadian businesses, exporters and workers.
The present tax has another drawback: widely varying rates increase the risk of distorting consumer choices.
If prices contain distortions, it is practically impossible to make an informed choice. Our economy's resources are not being used to their fullest extent. We cannot maximize our production potential and that has an impact on jobs.
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The existing tax is very complex. It applies to only 75,000 businesses but has generated 22,000 special provisions and administrative interpretations.
Under the existing federal tax, which may be as high as 19 per cent on certain goods, we are taxing business inputs while our foreign competitors do not. Our entrepreneurs are therefore at a disadvantage, both domestically and on foreign markets, and this has an impact on employment.
Furthermore, with the exception of automobiles where the tax affects wholesalers, the taxable value of imported goods does not include the foreign manufacturer's marketing and distribution costs, while these are usually included in the value of domestic goods.
This means that on average, the amount of tax paid on most Canadian goods is almost a third more than the tax collected on imports. The importer pays a lower tax and can therefore sell more cheaply. This, too, costs jobs.
The federal sales tax as we know it today goes back 65 years, to a time when production and distribution patterns were relatively simple. However, the economy has changed drastically since then, and Canadians must move ahead.
Sixty-five years ago, manufacturers manufactured and distributors distributed, with little involvement in retail sales. Today, the situation has changed. Many retailers are involved in manufacturing, and some manufacturers are directly involved in retail sales. Other industrialized countries are in the same situation and have adapted their tax system. Today, only Canada has maintained a tax on manufactured goods.

I think it is safe to say that the GST is not a well kept secret and that by January 1991 we will make sure that consumers are well aware of how much GST they are paying. Certainly GST is going to be much more visible than the present federal sales tax that is buried throughout the production process. The GST is part of the five-year fiscal plan put forward in the April budget which will see the government's cash requirement reduced year by year to zero. The GST has been designed as an integral part of our fiscal strategy.
I would like to remind the hon. members that the GST is a carefully balanced package. In order to change one element other parts must be balanced. If the rate were to

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be lowered another element would have to change. The base would have to broaden, the credit lowered or the deficit increased.
Canadians know by now that our government is serious about revitalizing the Canadian economy and ensuring a strong and prosperous future for this country.
Our record since 1984 speaks for itself. Our critics do not have a monopoly on compassion and fairness when it comes to dealing with Canadians who need assistance. Our government is committed to reforming the tax system to ensure fairness for Canadians right across the country.
We are serious about reducing the cost to government and about reducing the deficit. At the same time we are serious about maintaining the services that Canadians look to their government to provide. The goods and service tax will ensure that these goals are met.


Mr. Bellemare:: Mr. Speaker, I have a question for the Minister who was a journalist at the newspaper where I was a cartoonist when I was a university student. I congratulate him for being the Minister responsible, but I have this question that I want to ask him. I am still thinking about the time when I was a student and the Minister was encouraging students. Does the Minister propose taxing cartoons? Does the Minister propose taxing comic strips? Does the Minister propose taxing comic books intended to help educate young people? Does the Minister propose taxing school texts? Is the Minister for students and young people? The Minister said that we had to talk about being fair, I heard him mention the words fair and civilized, and that Canadians have to keep up with progress. Mr. Speaker, is beating up on youth and students progress?


Gilles Loiselle: Mr. Speaker, I believe that my hon. colleague is raising an extremely important question. When this tax, this reform project based on a multi-stage tax, was considered, we paid a great deal of attention to fairness. That is why instead of making the choices for the citizens ourselves, we ensured that they would make the choices themselves and those who have less freedom of choice because they have less income, in particular students, would receive compensating credits.
As for books, you must understand as well that we granted special provisions for universities, libraries and public agencies. This is not a tax on culture, if you will. To be fair and equitable, for the rate to be low, the tax must apply to as many items as possible. Otherwise, it is taking from one pocket and putting in another. But to restore fairness to a system, I agree with him that without credits and compensating measures, it would be an unfair, regressive system. We have what has been described by the taxation office as perhaps the fairest system in the world, according to tax experts' studies.


Mr. Rodriguez:: Mr. Speaker, I listened to the hon.
minister very carefully. He is a man of honour and I have a great deal of respect for him. I have had dealings with him in the past and I have some respect for him.
I find it rather strange, because when a goods and services tax was first announced by the government Canadians were told that it would be revenue neutral. They were told that it would be visible. They were told that it would be simple. They were told that it would be integrated with the provincial scheme.
We did not hear at that time about this tax being used to reduce deficits. We were not being told that this was going to be used to reduce a national debt. We were not told that this would involve some 6,000 bureaucrats which has got to be an anathema to any true Conservative.
Canadians are getting a little bit cheesed off with the lying that is going on; they do not like to be lied to. This government promised that it was going to be revenue neutral, and now we are hearing that once this cash cow gets into the barn the government is going to run off into the stable and pull a few billion dollars off this cow every time it needs it to reduce the deficit or the national debt.
Why? The question is: "Why has this government lied to Canadians and why does it continue to lie to Canadians?" That is the question, Mr. Speaker.


Gilles Loiselle: I thank the hon. member for Nickel Belt for his question and his remarks. I would tell him that we did not lie. We have explained from the beginning that the purpose of this type of mechanism of tax reform would not be used per se to increase the revenue of the government. We said it would be used to replace a bad

tax, the present federal sales tax, and to make it, I would say, not regressive.
I think the hon. member would agree with me that we have devised a system of credit because we have also promised that it would not hinder affordability of housing. So the package in itself is a very well balanced package and it does not in any way bring additional revenue to the government for other spending.
As far as visibility is concerned, I would be inclined to smile at this because the tax does not exist and it is probably the most visible thing in the country at the present time and will remain so, as it is in other countries, for the future.
As far as a national tax with the provinces is concerned, for two years we have worked with the provinces to try to arrive at a system, which we would have preferred. We know that to implement such a tax is a difficult political thing to do, even if it is necessary. To get 11 governments to come together at the one precise time is not an easy objective to reach. We have tried to do it but we can understand and respect the other governments of the provinces that do not have the problem we have with their sales tax, which is a rather straightforward consumption tax. It works. In our case we have a disastrous tax.
He talks about revenue and deficit reduction. We know that the present sales tax is extremely porous. While we increase the rate the income keeps going down proportionately because manufacturers will find ways of escaping and avoiding the tax. Through the new system, which is much more modern and which has been chosen by all modem countries, we will prevent our revenue from disappearing and in this way we will help reduce the deficit.


Leonard William (Len) Taylor: Mr. Speaker, in asking my question I want to make it very clear that I oppose the tax and think it should be knocked out completely, not tinkered with. But the government and the finance committee have indicated on a number of occasions that they are prepared to do some tinkering with the tax. If that is as close as they can come to listening to the people of Canada and will go ahead with that tinkering, while I reject that idea I will ask a question of the minister who on other
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occasions has indicated a great knowledge of the credit union system in Canada.
The credit unions have said that they would be disproportionately taxed by the new goods and services tax. In their submission before the finance committee they talked about financial services being exempt. However, when the GST goes into effect credit unions will have to pay the tax on shared networks, training, consulting, tax processing, and cheque clearing because of the way their system is set up. Can this minister inform us in the House if plans are under way to continue to tinker with this tax to change it to apply to the credit unions?


Gilles Loiselle: I would like to thank the hon. member for a very important question. Indeed the problem he has indicated to me is a serious and difficult one. I would like to inform him officially today that we are aware of the particular situation facing the co-operatives and credit unions and that we are going to find a way of solving that problem because we do not want to be unfair to this movement.


Nelson Andrew Riis: Mr. Speaker, I must say that I am absolutely delighted to participate in the debate today and pleased to have an opportunity to lend some commentary toward the motion that simply describes the host of ways in which this government has mismanaged the Canadian economy and, as my colleague from Nickel Belt said earlier today, how we have been exposed to a whole set of lies by the government. I suppose we might as well call a spade a spade and simply call it that.
When you look at even a small part of Canada-and I refer simply to the constituency that I have the honour to represent, the Kamloops constituency-we have had again a whole host of mistruths stated regarding what this government would do for our area. For example, it suggested that it would enhance VIA Rail service. Now we find out that it is going either to eliminate totally VIA Rail service in some parts of Canada or curtail it very seriously.
Then it said it was going to support more post-secondary education. Yet before us on the Order Paper there will soon be legislation to cut back on transfer payments to the provinces for post-secondary education.
It said it was interested in helping develop our forest resources, yet the government refuses to sign the forest agreements with the province of British Columbia to add funding for reforestation, silviculture. It simply suggests

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that we go to the Western Diversification Fund. We are not talking about diversification of the economy; we are simply talking about enhancing the forest resource.
It suggested that it would help the mining industry. Rather than helping the mining industry it is eliminating programs that encourage the exploration for more and new mineral deposits.
It said that it was concerned about illiteracy and we saw that it brought in a tax on reading. I think we are now the only country in the world where the government has imposed a tax on books, periodicals, magazines and reading material to make it more expensive and therefore a disincentive, if you like, to encourage people to develop their reading and analytic skills.
The government said it would help ranchers because of the severe drought situation. There are huge cattle ranches in the central interior that receive no drought assistance and support at all.
It said it would enhance tourism and yet refuses to sign a new tourism agreement with the province of British Columbia. As the tourist association told the finance committee last night, about 30,000 jobs will be lost in this sector because of the 9 per cent sales tax that will be introduced on all tourist services, which will essentially price a good number of our tourist operations out of the market.
It said it would clean up the environment, yet refuses to help any of the municipalities and towns across Canada develop their sewage treatment facilities in terms of a cost sharing basis with the provincial governments which are quite anxious to participate. It promised a comprehensive child care program and then reneged on that child care program; it has abandoned all intentions of supporting that.
It said it would enhance the fishing industry, and we have found out in the last number of days that the fishing industries on the east coast and the west coast are in a state of crisis, a state of collapse, because of the policies of the government.
I could go on and on. The Prime Minister has heard this list before and simply has to stand there and agree that "yes, this is the case; that in spite of all of these promises that we are going to take all of these different
initiatives, we have reneged on them all. We have broken the promises that we have made. We have lied time and time again and that is just the way the world is."
I will tell you, Mr. Speaker, Canadians are fed up with that Tory world and when they get another chance to go to the ballot boxes, once again this will ensure that this set of promises will never even be listened to again in terms of a future government of this country.
I want to, before I get into an analysis of the 9 per cent sales tax, simply refer very briefly to the free trade agreement. While the government was jamming this legislation through the House of Commons it indicated that all sorts of economic opportunities would take place in Canada. Everybody else who had analysed the free trade agreement clearly found once that border was removed, the industrial sector and business sector of Canada would move their operations to the United States where they could produce their materials more cheaply for a whole host of reasons.
Now we have, of course, a very long list of companies that have done just that and have taken advantage of the ease of moving their operations to the United States.
I just want to read a handful of these into the record as an example of this particular transfer of jobs south or, as others call it, the Americanization of Canada: Canron Incorporated shifted production to its plant in Columbia, South Carolina. Burlington Canada Incorporated moved its plants into Georgia and Virginia. Hartz Canada moved its production to a number of United States plants in the deep south. Picker International Canada Incorporated transferred its production to Cleveland, Ohio. International Playing Card Company moved its production to Cincinnati, Ohio. Star Suspension Industries moved its product development to the United States parent plant.
Woodbridge Group moved down to Mexico, again to take advantage of free trade areas on the Mexican-U.S. border. Bendix Safety Restraints moved its plants to Alabama and to the Mexico zone. Marr's Leisure Products moved its production to Newberry, South Carolina. Takahashi Industries moved its production to Seattle, Washington. Executive Dental Supply moved its production to Pullman, Washington. ITW Shakeproof moved
September 28, 1989

production to Tennessee. Advanced Gibson Canada moved down to Pennsylvania; and Progress Company moved its plant to Philadelphia, Pennsylvania.
K. T. Industries downsized and moved its production facilities to Fort Wayne, Indiana. Northern Telecom, with hundreds of jobs to a total of 1,500, shifted its facilities into Dallas, Texas and down into the southern part of California. United Maple Products moved its production to Vermount. Canadian Coleman moved down to Texas and Kansas. Leviton Manufacturing transferred its production line of electrical goods to the United States, again down into the Mississippi area. I could go on and on, Mr. Speaker.
I just repeat that we now have literally dozens and dozens of major Canadians firms that have moved their production into the United States. There has been the transfer of over 50,000 Canadian jobs into the United States as a result of the free trade deal. We are seeing our worst fears being realized.
However, I want to turn my comments today to the 9 per cent national sales tax, the goods and services tax, or the grief and suffering tax that has become more associated with the title.
I looked at the newspapers this morning that were referring to this tax, as different groups have commented in the last two or three days. Some of the names they used to describe the tax were: a very bad tax, an insidious tax, an oppressive tax, a ridiculous tax, a regressive tax, a vicious tax, a mean tax, a cruel tax, a harsh tax, a punitive tax, a brutal tax, a destructive tax.
I have been looking in newspapers now for the last three weeks at virtually every article and I have yet to find a single group, a single organization, a single agency, a single person with credibility in the tax area that supports this tax and says this is a good idea. The only exception is the Prime Minister and the Minister of Finance.
Tsee the hon. member from Edmonton here. I even hear a whole host of Conservative back-benchers say that this is a terrible tax, that they should not be introducing it and that the Minister of Finance should not be pursuing it at this point. Every Premier across
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Canada and every single group that has spoken out in the last couple of weeks have spoken against this tax.
Even the Liberal party has spoken against this tax. I think it is appropriate to make the comment that what the Liberal party is saying is that it does not support this 9 per cent tax. It might support a 7 per cent tax or a 6 per cent tax with some modification and so on.


Some Hon. Members:: Oh, oh!


Nelson Andrew Riis: My hon. friends can ask me some questions to elaborate on this at the end of my speech, but it appears to me that the Conservatives think this is a deliriously wonderful 9 per cent cruel, mean tax that they want to impose on the people of Canada. The Liberals are not quite sure that this is the kind of mean, cruel tax that they would impose, but they would modify it somewhat and make their imposition.
I will say that there is one party that will never impose a sales tax, a consumption tax on the people of Canada, and that is the New Democratic Party, never.
Let me continue with what this tax does, this mean, cruel, horrible tax.


An Hon. Member:: It is a crushing tax.


Nelson Andrew Riis: A crushing tax, as my hon. friend indicated. When he says "crushing", he means crushing. This is going to crush the life right out of the economy. It is going to crush the kind of lifestyles that people have been struggling to develop over the last little while.
A typical Canadian family today is going to have not $100, not $200, not $500, but $850 yanked out of its pocket every year as a result of this tax. T hat is the most modest estimate. I have all sorts of information here.
For example, the Consumer's Association of Canada, which has a very through research branch, says that every man, woman and child will be hit with at least $1,000 a year in additional taxes as a result of this 9 per cent tax. That is not the New Democratic Party saying that; it is the Consumer's Association of Canada that says $1,000 a year, at least, for every man, for every woman, for every child. For a typical family of four it is $4,000 minimum that will be yanked out of its pocket.
Not only will those people not have that money to purchase necessary goods and services, but the community will not have that money. In a community like Kamloops with a population of 65,000 people, at $1,000 a

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person hundreds of thousands of dollars each day will be yanked out of that community, dragged down to Ottawa to be spent on some pretty peculiar and questionable uses.
That is not the way you generate economic activity, by taking away that money that could be used to purchase goods and services, certainly those necessary goods and services. What is going to be taxed? From the crib to the coffin, from haircuts to movies, from laundries to lawyers, from kids' snowsuits to hunting licences. These are all new areas that have never been taxed before.
This is the largest tax grab in Canadian history since the imposition of the personal income tax which the government of the day said would last just a couple of years. Back in 1917 the government said that this was a tax to get us out of debt as a result of the war effort and that as soon as we are out of debt it would take away this personal sales tax. We know that personal sales tax has stayed in place and has gone up until now when we have this crushing burden of tax including personal tax, excise tax, and gas tax. Now we are going to add another big tax on our back. This is a party of tax, tax, tax. The Conservative Party is a tax party.
The Minister of Finance will know that since this government came to office in 1984 the average family in Canada has paid at least $1,300 more in federal taxes, and now we are just going to be slammed between the eyes with another 9 per cent consumption tax on all these goods and services.
Nobody can imagine a government that says: "We have got a great idea. We are going to tax snowsuits for children. We are going to tax children's books". Imagine taxing children's books.
Imagine taxing haircuts. My dad is 86 years old. When he goes down to get a haircut with his pension he is going to have to pay a Mulroney sales tax of 9 per cent on his haircut; when he buys his shirts and when he goes to a movie-on everything. This is a cash cow that this government has created to generate, not millions, not thousands of millions, but billions and billions of dollars in additional funds every year.
The economy cannot take it and Canadians will not take it. That is why we say that this government has to back off on this tax initiative. It is not only the New Democratic Party that says this is a tax that we must not
proceed with. There are some other groups that you would be interested in hearing from, Mr. Speaker. The Canadian Federation of Independent Business opposes this tax. The Canadian Organization of Small Business opposes this tax. The Consumer's Association of Canada opposes this tax. The National Council of Welfare opposes the tax. The Canadian Home Builder's Association opposes this tax, because it says that this tax will add thousands of dollars to the price of a new home.
We already know that the housing market is overpriced now and that it is virtually impossible for young Canadians to even consider owning their own home. This government's solution is to tax it again, raise the tax on the price of a new home. But it says: "Well, we are going to exempt rental". That is only partially true because all of the inputs into rental housing, the janitorial services, repairs, renovations, heating, advertising fees, landscaping and maintenance will all be taxed and one can rest assured that the landlord will take those additional 9 per cent taxes and pass them along in terms of the rent. Indirectly, even rentals will be increased substantially as a result of this tax.
That is not all. Wood Gundy, one of the most outstanding financial analysts in the country, has said this is a punitive, mean-spirited tax. The Coalition of Senior Citizens opposes the tax. The One Voice Seniors Network strongly opposes the tax. The Canadian Conference of the Arts strongly opposes the tax. The Canadian Association of Universities opposes the tax. The Canadian Bar Association opposes the tax.
The Canadian food industry is deliriously in opposition to taxation when the pizza at Pizza Hut will be taxed 9 per cent and the pizza you buy in the grocery store will not be taxed. What kind of nonsense is this? What kind of an unfair, biased, discriminatory tax is this? Not surprisingly, the industry opposes it. The Conference Board of Canada opposes it.
I think if we were to honestly analyse the process, we would say that the Conference Board of Canada, with its first-rate research department, looks carefully at these kinds of initiatives and then makes its observations. It came out strongly in opposition to this tax saying that it is going to cost thousands and thousands of jobs. The Conference Board of Canada said that this 9 per cent tax
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will lose tens of thousands of jobs in this country. We have to listen to this group.
I do not understand the government. When it is confronted with the Canadian Bankers Association, its friends in the banking community, the Institute for Policy Analysis and its own back-benchers, to whom does it listen? To whom is the Minister of Finance listening? I have yet to hear a single group stand up and say it thinks this tax is a good tax.
Why are people not to trust this Minister of Finance? He said at the beginning of this process that the tax would be revenue neutral, that as we phase out the manufacturers' sales tax, we are going to impose a sales tax but we are not going to make any money out of it. That is not true. Already, this is billions over what the manufacturers' tax brings in. It is billions and billions of dollars over being revenue neutral.
The Minister promised that the tax would be simple. We are seeing quite the contrary. I have here the brief of the members of the Canadian Federation of Independent Business who again are almost unable to speak when they refer to this tax. John Bulloch, one of the most outstanding supporters of the government on almost every issue, says that this government must fall, that the Minister of Finance must resign, and that they ought to be hanging their heads in shame as they back off on this tax and start over with a fair system. He points out on behalf of the small business community that this tax is unworkable, that it cannot be done and is going to be punitive to small business. Small business is all tangled up in red tape now and they have tax collectors hassling them day and night. What will this do? We will have to hire not one, not two, not five, but maybe 10,000 more tax collectors.
New Zealand, with a population of 3.3 million, has over 5,000 new tax collectors. We have a population of 26 million, so when that is factored out, we can say we are going to have thousands more tax collectors now.
I do not know why my friends in the Conservative benches are not up in their seats shouting and yelling today because the small businesses in their communities are going to be harassed beyond belief with new paper flows. There will be a blizzard of forms coming into those businesses and tax collectors will be hassling them. Mr. Bulloch says it is going to cost at least $2 billion for just the small business sectors to comply with this tax.
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The Minister of Finance said that he would not proceed with the tax unless the provincial governments co-operated and we would have a melded provincial-federal tax. That has gone by the board completely. Now we are going to have a combined federal-provincial tax in British Columbia of 15 per cent. In Newfoundland it will be 21 per cent and it will be changing right across the whole country. What a mishmash. Not a country in the world has a tax system of that nature.
The minister promised that the tax would be visible on all sales slips. We all know that they have abandoned that promise a long time ago. It will not be visible.
There is so much more one could say and should say. The New Democratic Party not only opposes this tax but opposes the principle of this tax. This is a regressive tax. When a poor family buys snow tires for the winter coming up and has to pay a 9 per cent sales tax and the wealthy family with an income of $200,000 a year buys those same snow tires, they both pay the same amount of sales tax. How is that fair? How is that just? How is that equitable? That just points out the discriminatory, biased nature of this tax to the middle-income and low-income families of the country.
We as New Democrats oppose this 9 per cent tax. We do not care if the government reduces it to 8 per cent, 6 per cent or 5 five per cent, because we know very well that within a matter of time, it will be jacked up to 10 per cent, 15 per cent, 20 per cent. Some European countries now have it has high as 22 per cent.
In closing, we oppose not only this tax initiative, but we oppose the principle of a consumption tax as being regressive, mean and unfair. We will do everything that we possibly can in the intervening period to convince the government, along with many of the Conservative backbenchers, to stop progressing with this particular tax, to go back to the drawing board and to start over with real tax reform that is fair and ask those corporations and those individuals who are not paying their fair share to start paying their fair share.


Mr. Jelinek:: I have a very simple question for the hon. member. He says that he and his Party oppose categorically any consumption tax. I would like to ask him whether he supports and agrees with the existing federal manufacturers' sales tax. As a former businessman and as a former manufacturer, I know from experience that the existing manufacturers' sales tax is a major obstacle for Canadian manufacturers and producers in terms of

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fairness, competitiveness and international trade opportunities.
Obviously, the reason for this government's move in proposing a fairer system, which we believe the GST is all about, is to give Canadian producers and manufacturers an opportunity to be competitive both domestically and more importantly, internationally so as to compete on a level playing field which they are not doing today.
The hon. member knows full well that 48 countries around the world have a similar tax to the GST, a value-added or consumption tax, therefore giving an advantage to all of those manufacturers in those countries over our manufacturers in our country. Unless we remove this obstacle, we will not create the opportunities for our manufacturers and producers to create the type of competitive spirit that is held elsewhere around the world and therefore to create the jobs that are necessary to be created.
Does the hon. member support that existing tax? If he does not, what would he and the New Democratic Party replace that tax with? That tax, as he well knows, brings in revenue of some $18 billion today which goes toward many of the social programs as well as many of the things that both my hon. friend and I believe Canadians want, desire, need and will continue to have.
I would like the hon. member to say what he and his party would propose to replace the existing manufacturers' sales tax, if in fact he is opposed to that sales tax and agrees with me that it is an obstacle in the way of Canadian producers and manufacturers.


Nelson Andrew Riis: I appreciate the question of my hon. friend. Yes, indeed, the manufacturers' sales tax has to go. The Minister of Finance on occasion has referred to the existing manufacturers' sales tax as a killer of jobs. I think he used that term, Mr. Speaker. You remember that he said it was a killer of jobs. Yet I am puzzled because if this is a tax that kills jobs, why would the government increase it time and time again? I remember back in 1984 when the Conservative government took office, it was 9 per cent. Now it is 13.5 per cent and I am curious why a government that identifies a tax as a killer of jobs, that creates an unfair advantage for foreign
importers against our own manufacturers, would increase that tax once, twice, three or four times. I am not referring to the hon. member, but the government itself. It is a bit hypocritical to be saying that this is a killer of jobs and then to keep increasing the tax so it can kill off more jobs.
To answer my hon. friend seriously, yes, we believe that the manufacturers' sales tax should be phased out over time. I do not think we have to drop it from 13.5 per cent to zero overnight, but there should be a commitment to phase it out over a period of time that would make sense to the manufacturing community and we should replace it with some changes to our tax system.
Let me offer three or four examples. The United States has in place a minimum corporate tax .The Reagan administration back in 1986 saw all of these corporations that paid no income tax and said that was wrong and that they should pay some, so it introduced a minimum corporate tax. We say we should do that in Canada. As we all well know, there are 60,000 profitable corporations in this country that do not pay a penny in income tax, let alone 50 cents. Let us have the minimum corporate tax to generate some new revenue like they have done in most other countries.
Second may I humbly suggest that many of the corporate tax incentives, the tax exemptions, or the tax loopholes, are not necessary. Billions and billions and billions of dollars each year are lost from our federal treasury through silly corporate tax loopholes. Even the corporations say they are silly and that we do not get the bang for the buck. It costs us $500 million for a certain tax incentive and we do not get very much in return. Let us close off some of these large corporate loopholes.


Mr. Dorin:: Name one.


Nelson Andrew Riis: The finance committee has gone on at some length to name some of the silly corporate loopholes. I would ask my friend to name one that works, one that is good. I remember my hon. friends from Alberta who ranted on about all the grants and the freebies in the tax system for the oil companies to explore, while the taxpayers were paying 100 per cent. They moved off on
September 28, 1989

some of those, sensibly. There are many more corporate tax exemptions that ought not to be in existence.
Let me offer my friend one other suggestion. Why is it that our interest rates have to be so high? Why is it that our deficit and debt are jacked up every year because of our increased interest rates? It is Conservative interest rate policy, but it perplexes me that our rates have to be three or four percentage points higher than those in the United States. If we were to drop our interest rates just 2 per cent, we would cut from the deficit over $3 billion just like that.
I could go on to make some suggestions, but a minimum corporate tax is one suggestion, eliminating some of the corporate tax incentive programs is another, lowering interest rates is another suggestion, a more progressive income tax system in the personal side is another. Just as a starter, this indicates that there are many alternatives to increasing revenue through the tax system as opposed to simply imposing a punitive 9 per cent sales tax.


Gilles Loiselle: Mr. Speaker, I would like to make a couple of remarks. The Hon. Member for Kamloops referred to the mismanagement of the economy. I would like to recall that very recently, the World Economic Forum and the International Institute for Management Development indicated a significant improvement in Canada's international competitive position, with our ranking among the 23 major industrialized economies climbing to fourth position this year from sixth in 1987. For mismanagement, this is good management, I would say.
The hon. member referred briefly to the free trade agreement. Whenever we do something that more less looks like what the Americans have done, we are accused of imitating them. We are doing something that the Americans have not done. We are using a different system of taxation. This is something important. It is a modern way of doing it and we are doing it in way which is more generous.
The Hon. Member talked about his father. We were concerned about his father before he made his speech. We want to protect all the fathers of Canada by devising the most progressive credit system and package. This is
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to protect the people who need to be protected, to remove the regressive aspect which exists in the sales tax.
We have made this effort and I think you have to take into account the whole package and not only say we will be taxing everything. We will make sure that people are well protected because if we project the numbers you have given, with so many Canadians paying so much more, we would not have any deficit left next year. I would not mind that, but I do not think this is the way the world would unfold.


Mr. Deputy Speaker:: The period for questions and comments is over. On a point of order, the Hon. Member for Ottawa-Vanier.


Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, there have been consultations with representatives of all parties, and in an effort on a supply day like today to get as many speakers as possible on debate, I would like to move a motion that reads as follows:
That, notwithstanding any standing order of this House, that after
the third speaker during supply proceedings on September 28 and
October 2, all speakers be limited to a 10-minute speech followed by
a 5-minute question and comment period.


Mr. Deputy Speaker:: Could the Chair ask a question of the Hon. Member for Ottawa-Vanier? Would that mean that the Chair would rotate speakers? There would not be two in a row for each party like it was
yesterday?


Jean-Robert Gauthier: Indeed, Mr. Speaker. Instead of allocating one period of 20-minute speeches with 10 minutes of questions and comments, you would do the usual rotation after every speech of 10 minutes followed by five minutes of questions and comments.


Nelson Andrew Riis: Mr. Speaker, I want to concur that indeed, there have been discussions, and because we are dealing with a finite period of time, this will enable more members to comment on the motion before the House, and we certainly support that idea. I think it is a good opportunity to explore various ways of including more members in these important debates.


Albert Glen Cooper: Mr. Speaker, we have no problem with the motion as proposed by the Official Opposition. The only concern I would have is that the rotation would follow the normal party rotation.

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Mr. Deputy Speaker:: It would follow the normal party rotation on allotted days which is not the same, if there is such a thing as a rotation in this House, as it is on normal second reading.
The House has heard the terms of the motion proposed by the Hon. Member for Ottawa-Vanier. Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Mr. Robert D. Nault (Kenora-Rainy River):: Mr. Speaker, it gives me great pleasure today to rise on behalf of the constituents of Kenora-Rainy River and Canadians generally to explain what this particular government has done to our economy since its election in 1984 and its re-election in 1988.
This government has a record of mismanaging the economy in just a very few short years that is unprecedented in the history of this great nation of ours. This government's record, for lack of a better word, is tainted. Canadians have lost all confidence in the government's capability to manage the affairs of this country.
When the Conservatives took power in 1984-and we go back to this over and over again-Canada's national debt stood at $170 billion. Today our national debt stands at $340 billion. For members opposite who might have a hard time understanding this, that means that the national debt has doubled since 1984.
At a time when everyone has been asked to tighten their belts, the government has increased its expenditures. Where is the leadership in this? How can Canadians be expected to carry the burden of deficit reduction when their own government spends and spends and spends?
The Minister of Finance claims that his goods and services tax proposal is the be all and end all of tax reform. There are so many problems with this particular GST that it seems to me that the government's only alternative, and we say this very honestly, would be to scrap it and go back to the drawing board. The goods and services tax is nothing but a tax grab.
Canadians are fed up with tax increases. They are fed up with the burden imposed on them time and time again. Since this government took power, Canadians have seen tax increases no fewer than 30 times. I can
only say what Canadians have been saying in the press lately, "Don't you think enough is enough?"
Not only will the goods and services tax increase taxes. It is inflationary, and I believe higher interest rates will be the end result. The hidden nature of the goods and services tax means that Canadians will not know how much tax they are paying.
This government has promised that the GST would be visible. Well, as we have seen on numerous occasions, it is just another one of those broken promises. Canadians no longer trust anything this government says. As for integrity, the record speaks for itself.
To keep the GST hidden from Canadians is despicable. The government is telling Canadians, "Trust us." There is no trust in this government and there is no integrity in this government.
In the budget tabled earlier this year, the government chose to tax back seniors' pensions and family allowances. The Finance Minister said that everyone had to chip in and help reduce the deficit. Reducing the deficit on the backs of seniors and those less fortunate is ridiculous.
The Finance Minister said that he was not tampering with the universality of social programs. However, the Finance Committee chairman admitted in an interview with The Ottawa Citizen on Saturday, September 23, that the government's real agenda is to do away with universal social programs.
It is unbelievable that on one side they can say that it is not and on the other side they say that it is. It is really difficult to understand who is telling the truth in this regard. Coupled with the goods and services tax, the claw-back provision of old age security pensions and family allowances, means that seniors will have lost what little buying power they have left. Every purchase made will now be made more difficult. Their budgets, which are already stretched to the limit, will be considerably affected by the goods and services tax.
At a time in their lives when they should be enjoying their retirement years, seniors will now be faced with difficult financial decisions and increased burdens. Where is the fairness this government claims to profess? There is no fairness. This government could not care less about being fair.

The goods and services tax will severely restrict small businesses in northwestern Ontario that depend heavily on tourism. Increased administrative costs, increased taxes and the higher prices for services will kill this very volatile industry in my region. My riding sits on the Canada-U.S. border. Communities such as Rainy River, Emo, Stratton and Fort Frances depend on tourist dollars from the United States. Businesses located in these communities are already struggling to survive as people cross over to the U.S. to buy gas and grocery items. The goods and services tax will serve only to encourage my constituents to cross over to the U.S. in greater numbers.
The goods and services tax will not contribute to the economy of these municipalities and may very well throw them into an economic turmoil from which they may never recover. Jobs will be lost and, with reforms to the Unemployment Insurance Act, many will not be able to collect benefits and will therefore be forced down to the old welfare office.
Opposition to this goods and services tax is widespread. I believe this government has no option, except to scrap it entirely. Communities in my riding will not survive. In northwestern Ontario, we already pay astronomical prices for gas and transportation services by road and by air.
Fragile industries such as forestry and mining located in single-industry towns will crumble as a result of the goods and services tax on transportation services. Towns such as Ignace, already struggling to survive as a result of mine closures, will become nothing but ghost towns. There will be no jobs, no consumer purchases and therefore, no economic activity.
My constituents are vehemently opposed to the goods and services tax. Petitions are rolling in every day. Now that we know what the government's intentions are with respect to VIA Rail, my constituents realize that the only other mode of transportation left is by air. Many of my constituents are retired citizens. On their pensions, they cannot afford to travel by air. Even if they could, they would not spend that kind of money knowing their pensions are being taxed and that the goods and services tax will mean additional expenses.
The destruction of VIA Rail in northwestern Ontario will mean that many of my constituents will be housebound. Young couples who dream of owning a brand new home, single-parent families trying to make ends meet,
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seniors trying to enjoy their golden years are seeing then-dreams and aspirations destroyed by this government's so-called management of the Canadian economy. They have seen the destruction of universal programs, they have seen the destruction of Canada's passenger rail service and they are seeing the destruction of their future.
Canadians are skeptical of this government, and so they should be. Canadians no longer believe in this government and they know it cannot be trusted any longer. The government may think business is on its side. If the government would only take the time to listen to what business is saying about the goods and services tax, it would soon realize that the support is simply not there. Small business will be faced with an administrative nightmare, and will have to hire additional staff just to sort out the mounds of paper required to administer the GST. Grocery stores will be the hardest hit because they will be trying to figure out where the GST applies and where it does not. Then again, the finance committee chairman has said that the government is reconsidering the tax-free provision for basic groceries.
The goods and services tax has to go. The Canadian economy will not benefit from this tax and Canadians will suffer as a result. Opposition is growing day after day. The government has underestimated the Canadian people. Canadians understand what the goods and services' tax will mean to them and to the economy. Canadians realize that their purchasing power will be significantly reduced. They know that tough times are ahead if the GST goes through. As we always say on this side of the House, Tory times are tough times. Canadians are fed up with carrying the burden of taxation. They want to help reduce the deficit, but they do not want to do it alone. Canadians want to see responsible government.
The constituents of Kenora-Rainy River have spoken out. They have voiced their strong opposition to the reforms to the Unemployment Insurance Act, to the destruction of VIA Rail, to the claw-back provisions of old age security and family allowances and to the goods and services tax. My constituents have told me that the government must scrap the goods and services tax proposal and go back to the drawing board. I think it would be appropriate at this time, considering the fact that there are so many people who consider this a very important issue, that we on this side of the House would

like to propose a motion under Standing Order 26(1). I move:
That, the House continue to sit through the lunch hour for the
purpose of continuing consideration of the business of supply.
I do that, Mr. Speaker, with the hope that the other side will agree to this because I think it is a very important issue and all Canadians would like to hear from their Members of Parliament on this particular issue. I think it would be to our benefit to tighten the belts a little further and stay away from the parliamentary restaurant to speak on behalf of Canadians.


Albert Glen Cooper: Mr. Speaker, we are planning to object to this motion because we have had incidents in the last couple of days when we tried to offer some sort of co-operation to both sides and we have not been able able to get that co-operation. We do object to the motion and plan to oppose it.


Jean-Robert Gauthier: Mr. Speaker, just on that last comment, the opposition always tries to co-operate. I agree that the government sometimes does not like the debate, but debate is what runs this place and we would like to debate the question further.


Mr. Deputy Speaker:: The motion is that the House continue to sit through the lunch hour for the purpose of continuing consideration of the business of supply. The Chair does find the motion to be in order.
All those opposed to the motion will please rise.
And more than 15 members having risen:


Mr. Deputy Speaker:: I declare the motion lost.
It being one o'clock, I do now leave the chair until two o'clock.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.

Mr. Maurizio Bevilacqua (York North):: Mr. Speaker, the free trade deal has reached the town of Aurora in my federal riding of York North. Sterling Drug Limited recently announced that the drug manufacturing division of the plant will be phased out and 180 workers will lose their jobs as a result of the plant shut-down.
Right after the November 21 election the company closed a sterile product manufacturing division in the plant. Today 40 per cent of the plant will be transferred to the United States of America, 30 per cent to Puerto Rico and only 20 per cent will remain in Canada, simply because this 20 per cent of the products cannot be manufactured anywhere else.
The free trade deal has failed the residents of Aurora. The free trade deal has failed the constituents of the federal riding of York North. The free trade deal has failed Canadians.


THE PRESS
Mr. John Brewin (Victoria):: Mr. Speaker, Southam News today has reported that Peter Worthington, a journalist and sometime Conservative candidate, acted in 1968 as an informer for the Internal Security Division of the U.S. Department of Justice and for the FBI. This is confirmation not only of Mr. Worthington's lack of simple patriotism to Canada, but of the fact that the U.S. government was spying on Canadians who held different views from that of the U.S. government.
Two days ago Simon Reisman, head of Canada's negotiating team for the free trade deal, said he believed that the U.S. government was spying on the Canadian negotiating team.
Will the government first advise this House whether the government of Canada believes, on the basis of CSIS reports, that the U.S. government is continuing to spy on Canada? Will the government tell the American govern-
September 28, 1989

ment of our outrage at this behaviour? Third, will the Solicitor General make it clear to this House that the government has no intention of emulating this odious practice and sending Canadian spies out into the world to snoop on the friends of Canada?


ABORTION
Mr. Ross Belsher (Fraser Valley East):: Mr. Speaker, this week on Parliament Hill there are men and women from across Canada representing many walks of life to remind us that Canada is in need of a new abortion law. They are here to represent the unborn and have a deep love for their country and the province that they represent.
Among this vigilant group is a very special lady by the name of Helen Walsh from Nova Scotia. Mrs. Walsh has recently completed, in August of this year, a walk across this country which started in St. John's, Newfoundland, on Mother's Day, May 8, 1988. This journey totalled 7,700 kilometres.
Mrs. Walsh believes that human life is a gift given by God and that it is unique and special. She holds a concern for the mental, physical and spiritual well-being of both mother and child and believes that faith in our future can only be guaranteed by our witness to a respect for life, from the prebom to the aged.
Mr. Speaker, I commend Mrs. Walsh for her achievement.


DROUGHT PROGRAM
Mr. Bob Speller (Haldimand-Norfolk):: Mr. Speaker, the drought program has become a nightmare for producers. Townships and crops which are included change from month to month. Some farmers are even being told to return the interim payments that they received.
This government failed to listen to or understand the arguments put forward by producers and opposition members that the program was flawed, poorly designed and unfair.
I call upon this government to expand the parameters of the appeal process to allow appeals on an individual basis, reconsider its decision to recover any overpayments made in the initial drought payments, and expand
the program to include losses incurred in forage production in 1988.
The government has ruled that farmers producing red clover seed for commercial purposes will be excluded. Producers in my riding are compiling supportive data from independent sources to verify their claims.
I call upon this government to implement the changes I have outlined and give its assurance that red clover producers will be granted an appeal and given a very fair hearing.

1992 ELECTION


Mr. Brian L. Gardiner (Prince George-Bulkley Valley):: Mr. Speaker, in the April 3 Speech from the Throne the government announced plans to organize a major celebration in 1992.
When interviewed, a government official said they had no idea how a number of events in 1992 might be linked.
At a time when pensions are being clawed back, when VIA Rail is being slashed, and when taxpayers are being robbed, this government plans to spend a quarter of a million dollars on a conference in two weeks' time just to help organize the 1992 pre-election party.
The government should advise the House how many staff were involved in the 1992 project, what the theme will be, and how they can justify such an extravagance when ordinary Canadians are being asked to pay more and more every day.


THE ENVIRONMENT
Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, Canadians are told by the Prime Minister that his government is committed to environmentally sustainable development. His actions, unfortunately, contradict such declarations.
A close look at the budget of the environment department reveals that it is very low on the government totem pole. It receives less than 1 per cent of the federal budget and has lost over $50 million to inflation over the past five years. In spite of the fact that the Prime Minister talks of the urgent need for action on global warming, his energy minister continues to support tar sand megaprojects which will increase Canada's carbon dioxide pollution, add to global warming trends, and tie up billions of federal taxpayers' dollars. So far this

government's record on sustainable development consists of high ringing words which are actually hollow because they are not backed by actions.


ROUGE RIVER VALLEY
Mrs. Pauline Browes (Scarborough Centre):: Mr. Speaker, right now Premier David Peterson and his cabinet are considering a proposal which would ruin the last remaining wilderness area in metro Toronto, the Rouge River Valley. Thanks to a group of environmental organizations an Ontario cabinet document was recently made public which calls for the development of the Rouge River Valley.
The people of Scarborough are left asking one simple question. If the four municipalities that border the valley can unanimously support efforts to preserve the Rouge, if the Metro Toronto Conservation Authority can call for saving the Rouge, if the Royal Commission on the Future of Toronto Waterfront can call for saving the Rouge, if close to 50 organizations at the local, provincial and national level can call on saving the Rouge, if the federal government can pledge $10 million toward saving the Rouge, why can David Peterson and his government not take action to save the Rouge?


MEECH LAKE ACCORD
Mr. Brian Tobin (Humber-St. Barbe-Baie Verte):: Mr. Speaker, Newfoundlanders, and I suspect Canadians right across this country, over the last several weeks have been very disappointed to see representatives of the federal government attempting to resolve a matter as critical and pressing as the constitutional evolution of this country by using threats.
We have reports that an official of the federal government in an off the record briefing to the national press suggested that if the province of Newfoundland were to exercise its right as a province to express itself in a matter as important as the Constitution then that province may find itself subject to punishment by the national government.
Nobody has yet apologized to the province of Newfoundland for that kind of threat. The official in question still remains an employee of the federal government and still remains a spokesperson on behalf of the federal government.
To add insult to injury, the Prime Minister himself said yesterday "Wells is ungrateful of Confederation" because of his position on Meech Lake. Newfoundland is not a beggar at the table of Confederation. Newfoundland is a full partner in Confederation and Newfoundland stands solid behind the concept of Canada.
The constitutional question is a difficult one, but let us live together with respect and with dignity, and let us put away the hammers in a resolve to build this nation.


SKYLINK CRASH
James Ross Fulton: Mr. Speaker, I wish to apprise the House of extremely serious allegations made to me since the Skylink crash in Terrace. I believe there is no option but to pull the operating certificate, initiate a full audit and advise the public that the Dryden inquiry will move as soon as possible to investigate the Terrace crash which killed all seven aboard.
The pilot killed in the crash was time expired. This voids the insurance of the aircraft and the flight. The chief pilot, the brother of the deceased, has now resigned along with the majority of the 402 pilots due to safety concerns. The owner Mr. Raphael Zur, I am advised, has been signing the log books in the place of unqualified pilots. Pilots are flying certain aircraft without proper qualifications. Aircraft are not being properly maintained. Of the three recent gear collapses none of the aircraft have had their engines removed as required.
A 402 recently had to glide into Vancouver International Airport to land due to the failure of the fuel selectors which were installed backward. Pilots have been ordered to fly aircraft after reporting problems to head office. MOT inspectors located a rusted through engine mount on a Metro 2 and yet all three are still in the air without the required engine removal.

A pilot contacted me today and advised me that Mr. Raphael Zur has on several occasions stolen his aircraft for use. The flying public is at risk. On maintenance, on safety, on aviation violations, on Criminal Code matters, falsified logs and lack of insurance the list is long. The Diyden inquiry must take on the Skylink crash.


INDIAN AFFAIRS
Mr. Ken Hughes (Macleod):: Mr. Speaker, in Canada today for largely historical reasons there exists a special relationship between aboriginal peoples and the Government of Canada. Within that context it is not surprising that disagreements might arise. Disputes surface in any aspect of human activity. The challenge of leadership is not just to represent your own interests; it is also to know when and how to put disputes to rest.
Earlier this week near Calgary a lengthy dispute between the Sarcee people and the Department of National Defence was resolved. On behalf of all members of the House, who I am sure would wish to join me in this sentiment, I commend the leadership shown by Chief Roy Whitney, the Hon. Bill McKnight, their representatives, and mediator Harold Millican. Their efforts have closed a difficult chapter in relations between CFB Calgary and the Sarcee people. A chapter of renewed trust, hope and commitment has opened.


ARMENIA
Mr. Jim Peterson (Willowdale):: Mr. Speaker, for the last several months the world has watched as the people of Karabagh and Armenia have struggled to rebuild after the devastation of last December's earthquake. However, over the last several months this rebuilding has been totally frustrated. Azerbaijan has blocked access for all materials and supplies into the earthquake region.
I with others urge the Canadian government to bring this desperate situation to the attention of both the Soviet authorities and to the General Assembly of the United Nations. We ask the Soviets to lift the blockade of Armenia and Karabagh, to ensure the security of the Armenian people in that region, and to hold a referendum in the mountainous Karabagh to determine the majority will in that autonomous region.
Surely the people of Karabagh and Armenia have suffered enough.


CHRISTMAS TREE PRODUCERS ASSOCIATION
Mr. Peter L. McCreath (South Shore):: Mr. Speaker, the Christmas Tree Producers Association of Lunenburg County will hold their twenty-third annual conference this year at Bridgewater. Collectively, through professionalism, research and hard work, they produce the finest Christmas trees in the world. Every year they export a million and a quarter of these trees bringing millions of dollars to Canadians.
Real Christmas trees are a renewable resource, they are environmentally friendly and they are beautiful. Mr. Speaker, there are only 72 shopping days left before Christmas. This year I urge all Canadians who celebrate Christmas to use real Christmas trees, and none are finer and none are more beautiful than the Christmas trees from Queens and Lunenburg Counties in Nova Scotia.


CAMBODIA
Mrs. Marie Gibeau (Bourassa):: Mr. Speaker, not long ago, the Vietnamese government announced it would be withdrawing the rest of its troops from Cambodia between September 21 and 26. It also invited foreign observers, including Canadian officials, to watch the operation. Although the withdrawal of the military is heart-warming, we think the Vietnamese authorities can do a lot more to urge Cambodia to agree come to a compromise during this peace process.
Canada's position on observation or peace-keeping missions in Cambodia is well-known. For us to consider taking part in such a mission, all parties involved would have first to arrive at a complete and satisfactory settlement of the problems in Cambodia; our participation must not overly burden Canadian resources and our mandate must be clear and limited in time.
However, Mr. Speaker, since these requirements have not been met, Canada has not seen fit to send an observer.

Oral Questions
We are glad to see that Vietnam has taken steps to withdraw all of its troops from Cambodia and we do hope that this decision will bring us closer to a well-deserved and sustainable peace in Cambodia.


NATIONAL TRANSPORTATION POLICY
Mr. Greg Thompson (Carleton-Charlotte):: Mr. Speaker, successive governments have stumbled and bumbled their way through office by neglecting a need for a national transportation policy. The challenge is clearly out there for the minister and the government. The Canadian people can accept restraint but they cannot and will not accept a minister and a government which slash services yet offer nothing in the way of a strategy for the future.
Today we do not have a national policy that will propel Canada into the 21st century. Instead we have a disjointed scheme from which we will stumble out of the 20th century. The challenge is clearly up to the minister and this government. If they can meet that challenge and exceed it, they will truly have earned the support of the Canadian people.


CANADA-U.S. FREE TRADE AGREEMENT
Mr. Stan Wilbee (Delta):: Mr. Speaker, the free trade agreement has had a tremendously positive effect on the economy of British Columbia, and my riding of Delta is no exception. Regency Industries is the largest manufacturer of free-standing wood stoves in western Canada and is exporting over 80 per cent of its products, primarily to the U.S. market. Regency has annual sales over $10 million and is predicting a sales increase of 50 per cent over 1988, thanks to the focus on U.S. market potential generated by free trade.
This innovative company is also planning for the future, spending 3 per cent to 4 per cent of revenues on research and development. Exports have already started to Korea and Japan as Regency buys Japanese steel and then ships the finished product back to Japan.
All of Regency's products are approved by the U.S. Environmental Protection Agency, making these stoves an environmentally friendly product with tremendous growth potential.
This government knew that given the freedom to do so Canadian firms could compete successfully in the world economy. In the export dependent economy of British Columbia no one is proving this adage better than Regency Industries, and I am proud to have that company in my constituency.



ORAL QUESTION PERIOD


John Napier Turner: Mr. Speaker, I have a question for the Prime Minister. Six and a half million passengers travel more than two billion kilometres a year on VIA Rail, and yet this government is destroying VIA Rail.
I have learned that the government has plans to issue nearly 3,000 pink slips, that is 3,000 lay-off notices, to employees of VIA Rail in the two weeks following Thanksgiving.
At the priorities and planning committee of cabinet on Tuesday the Prime Minister approved a plan to lay off more than 70 per cent of the VIA employees in New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland. VIA operations, particularly in New Brunswick and Nova Scotia, will be devastated.
The Prime Minister told the people of New Brunswick and Nova Scotia that they had to use it or lose it. They are using it. Why are they losing it?


Hon. Benoit Bouchard (Minister of Transport):: Mr. Speaker, I think I should repeat what I said yesterday. The Leader of the Opposition always uses documents that are not official. The Leader of the Opposition has decided on the process of the government. Unfortunately, I must repeat to the Leader of the Opposition that we are in the process of making the decision and in due course we will make the announcement.


John Napier Turner: Mr. Speaker, did you notice that the Minister did not deny what I suggested to the House? We noticed that very clearly.
I want to just point out one illustration of how irresponsible, calculated, brutal and vicious this government's actions are. Last year in advance of the election the Prime Minister authorized Stewart Mclnnes, who was then the Minister of Public Works, to open a brand new VIA maintenance centre at Halifax at a cost of more than $7 million. Two days ago the Prime Minister

approved a plan to close that brand new maintenance facility in Halifax which cost the taxpayers more than $7 million and employed 150 people. How is that, Mr. Speaker, for pure unadulterated, rank cynicism?
I ask the Prime Minister how much longer he is going to squander the public trust on this particular issue.


Benoît Bouchard: Mr. Speaker, of course the Leader of the Opposition can try to mislead Canadians in any way he wishes and say anything he wants.
He can claim that decisions have been made. He can comment on documents that don't exist, without a shred of evidence.
However, I would ask the Leader of the Opposition to be professional about this and to be accurate when referring to official documents about decisions that have been made.
Until those decisions are announced, I would ask him to have the decency to argue on the basis of information that is true, not false.


John Napier Turner: Mr. Speaker, I agree the decisions have not been announced but they have been made.
I see his colleague, the other "Bouchard", the Minister of the Environment, who didn't have the courage to demand that his colleague order a study-


Mr. Speaker:: I know the right hon. gentleman would not want to proceed in an unparliamentary manner, and I would ask him to continue his question keeping that in mind.


John Napier Turner: Mr. Speaker, why didn't the Minister of the Environment insist that his cabinet colleague from the same part of Quebec order an environmental impact study of the decisions regarding VIA Rail? Because neither the Prime Minister nor the Minister of the Environment have the decency to keep their election promises.
Oral Questions
In any case, will the Prime Minister confirm that last Tbesday he personally approved a lay-off plan for 1,000 VIA Rail employees in Montreal?


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, I can say that the statement made by the Leader of the Opposition is false.


Mr. David Berger (Saint-Henri-Westmount):: Mr. Speaker, my question is also directed to the Minister of Transport.
At our public hearings in Quebec on the future of VIA Rail, those who spoke at these hearings all stressed how important it was to have an improved and viable railway service, the operative words being "improved" and "viable".
Will the Minister agree to meet the members of the consultation group set up by the Government of Quebec to examine future prospects instead of laying off thousands of Quebeckers, in Montreal and across the province? Why this negative attitude to VIA Rail?


Benoît Bouchard: Mr. Speaker, I would like to welcome the new federal Member from Quebec, and I may say I am pleased the Hon. Member held these hearings. I wonder whether, in the process, he also asked Canadians whether they were prepared pay up to $650 million for a service that is being used by only 3 per cent of Canadians, in Quebec and in the rest of Canada. I think Canadians want sound management of public funds, and that is what we intend to give them, Mr. Speaker.


Mr. Ron MacDonald (Dartmouth):: Mr. Speaker, in Atlantic Canada alone VIA cuts will kill 500 jobs. A new $7.2 million maintenance facility in Halifax will see its doors closed permanently and thousands of Atlantic Canadians will see the severing of this vital transportation link. Our region has suffered enough under this government's knife.
Will the Prime Minister finally show some compassion and common sense and stop this latest brutal, bloody assault on the people of Atlantic Canada?


Benoît Bouchard: Mr. Speaker, I will ask this member, as I did all other members, to wait for the official announcement.


Iain Francis Angus: Mr. Speaker, I have a question for the Right Hon. Prime Minister.

Oral Questions
His Minister of Transport in an answer to the Leader of the Opposition said: "He should not base his decision on false affirmations."
The Minister of Transport has been using, much like the rest of the government, erroneous figures to justify the actions that the government is taking. He consistently cites 3 per cent as the number of Canadians who are using rail passenger services. Some 30 per cent to 50 per cent of the users of public carriage, either rail or airplane, is the real figure.
Given that kind of information and given the information that ridership is up, that more people are using VTA Rail, that revenue is up, and that the users are paying for more of the operation, would the Prime Minister not recognize the mistake that his government has made and indicate to this House clearly, and to the people of Canada, that the government will change its mind and will keep VIA rolling?


Benoît Bouchard: Mr. Speaker, obviously, those produced by my colleague from the New Democratic Party do not necessarily correspond to the figures that we produced in the Government. I would just point out to him that as far as figures are concerned, Canadian voters twice preferred the Conservatives' figures to the New Democrats'.


Iain Francis Angus: Mr. Speaker, my question again is for the Prime Minister. He will know that hundreds of thousands of Canadians have been writing to him and to the Minister of Transport and, in spite of the attempts of the government House leader to circumvent the rule of this House allowing members to send material to the Prime Minister, he has today received hundreds of cards and will receive thousands more during the course of the day from people in support of VTA Rail.
Given that rail passenger service is the safest method of travel and the most environmentally sound method of travel in this country, would he not agree to send the Minister of Transport back to the drawing board to come up with a plan that will allow VTA Rail to continue and to be improved?


Benoît Bouchard: Mr. Speaker, I just want to repeat what I said before. The VIA Rail plan which will be proposed will be proposed with regard to the capacity we have to interface this transportation mode with the way people use VIA Rail. People use VIA Rail by 3 per cent, of all intercity travellers use VIA Rail by 3 per cent.
I believe that we will continue to put more than $2 billion over five years in VIA Rail and I believe that is exactly what Canadians can afford at the present time.


Mr. Bill Blaikie (Winnipeg TVanscona):: Mr. Speaker, poll after poll has indicated that Canadians are willing to support government expenditures that are environmentally sound. I ask the Prime Minister and the Minister of Transport whether they do not realize that this decision about VIA is a major economic decision.
They attend international conferences concerned with hydrocarbons, the greenhouse effect, low level ozone, you name it; and yet here they have a major economic decision which they have not subjected to an environmental assessment. If they did they would find that the environmentally sound thing to do would be to modernize and expand passenger rail service in this country.
Why in the hell can we not have an environmental assessment? Why can the Prime Minister not put his money where his mouth is when it comes to the environment, or shut up about it forever?


Benoît Bouchard: Mr. Speaker, I know that this member is worried about the environment, but we can be worried about the environment calmly. I believe that the member should know that the announcement on VIA Rail has not been made yet. When the announcement on VIA Rail is made different parts of the announcement will deal with different concerns. I believe that he should wait for the announcement before giving that kind of performance.


Brian Vincent Tobin: Mr. Speaker, my question is for the Prime Minister. According to a column written by the Prime Minister's good friend and until very recently senior adviser, Dalton Camp, on September 17, the decision to gut VIA Rail was made in Langevin Block by the estimates review committee chaired by the Prime Minister. I quote: "Benoit Bouchard may still be Minister of Transport but
September 28, 1989

he had no voice in the basic and critical consideration of national transportation policy."
Given that the Minister of Transport cannot possibly have in these circumstances any credibility on this matter, why is the Prime Minister, who chaired the committee that made this decision, refusing to stand in the House and defend these cuts for which the Prime Minister bears primary responsibility?


Martin Brian Mulroney: Mr. Speaker, I have not read the column to which my hon. friend referred-


Mr. Lapierre:: I'll send you a copy.


Martin Brian Mulroney: The member will send me a copy, I would thank him for that. I have not read the article to which he refers, but I can tell my hon. friend something that is certainly clear to all members of the government and to most Canadians. The present Minister of Transport is widely regarded as a strong and very effective performer here and across the country.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: In fact, Mr. Speaker, while I haven't read that column, I have read this, and it deals with-


Jean-C. Lapierre: Who wrote it?


Martin Brian Mulroney: Well, I'll tell you. It is in the Sherbrooke Record of July 18, 1988-


Some Hon. Members:: 1988!


Martin Brian Mulroney: July '88-


Some Hon. Members:: Oh, oh!


Martin Brian Mulroney: Oh, they want me to keep reading! Let me keep reading then, Mr. Speaker. It is a statement by the Liberal candidate in Sherbrooke, Mr. Wood, who says this in respect to the Conservative candidate, "He brought back the train. Big deal", he says. "Take it away. Nobody is ever on the train. It's always empty," said the Liberal candidate in Sherbrooke.


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


Mr. Speaker:: The hon. member has the floor.
Oral Questions


Brian Vincent Tobin: Mr. Speaker, the Prime Minister's endorsement of his Minister of Transport sounds very much like a general's endorsement of the troops before he sends them into the slaughter.
I want to ask the Prime Minister whether or not he agrees with Mr. Camp, his former senior policy adviser, when he says of the decision to gut VIA Rail, "It is a decision that discriminates against the less affluent, the old, the young, the unemployed, the small towns".
Does the Prime Minister agree with his former senior adviser's assessment of this brutal decision? Perhaps this describes the mysterious departure of Mr. Camp from the Langevin Building. Even he has an ounce of salt blood left in his veins and couldn't see his region sold out by this Prime Minister.


Benoît Bouchard: Mr. Speaker, I would like to be very clear about-


Brian Vincent Tobin: You weren't even there!


Some Hon. Members:: Hear, hear!


Benoît Bouchard: Mr. Speaker, I was not there but I am here.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: I should remind both the hon. member and the minister that I am here.


Some Hon. Members:: Hear, hear!


Benoît Bouchard: Mr. Speaker, I want to be clear. Seriously, the newspaper Le Devoir decision about the cuts to VIA Rail. I believe when a decision is good, is honourable for Canada, and for the Minister of Finance, it is good also for the Minister of Transport.


FINANCE
Mr. Douglas Young (Gloucester):: Mr. Speaker, the Minister of Finance told us last night that the goods and services tax would remain steady until 1994, barring unforeseen circumstances.
Mr. Speaker, we have just discussed VIA Rail and certainly that is an example of unforeseen circumstances because last fall, certainly no one expected the disaster that would hit the whole rail system in Canada, especial-

Oral Questions
ly VIA Rail. My question to the Minister, Mr. Speaker, is this:
Can he explain to Canadians exactly what he means when he talks about unforeseen circumstances in the context of his goods and services tax in Canada?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, I responded to a question yesterday which asked me about the to the GST. I said that we had put in place, in the last budget, a fiscal track, a fiscal framework that provides for a continuation of program spending at somewhat less than the rate of inflation, a continuation of the revenue picture as it is in place now, including the proposed GST. I said that if we continue in this direction, barring unforeseen circumstances, we will reach the deficit position that is outlined in the budget which involves also a zero cash requirement.


M. Douglas Young: We spoke earlier this week about "wage and price moderation", now it is "unforeseen circumstances". I think Canadians have a right to be more informed on that. I would ask the Minister of Finance this. With high interest rates, high unemployment, high inflation, would recession be an unforeseen circumstance? Would the Minister of Finance try to be very clear on what he means?
First of all, he is talking about 1994 and a tax that has not been imposed yet. Can he clear up the confusion for Canadians as to what he means by unforeseen circumstances?


Michael Holcombe Wilson: Mr. Speaker, we have seen over the course of the last few years a number of matters that have happened that had not been anticipated. I think the hon. member would regard as being an unforeseen circumstance the drought in agriculture.
If there is a recession internationally, then that is something that is unforeseen at this time. We have set out what our economic assumptions are in which we base this track. If there is a major deviation from that, then clearly that is an unforeseen circumstance.
As indicated last year at the time of the election, we still do not know what the outlook is for interest rates at any one time. We make assumptions on that, but if there is a major deviation in interest rates either domestically or internationally from the track, then that is something
unforeseen. There are a number of these things that come into play.


Mr. Lome Nystrom (Yorkton-Melville):: My question is also for the Minister of Finance, Mr. Speaker. We know that officials in the minister's department are now looking at various options, various scenarios to reduce the rate of the tax and include food as a taxable item in the GST.
We also know that his buddies on Bay Street are making the same recommendations to the minister and to his officials. This is causing a lot of worry and concern among ordinary Canadians, in particular the senior citizens who built this country, and the poor.
I would like to give the minister one more chance to say in a very categorical way, in an ironclad way, that there will be no tax on basic groceries. Will he say no to his officials, no to his Bay Street buddies, and tell the people of this country that there be no tax on food?


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: Mr. Speaker, let us be quite clear about the reference that the hon. member was referring to. This is not a finance proposal. This is the Department of Finance officials responding to a request for information from members of the research staff of the Finance Committee. They have to respond to these requests, as they would respond to the hon. member if he asked for information. That is the sole basis on which that information is provided.


Lorne Edmund Nystrom: Mr. Speaker, we have now heard a classic example of the minister evading the question.
What I want from this minister is an ironclad assurance groceries in this country. I ask that in view of the fact that one of his buddies, Laurent Thibeault, came to our committee this morning from the Canadian Manufacturers' Association to complain that there would be a 9 per cent sales tax on power lunches of caviare and champagne-and he wants an exemption. Can the minister assure us that he will not listen to Mr. Thibeault and, instead, assure the ordinary people of this country that there be no tax on basic food?


Michael Holcombe Wilson: Mr. Speaker, I made this statement the other day and I will make it again. I am not going to be commenting on individual recom-

mendations that are made by this person or that person before the finance committee. There have been-


Lorne Edmund Nystrom: -no guarantees.


Michael Holcombe Wilson: If the hon. member would listen, Mr. Speaker. There have been recommendations from people who have come before the finance committee to tax food. Others have said keep the exemption in place.
The position of the government, as set out in the proposal that is before the committee now, is that basic groceries are tax-free. We will continue this position. The hon. member can ask me again and again and again, but I will not comment on specific items, specific recommendations that are put before the finance committee until the finance committee has made their recommendations final.


Mr.   Brian@: Mr. Speaker, my question is for the Minister of Finance. I want to ask the minister for a clarification on the impact of the GST on our senior citizens.
There was a lot of information in the riding of Elk Island and, indeed, across this country regarding the impact of the GST on our seniors. Some of this information good, some of it is misleading, but all of it is very confusing. Let us clarify this issue once and for all.
Mr. Minister, what will be the impact of the GST on our senior citizens?


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: Mr. Speaker, I think as colleagues understand the change from the existing federal sales tax to the goods and services tax is a major step forward in the impact of sales taxes on our senior citizens. Sales taxes have been widely regarded as regressive, but with the change from the federal sales tax to the goods and services tax we will have for the first time a progressive sales tax system because of the implementation of a very substantially increased goods and services tax credit.
In addition to that, we have exempted a number of other things in the GST tax proposals, such as medical devices. That includes hearings aids as well as glasses, health care, prescription benefits-


Sheila Maureen Copps: What about protheses?
Oral Questions


Michael Holcombe Wilson: -protheses, homemakers' services that are provided by non-profit institutions, meals-on-wheels, and a wide range of things like that. That is why the goods and services tax system as a whole is very good for our senior citizens.


Godfrey Stanley (Stan) Wilbee: Mr. Speaker, recently our government announced the release of the drug AZT for the treatment of AIDS. I understand that there has been a recent development. I was wondering if our Minister of Health could tell us what the most recent developments are in the treatment of AIDS in Canada.


Hon. Perrin Beatty (Minister of National Health and Welfare):: Mr. Speaker, I am pleased to be able to inform the House today that DDI will be available under the Emergency Drug Release Program. It will be available to Canadians who are symptomatic of AIDS and HIV infection and who are intolerant of AZT. It will be available free of charge under a program administered by the manufacturer.


Some Hon. Members:: Hear, hear!


UNEMPLOYMENT INSURANCE
Hon. Warren Allmand (Notre-Dame-de-Grace):: Mr. Speaker, my question is for the Minister of Justice. During the public hearings on the unemployment insurance bill which end today, serious doubt has been raised with respect to the constitutionality of this bill, in view of the fact that the bill provides that up to 15 per cent of unemployment insurance moneys can be used for training and development purposes.
The minister knows that federal jurisdiction in unemployment insurance is the result of a constitutional amendment in 1940, which very specifically refers to unemployment insurance and not to training and development.
In order to clear the air on this point, would the minister order an independent legal opinion, make a commitment to this House to make that opinion public, and ask the government to delay this bill until this constitutional issue has been resolved?


Douglas Grinslade Lewis: Mr. Speaker, the bill was, naturally,

September 28, 1989
Oral Questions
reviewed by justice officials prior to introduction. We take the position that the act is constitutional and is within federal powers.


William Warren Allmand: Mr. Speaker, that is unfortunate. I guess we will have to pursue that issue ourselves.
I have a supplementary question for the Prime Minister. It concerns the area of federal-provincial relations.
Another major issue being raised in the committee by many, many witnesses is the shift of the unemployed from the unemployment insurance system to provincial welfare rolls. As a result of this bill, thousands of unemployed Canadians will be left without unemployment insurance and the responsibility will be shifted to the social assistance systems.
In Toronto, the estimated increase in the welfare budget is $10 million. In the regional municipality of Ottawa, the estimated increase in the welfare budget is $10 million. In Sudbury it is $2 million.
I want to ask the Prime Minister if he would meet with the provincial premiers in order to get an exact estimate on how this bill will increase provincial welfare budgets. Would he delay the bill until he has those estimates, discussed them and put them before the House?


Hon. Monique Vezina (Minister of State (Employment and Immigration) and Minister of State (Seniors)):: Mr. Speaker, I want to repeat that the unemployment insurance system will not be cut back; what we want to do as a government is to improve it, make it more efficient and more equitable.
As far as social assistance is concerned, we already have a joint program with Quebec and as part of unemployment insurance reform, we already provided additional funds to be shared between the provincial and federal governments. Measures have already been taken to create more jobs by training the workers needed for new requirements.


FISHERIES
Mrs. Coline Campbell (South West Nova):: Mr. Speaker, my question is for the Prime Minister. By the end of
this month, tomorrow or Monday, the Hache Thsk Force on the Scotia-Fundy is expected to submit its report to the cabinet committee which he set up to examine the current crisis in the Atlantic ground fishery. Virtually every witness who has appeared before this committee, including the Nova Scotia Department of Fisheries, has complained that the groundfish management system, "-has focused on establishing, allocating and enforcing quotas but not on the managing of the fishery".
Will the Prime Minister ensure and order immediate direction to the cabinet committee to look at the Hache report to formulate proposals that will relieve the hardship currently being experienced by the thousands of people who are connected to the inshore fishery and the Scotia-Fundy region?


Some Hon. Members:: Hear, hear!
Hon. Thomas Siddon (Minister of Fisheries and
Oceans): Mr. Speaker, I can assure the hon. member that I am seriously considering the findings of the study of the special task force conducted by Jean Hache. In fact, I received a full briefing on his report only yesterday.
We have had a number of very positive recommendations from the fishermen in the area on improving science and the quality of data we receive from fishermen as an input to our management process, and the changes of gear which were necessary; but, above all, the importance of dealing with a huge over-capacity problem in southwest Nova Scotia. I will be taking recommendations to cabinet to deal with that in due course.


Coline M. Campbell: Mr. Speaker, the cabinet committee was set up by the Prime Minister to study the total. It was taken out of the hands of the Minister of Fisheries. I am asking that immediate attention be given to the Hache report.
My supplementary is to the Minister. I want to ask him whether the hardships that his policies have inflicted over the past two summers of no work for the people- the thousands of people in the inshore fishery-and whether the evidence of the Hache report has finally convinced him that his management plan, as the Department of Fisheries of the Province of Nova Scotia has said, has focused on the wrong areas and not focused on the managing of the fisheries on the east coast. It shows up in the northern cod, on which the cabinet committee
September 28, 1989

is meeting, and also on other policies of this particular committee.


Mr. Siddon:: In fact, Mr. Speaker, the Hache findings suggest possible new regulations and changes in fishing methods which would involve tighter control by the Department of Fisheries and Oceans. Secondly, on my first review of the report, it appears that in the present year there are no extraordinary circumstances of hardship which are unlike those of previous years with the exception of lower prices and the problems created by exchange rates. There are no areas of unemployment which cannot be accommodated, Mr. Speaker, within the existing programs that are provided by the federal government.


UNEMPLOYMENT INSURANCE
Ms. Joy Langan (Mission-Coquitlam):: Mr. Speaker, since last April the government has been telling Canadians that not many people would be hurt by the unemployment insurance cuts. They said only 30,000 people would be unable to obtain benefits. Statistics Canada has contradicted the government. It says that 130,000 people will lose all of their benefits. Thirty times more people will be hit in Newfoundland alone than the government has admitted to.
My question is for the Prime Minister. Would the Prime Minister confirm that by Statistics Canada's own analysis there will be 130,000 Canadians who will lose all their benefits? Would he also confirm that his government's own stats have been a dramatic understatement?


Monique Vézina: Mr. Speaker, I am pleased to tell my colleague that since our Government took office, we have created 1,500,000 jobs, including 878,000 for women. I repeat that what we are trying to do with unemployment insurance reform is to make this system fair and equitable by taking account of regional disparities.
I come from a region that is affected by unemployment and we have implemented a measure that will respect the worker who wants to work.
Oral Questions


Joy Langan: Mr. Speaker, I think I will have to try and address my supplementary question to the minister. She is not answering the question. She knows that Statistics Canada did not make up those figures. She knows those numbers are right, but that her department has not had the guts to release how the numbers are being cooked up.
Is the minister telling us that she was really not aware of the horrible impact these measures would have? Was she aware of them and did the government still allow incorrect numbers to be released?

Mrs. Vezina Mr. Speaker, I personally was responsible for the Department that oversees Statistics Canada and I have confidence in Statistics Canada's data.
I also know that the data I just quoted you truly reflect the job creation situation. The unemployment insurance program will continue to be a safety net for the working man or woman seeking employment. And what we are trying to do as a responsible government is to ensure that most Canadians will be able to find work in the new markets of the year 2000. We are preparing the future.


NATIONAL TRANSPORTATION POLICY
Gregory Francis Thompson: Mr. Speaker, my question is for the Minister of Transport. It is a given that cuts are going to be made to VIA Rail. Keeping that in mind, Mr. Speaker, what indication can the minister give this House that both he and the government will be bringing forward a national transportation policy that will lead Canada into the 21st century?
Also, Mr. Speaker, aside from debt reduction, I want to know what innovative measures does the minister envisage to propel us into the 21st century? Will we have a national transportation policy to address the real needs of this nation?


Benoît Bouchard: Mr. Speaker, I thank my friend for the question. I think there are two very important points here. The first is that, of course, the reason why we have to intervene with VIA

Oral Questions
Rail is because we cannot any longer waste Canadian money as we did for such a long time.
Second, I believe one thing we have to determine in the transportation policy is to have better management of the rail system. When we move in that direction and it is done, Mr. Speaker, I believe then will be the time also to determine a broader perspective in terms of transportation in Canada.


JUSTICE
Mr. John Nunziata (York South-Weston):: Mr. Speaker, we now know of a major source of foreign investment in Canada, illegal drug money from the United States. A confidential report released in Washington yesterday confirms what we predicted two years ago. Canada has become a major haven for laundering hundreds of millions of dollars a year in dirty drug money.
My question is to the Prime Minister. If his government is truly serious about fighting the drug war, will his government immediately introduce legislation to require Canadian banks and institutions to report large cash and foreign currency transactions as a means of stopping the laundering of illegal drug money in Canada?


Gilles Loiselle: Mr. Speaker, I would like to commend the Hon. Member for raising an issue which has to be of great concern to all the members of this House. As he knows, it is of great concern to this government, and we have already acted.
I would like to remind the hon. gentleman that effective January 1,1989, we brought amendments to the Canada Criminal Code and the Food and Drugs Act which made money laundering in Canada a criminal offence.
At the Toronto economic summit in 1988 Canada played a prominent role in achieving agreement on a set of principles and initiatives which will result in greater co-operation. Even last week my colleague, the Minister of Finance, raised the issue at the summit.
With our American neighbours we have made arrangements for mutual legal assistance. The Office of the Superintendent of Financial Institutions has instructed all banks to institute procedures to detect money laundering. I could go on for a long time. I think we have taken very decisive action.


Some Hon. Members:: Hear, hear!


Gilles Loiselle: I assure the Hon. Member the report was based on data which is not relevant any more.


Mr. Derek Lee (Scarborough-Rouge River):: Mr. Speaker, my question is also to the Solicitor General. TTie last response did not show any mechanisms developed and being used by banks.
In view of the government's failure to date to impose mechanisms to track profits of the international drug cartel through our Canadian financial institutions, I want to know when the government is going to show some leadership, stop dragging its feet and offer to us a comprehensive and effective Canadian initiative in the war against drugs. Or do we have to wait for the FBI or the Drug Enforcement Administration to show us how?


Gilles Loiselle: Mr. Speaker, I would like to reassure the Hon. Member that we do not need to wait for anybody. At this very moment the banks, with the office of the Superintendent of Financial Institutions and the RCMP, are working on very precise measures to modernize our methods. We are very confident that we can tackle that.


WESTINGHOUSE CANADA
Mr. Len Hopkins (Renfrew-Nipissing-Pembroke):: Mr. Speaker, I have a question for the Minister of Supply and Services. On May 24, Westinghouse Canada announced the closure of its Renfrew, Ontario plant. At that time we were told that with the exception of some specific equipment, the rest of the equipment would remain in the plant until the end of the year to allow it to be sold as a going concern.
However, those Westinghouse officials have gone back on their word during the summer. As a result we have lost one potential buyer because equipment was not available with the plant. We do not want to lose another one.
Is there any recourse the Minister has with regard to the procurement of goods and services from Westinghouse, given the current Westinghouse withdrawal from Renfrew and, more particularly, the manner in which they are doing so?
September 28, 1989


Hon. Paul Dick (Minister of Supply and Services):: Mr. Speaker, although it is regrettable that Westinghouse has not been able to remain in the slow growth region of Renfrew, and after nine years and some $10 million of federal government money, has indicated its pullback to its Westinghouse plant in Hamilton, I must inform the hon. member that there is no precise remedy which the Minister of Supply and Services can implement to punish them for their action. I would hope that they would certainly negotiate in good faith with upcoming potential purchasers of this facility, and that they would leave their equipment in place as they promised they would do.


Leonard Donald Hopkins: Mr. Speaker, my question is for the Minister of Industry, Science and Technology. Given the several millions of dollars in federal grants, training programs and tax credits that the Minister of Supply and Services mentioned that have gone into the plant over the past nine years, and because much of this was done in the name of regional development, in a sincere way, does the minister not agree, both morally and realistically, that this government-subsidized equipment should be available to a prospective buyer who will remain in the Renfrew area so that the benefits that were meant for this slow growth region will in fact remain in that area and be of benefit to hundreds of people as intended in the first place?


Hon. Tom Hockin (Minister of State (Small Businesses and Tourism)):: Mr. Speaker, the hon. member gave me notice of his question. I am informed that the company has fulfilled its obligations to the Department of Industry, Science and Technology. I will be glad to check into it further, however, to guarantee that that is the case.
I will tell the hon. member that the 147 employees have been offered a comprehensive adjustment package which includes offers of jobs, offers of job placement. It is a very comprehensive program. In terms of the equipment, I will confirm that they have in fact fulfilled their obligations.


Mr. Speaker:: The member for Mackenzie, and this will be the last question and supplemental.
Oral Questions DROUGHT PROGRAM


Victor Fredrich (Vic) Althouse: Mr. Speaker, my question is for the Minister of Agriculture. Prior to the drought cheques being mailed out this summer, the minister and his officials repeatedly assured producers of commercial forage seeds, the grasses, clovers and alfalfas, that they would be receiving drought payments. When the cheques came the commercial producers were dropped from the program and only producers of pedigreed seed were left in.
Will the minister explain why commercial producers were not paid on either the same basis as the pedigreed producers, on the basis of the quota book acreage, or even using a basket-of-commodity approach which was built into the program? Why were the producers of commercial grasses, clovers and alfalfas left out of the drought program even though they were badly affected?


Hon. Don Mazankowski (Deputy Prime Minister, President of the Privy Council and Minister of Agriculture):: Mr. Speaker, my understanding is that this would have been very difficult to administer. My colleague, the Minister of State for Grains and Oilseeds, has been directly involved in this particular issue. That is my understanding, but I will consult with him and get a fuller answer for the member and report back to him as soon as I can.
I would suspect, as well, that this would be a matter that would be dealt with through the appeal process which will be undertaken in the next little while.


Victor Fredrich (Vic) Althouse: Mr. Speaker, my supplementary is for the Minister of the Environment who monitors all government programs to make certain that they are environmentally friendly.
Can the minister explain why he accepted this decision by the Department of Agriculture which harms the country's long term ability to protect the environment by signalling to producers of commercial forage seeds, the alfalfas, clovers, and grasses, that these seeds and plants are not useful to stop soil erosion and to clean up the air and the water of our country? Why did he stand by and do nothing?


Donald Frank Mazankowski: Mr. Speaker, I take it from the hon. member's question that he is deeply interested in soil and water conservation and sustainable agriculture. Of course, that is a very key component of the policy review

Routine Proceedings
process that we are going through. I would invite the hon. member's support in that particular initiative and we will welcome any comments or suggestions that he has to make in that regard.


Mr. Deputy Speaker:: The Hon. Government Deputy House Leader on a point of order.



ROUTINE PROCEEDINGS


Jean J. Charest: With the consent of the House, Mr. Speaker, I would like to revert to motions. With the consent of all parties in the House, I would like to put to you the following motion on the business of the Standing Committee on Finance:
That the House hereby directs the following arrangements with respect to the consideration, by the Standing Committee on Finance, of the proposed goods and services tax
1.	That the committee be authorized to travel as follows:
A)	A sub-committee of the said committee, composed of one member from each recognized party in the House, to travel to Whitehorse, for hearings on Sept. 30, 1989;
B)	The full committee to travel for hearings in Vancouver, (October 2 and 3), in Edmonton (Oct. 4), in Regina (Oct. 5), in Winnipeg (Oct. 6), in St. John's, (Oct. 18), in Halifax (also on Oct. 18), in Charlottetown (Oct. 19), and Fredericton (also on Oct. 19).
2.	That the committee make its report to the House no later than Thursday, November 28, 1989.
3.	That televised broadcasting of any or all public meetings of the committee in Ottawa, subsequent to the adoption of this order and until the committee enters into its report, be on the basis of the principles and practices now governing broadcast of the proceedings of the House of Commons.
4.	That the order for consideration by the House of second reading and committee referral of any bill or bills relating to the proposed goods and services tax be for "second reading and referral to the Standing Committee on Finance."
5.	That the committee be authorized to travel to Mont Ste. Marie, Quebec from November 6 to November 9 inclusive for the purpose of drafting the said report.


Mr. Deputy Speaker:: Does the hon. minister have leave of the House to introduce his motion?


Some Hon. Members:: Agreed.


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


Some Hon. Members:: Agreed.


Mr. Gray (Windsor West):: Mr. Speaker, as the hon. minister has said, this motion arises out of considerable discussion among the three parties. I want to note that the motion does not refer to the possibility of the committee having hearings in Quebec City or Toronto.
I hope the minister will indicate that-according to what some of the committee members have told me- the government would be willing to come back to the House with a motion to allow the committee to hold hearings in Toronto and Quebec City if it appears to the committee that there is a volume of requests to appear before the committee which would indicate the need to have hearings in those two cities.
I want to make clear that, even though we have our doubts and reservations about whether the committee is going to enough communities, we are willing to give our consent. Again I ask the minister to indicate to the House the position of the government on the possibility that the committee will say that in view of the volume of requests, there is a need to have hearings in Toronto and Quebec City.


Nelson Andrew Riis: Mr. Speaker, on the same point, I am looking forward to the response of the hon. minister. The deliberations have been extensive on this issue. We are pleased that we have been able to get this far in terms of the special House order. Repeated discussions have occurred in the finance committee over the last number of days on the need to travel to Quebec, particularly, and parts of Ontario.
The understanding, as we have it, is that we are giving consent to proceed so that the committee can get under way and get out to the west coast on the weekend with the understanding that this does not preclude that possibility in terms of holding hearings in the province of Quebec and in the province of Ontario. I think there is a general understanding in the committee by all members that this is appropriate.
September 28, 1989

Assuming that the relevant briefs come in from the province of Quebec and the province of Ontario, the committee is open to consider travel and holding hearings there. I simply want to put a quid pro quo on our agreement here by stating that, yes, we certainly will agree to this House order to get the committee on the road with the understanding that discussions will take place so that committee hearings will take place in Quebec, assuming that there is sufficient interest in Quebec City and in Montreal.


Jean J. Charest: Mr. Speaker, the House Leader for the New Democratic Party is correct, as is the House Leader for the Liberal Party, in bringing the attention of the House to the fact that there have been discussions within the committee on the appropriateness of holding hearings both in Quebec City and in Toronto.
I do not want to venture or speculate on what they may base their decision to come back to the House to put a motion. I will leave it to the committee to have its own debate and make that assessment based on whatever finding it may have.
We understand that there have been discussions and that the committee may, at one point, come back and ask to hold hearings in those two cities. We will leave it at that for now, let the committee do whatever work it has and come back to us in due course if it chooses to do so.


Herbert Eser (Herb) Gray: First of all, I take it that the question has been put and the order in question has been adopted by the House.


Mr. Deputy Speaker:: I did put the question. It has been agreed to by the House.


BUSINESS OF THE HOUSE
Herbert Eser (Herb) Gray: Mr. Speaker, on a point of order I would like to ask the Deputy Government House Leader to give a statement of the business the government intends to call for the next week.


Jean J. Charest: Mr. Speaker, of course this afternoon the allotted day motion
Business of the House
of the opposition continues. We will resume next Monday, October 2, for the full day with a vote at 5:45 p.m.
Tomorrow, Friday, September 29, we intend to continue second reading debate on Bill C-29, the forestry department bill. I understand that there will be no private members' hour tomorrow, so I expect that the House will be able to complete the second reading of this bill tomorrow.
Tuesday morning we intend to call second reading of Bill C-36, Coop Advance Payments bill. We hope the bill can be referred that day.
Tuesday, after Question Period, we will resume debate on Bill C-18, the multiculturalism and citizenship department bill. I indicate notice now that, because of the surprising slowness of the House pace which is arising opposite me, I will on Tuesday afternoon immediately before the Order of the Day is called for resuming debate on the motion for second reading of Bill C-18 and on any amendments proposed thereto move that the debate shall not be further adjourned.
Wednesday, we expect to be able to call second reading of Bill C-28, the income tax and other acts.


Mr. Deputy Speaker:: Perhaps the Hon. Member for Ottawa-Vanier (Mr. Gauthier) would allow me a few seconds?
I have received written notice from the Hon. Member for Comox-Albemi (Mr. Skelly) that he is unable to be present to move his motion during Private Members' Hour on Friday, September 29, 1989.

It has not been possible to arrange an exchange of positions in the order of precedence pursuant to Standing Order 94. Accordingly, I am directing the Table Officers to drop that item of business to the bottom of the order of precedence.

Since the notice will be withdrawn, Private Members' Hour will be suspended and, in accordance with Standing Order 94, the House shall revert to the business before it prior to Private Members' Hour.
The Hon. Member for Ottawa-Vanier.

September 28, 1989
Business of the House


Jean-Robert Gauthier: Mr. Speaker, I would like to get back to tomorrow's Private Members' Business and say that what you just did was entirely correct. However, when the Minister was speaking, I wondered how the Minister knew, even before the House or you yourself knew, that we could proceed this way.
I don't want to be difficult, but apparently the Minister informed the House that tomorrow there will no Private Members' Hour because of reasons known to him but not to us so far, since the Chair has yet to submit the conditions of this arrangement to the House.
So perhaps from now on, when the Minister is informed of something, the Opposition could also be informed so that we can have some co-operation.
[English)


Nelson Andrew Riis: Mr. Speaker, I wonder if I could seek clarification. When the minister rose in reference to Bill C-18, was it his indication that he was going to be then limiting further debate on Bill C-18? Was that the intent of his statement?


Jean J. Charest: Mr. Speaker, first of all, in response to the Hon. Member for Ottawa-Vanier, perhaps I may recall the exact words I used with respect to the bill presented by the Hon. Member in question. What I said, in English, was:

I understand there will be no private members' hour. [Translation]
So I did not offer either him or you, Mr. Speaker, with respect, or the Members of this House any certainty. In fact, what I said was that we understood the Hon. Member would not present his bill.
He wonders why we had prior knowledge. I suppose because we are on this side of the House. I make no pretence of enjoying divine inspiration, Mr. Speaker -In any case, in the course of a conversation we may be informed of certain things that may or may not take place.
Perhaps this also answers the question put by the Hon. Member for the New Democratic Party.
I also mentioned the fact that the House was proceeding at a slower pace than expected since it resumed sitting on September 25. In the circumstances, we are expressing our intention to ensure that legislation can proceed normally, that it be aired and discussed at a normal pace and for this reason we are making it clear today that we intend if needed to proceed with those debates in order that legislation can get through.
Mr. Speaker, I would also like to indicate to my friend from the New Democratic Party and other Members in this House that this in no way precludes any discussions in the meantime. If my honourable friend has suggestions-as it happens from time to time, as I know for having had discussions with him, he knows what I mean-if they have suggestions in order that we can look together for ways to ensure that our business proceeds normally, at a pace that is acceptable to all, then the Government as usual will be very open to any suggestions.


Mr. Deputy Speaker:: The Hon. Member for Ottawa- Vanier (Mr. Gauthier) on the same point of order.


Jean-Robert Gauthier: Apparently the Minister does not want to understand my point. The Hon. Member for Comox-Albemi (Mr. Skelly), a New Democratic Member, probably sent a notice to the Chair or the Clerk that he will not be able to be here tomorrow. We did not know the Hon. Member had done that. But the Government did know. So the Government have entry or access to the clerk's office which we do not. If this is what the Minister is saying, it is not proper.


Nelson Andrew Riis: Perhaps I can help my hon. colleague from Ottawa Vanier and the table as well. The hon. minister will know that we had some communication. The hon. member from the New Democratic Party had indicated to me that he was unable to be here for Private Members' Hour. I communicated that as a courtesy to the Chair. I am sorry, perhaps that same courtesy ought to have been extended to my hon. friend from Ottawa Vanier. It is simply a matter of communication.
I do want to say to the hon. minister that on Bill C-18 we in the NDP have had two speakers to date. To suggest that this is moving incredibly slowly seems to be a peculiar way to evaluate progress. Would one speaker only on a bill suffice? Is that the point the minister is

making? I want to register a strong complaint against this initiative being suggested.
I hope that we can sit down and negotiate a suitable arrangement so that those who want to discuss multicul-turalism in Canada will have an opportunity to do so. But two speakers from a political party in Canada participating in debate surely is not unduly holding up progress.


Jean J. Charest: The government, as the hon. House Leader for the New Democratic Party has indicated, is very much open to discussion on how we can proceed in an orderly fashion to get the business of the house done. To that point we were ready to split time for speakers so that we could get more speakers in. That is one thing we are open to. In that manner more members can speak on the multicultural act that we are presenting before the House now.
The hon. member knows that yesterday a lot of time was taken up for petitions.


Albert Glen Cooper: Which we offered to add to the end.


Jean J. Charest: As the parliamentary secretary points out, we had offered to add to the end of debate. These are all things the government is ready to look at in light of the good co-operation between all parties to get the business of the house done.
Finally, I would like to add one comment. At no point in time have I ever thought that the integrity of the Chair was called into question. It is quite clear that we on this side of the house believe that the Chair has maintained, always has and will maintain, a very strong position of neutrality. Never would we on this side of the House question the neutrality of either the Speaker or the office of the Speaker.


Jean-Robert Gauthier: Things are getting carried a little too far here. As a matter of fact, he knew something that I did not know because the NDP told him. I think it is now cleared up.
I want to refer to a disease that seems to be catching over there. Yesterday we saw the parliamentary secretary shedding crocodile tears about slow progress in the adoption of legislature in the House in the last few days. We have only been here three days. The government knows that this is the sixty-fifth day of this session. It is up to the government to call the House back. If they do not want to do work and call the House back to its
Business of the House
function as the parliamentary forum for debating bills, then it is their problem, not ours.
I would say to the minister that we have been more than co-operative this week. But he has not convinced me that it makes sense to have only two or three speakers on a bill as important as the multicultural bill-a bill that is going to possibly be sent to a committee that was struck yesterday by this House, created when we separated communications, culture and multi-culturalism. We created a new committee of the House of Commons. This bill will give it some matters and questions to discuss. I find it very difficult for the House to accept that the government with its majority is now imposing its will on the rest of us by imposing a very short debate on a very important bill that deals with a very important subject, multiculturalism.


PRIVILEGE
Iain Francis Angus: I gave notice to the Speaker during Question Period of my desire to raise a point of privilege regarding a matter that occurred during Question Period.
Myself and members of my caucus erroneously used the services of Pages to deliver material to the Prime Minister's desk. It is my understanding that the normal procedure, and I am not sure if it is an order of the House, is that large mailings of that nature should go to the post office.
In this modem era we all know that mail such as that really does not come to the attention of the person it is addressed to. It ends up in a computer somewhere and perhaps a list of the number of letters received each week is provided to the intended recipient.
I would like to ask, Mr. Speaker, if you could undertake to review that particular rule so that members of Parliament, on behalf of their constituents, can have direct access in terms of large quantities. Obviously, we still have the right to send an individual letter over to a Minister or to the Prime Minister, and vice versa. My question is in terms of large mailings, not petitions which are covered under other rules, such as that which we started to send to the Prime Minister today. In fact we

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completed it by carrying a large mail bag up to the third floor of this building.
I ask you, Mr. Speaker, to take a look at that to see whether or not the rules reflect the reality of the modem era of mail coming to the Prime Minister in particular but also cabinet ministers and members of Parliament.


Mr. Deputy Speaker:: I can tell the hon. member that I am not in favour of changing the rule, however I will look into the matter and get back to him.


Jean J. Charest: I doubt very much that this is a question of privilege. It probably is not. The debate would probably stop immediately. Furthermore, there is one rule in this House, for example, that does not permit members to put on or to show something when they debate. In the same spirit I think we can draw a conclusion that we certainly would not want to encourage members on all sides of the House, and it is not just a matter of members on this side, but on all sides of the House, to enter into a procedure where we are sending packages from one side to the other, or putting on demonstrations for the sake of the House or for the sake of making a point.
I think that is the spirit of the rules of the House now, and I expect the Speaker will want to look at such a question in that very spirit.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Turner:
That this House condemns the Government for its mismanagement of the Canadian economy, including:
1)	the threat to impose a new 9 per cent sales tax that is regressive, inequitable, invisible and inflationary;
2)	an unjustifiable high interest rate policy, with an interest rate spread between Canada and the United States that is at record highs;
3)	negligence in the management of Canadian trade causing unparalleled reductions in our trade balance and a loss of jobs, and threatening the survival of many formerly thriving Canadian industries;
4)	abandonment of Canadian primary producers with resulting undermining of the farming, fishing and forest industries; and
5)	continued neglect of regional disparities.
Mr. Deputy Speaker:: At one o'clock when the House rose there were five minutes left for questions and comments on the speech of the hon. member for Kenora-Rainy River.
The Hon. Member for Winnipeg-St. James on questions and comments.
Mr. Harvard I was listening to my colleague from Kenora-Rainy River and it raised a question in my mind with respect to the inflationary pressure that would be brought on by imposition of the GST. I think the finance minister has already indicated in a number of statements that inflation would rise as a result of the levying of the GST. That in turn would probably raise interest rates and reduce our purchasing power.
The question I have for my colleague from Kenora- Rainy River has to do with what impact this is going to have on wage rates in the country. What is the response going to be from unions? What is the response going to be from ordinary workers? If they face inflation, if they face higher interest rates, if they face a loss of purchasing power, are' they not going to go to their employers asking for huge raises to offset this GST?
That is the question I have for my friend from Kenora-Rainy River.


Robert Daniel Nault: Mr. Speaker, I want to thank my hon. friend for his question. I shall preface my answer with a little background, and being a unionist myself, it gives me great pleasure to tell you that I have had discussions with some unions relating to their philosophy of how they are going to bargain once there is GST, if it so unluckily does pass.
Basically, they are not going to accept it and just allow their way of living, their improvements in life, and what they expect for their family to go unquestioned. What they will do, I am sure, when bargaining in the next round of negotiations, and some are coming up this year with very large, major unions, is expect a large increase in wages to offset the loss of their income.
I expect what you will see is a confrontation between business and labour. As you all know, it is important for labour, and the individuals who work for the different labour movements, to get the same improvements in wages as the businessman would. Therefore, he will pass
September 28, 1989

it on to the consumer. I think what we will see is mass inflation in our country because there will be an out and out war between labour and business.


Fred J. Mifflin: I have a question for my colleague from Kenora-Rainy River. First, I would like to congratulate him on an excellent presentation. I did note in his presentation that he highlighted two areas that certainly are of interest to me, small business and tourism. I would like to ask my hon. friend if he could highlight some of his more pointed concerns, particularly in these areas of small business and in tourism.


Robert Daniel Nault: Mr. Speaker, in an area like northwestern Ontario there are many small communities which are basically single-industry towns, except for the area of tourism, which is the secondary industry that we have. We have been told over and over by different governments, and this government is no exception, that tourism and the service industry is the industry of the future, that is where we should be headed, where we should be looking to in the next century.
Unfortunately, that is not taking place in places like northwestern Ontario in the tourism industry. I might say before going on that the Minister responsible for Small Businesses and Tourism did come to northwestern Ontario this summer and told all the tourist operators that he had the ear of the Minister of Finance and that there would be no problems in relation to the tourism industry. They would be looked after. There would be exceptions and exemptions for them. Lo and behold in the technical paper there is no such thing. Tourism is a big employer in regions like northwestern Ontario because of its beauty and the fact that people like to visit.
What has happened now is that the goods and service tax will increase the cost of transportation, it will increase the cost of goods, and it will increase the cost of staying in hotels and motels. That effect will run off what little tourism is left in northwestern Ontario.
What we are finding now, and these figures will bear this out, is that there is a 50 per cent drop in the number of people crossing the border from the United States to Canada. In our area tourists are dropping back because they are now going to places like northern Minnesota, which is very similar to northwestern Ontario, because it is cheaper and it is easier to have an affordable holiday, whereas in Canada we have made it too restrictive
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because of the tax increases that keep coming every time we turn around.
It is easy for the people in Toronto or Montreal to say: "Well, it is okay. One cent more for gasoline."
When you use vehicles as much as we do to go hundreds of miles from one neighbour to the next, it is very expensive. When tourists are put in that situation and they figure out how much it is going to cost to go on their holiday, with the travelling involved, they suggest to their families that because of their pocketbooks it is just not affordable. Therefore they go somewhere else like northern Minnesota which is not doing us any good. To add insult to injury we are now going to lose VIA Rail, a big tourist promoter in northwestern Ontario, which also brings megabucks as does tourism in our area. So now we have the double whammy.
Therefore, I suggest that we cannot afford this goods and services tax, not in northwestern Ontario, not anywhere in Canada. I suggest that the Minister of Finance take a different approach and look at stimulating the economy through different mechanisms rather than raising taxes over and over again.


Michael Holcombe Wilson: Mr. Speaker, I am pleased to participate in the debate today because I think it is important that we put some of these statements that have been made about the goods and services tax into some perspective.
There have been some who have said that this tax is something that has been dreamed up at the last minute and put before the Canadian people. Nothing could be further from the truth, because back in November of 1984, in the agenda paper for economic renewal, I did state for the first time on behalf of the government that this was a tax that we were considering. It was all part of the economic plan that we put forward at that time. It was a plan designed to reduce the deficit, to get out debt under control, to improve the operations of the economy by giving encouragement to the private sector through deregulation, through encouragement of investment, through change in our privatization policy, freeing up markets, getting access to the large United States market, as well as the multilateral trade negotiations. It was also designed to help Canadians get better training and

September 28, 1989
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get better equipped to face the future. All of this is combined with tax reform as well.
We have had the first stage of tax reform that became effective in 1988 for personal income tax and corporate income tax. Now we are moving in a systematic way to the second stage of tax reform, sales tax reform. We all know in this House that this goods and services tax that we are proposing is a replacement for an existing tax which is a very damaging tax to our economy. There are very good reasons why we are moving in this direction. The existing tax results in a hidden tax on our exports. The nature of the tax results in a one-third less burden of taxation on imports as opposed to Canadian production. Canada is the only country in the world today that still has a manufacturers' sales tax. Forty-eight countries have a multi-stage tax such as the one that we are proposing here, so we are not exactly pioneers in this area. It is something that has been a long time coming and it is important that we get on to this so we can remove this drag from our economy which is causing us to lose about $9 billion of economic activity every year.
There are very good reasons to bring in this new tax. One is the competitive position as I have just described. The second is to allow us to get on further in getting the deficit down and controlling our debt. Finally, since we all pay taxes, and we all know we have to pay taxes, the important consideration and the key responsibility of government is to bring in a fair effective tax. That is what we are doing with the goods and services tax.
Now opposition members have said in their interventions earlier today that everybody is opposed to this tax, and that the tax is fundamentally flawed. One thing absolutely clear is that no fundamental structural flaw has been pointed out in this tax proposal. In the month and a half in which the technical paper has been out for the practitioners to study, no fundamental structural flaws have been pointed out.
Opposition members have said: "Let us scrap it. Let us get back to the drawing boards". As I said a minute ago, governments have been trying since the early 1950s to get rid of this existing tax. Mr. MacEachen, the Minister of Finance in 1981, made a proposal to get rid of the tax
and move it to the wholesale level. That did not work, but he did ask for Mr. Wilf Goodman, Q.C., to head a committee that would advise on the way we should be moving from the manufacturers' sales tax to a new type of consumption tax. In essence what Mr. Goodman proposed, moving to a multi-stage tax at the retail level, is the precise form of taxation that we are talking about today.
After Mr. Goodman reported to the government, we brought out a white paper in June, 1987 and we are proceeding with consultations and discussions with many groups and organizations to fine tune and make sure that the proposal we have on the table today represents the consensus that we could achieve as we designed this tax.
What I would like to do is analyse what people are saying. In the finance committee people have said that hardly anyone agrees, but it is very clear that there is a common theme running through here, namely, that practically everyone has said get rid of the old tax. People have some problems with the proposal that is on the table today, and when one analyses exactly what they are saying, it is very clear that some have come down on one side or the other side of the particular issue. Yes, both sides are opposed, but they also have diametrically opposing points of view. People have said they want to recommend change by lowering the rate, by changing the credit, by changing the tax base, and by reducing the compliance costs. Yes, there is this criticism, but let us examine it further.
How would those who want to reduce the rate go about doing that? By reducing the credit? By reducing the small business payment, or offsetting the compliance costs? Would they do it by reducing the housing rebate? Some people have been saying we should reduce those things.
But on the other side we have the small business community saying: "You have got to pay more on the compliance offset". The housing industry is saying "You have to raise the housing rebate". Others have said we have to increase the size of the tax credit.
We have very clearly conflicting points of view. We have people who are saying it is important that we reduce the complexity of the tax. One of the elements of complexity is whether or not groceries should be taxed.
September 28, 1989

We have some people who are saying "Yes, tax everything. Groceries should be taxed". On the other hand, we have the grocery association and some of the organizations representing the lower-income people, people on welfare, who are saying "By no means should you tax food".
Again we have people saying tax food and others saying don't tax food. We have people saying exempt me, exempt the product that I sell while we have people who are saying tax everything. That is the position we have seen develop over the course of the last few weeks. There is criticism, but that criticism is also diametrically opposed.
I want to comment on one thing that the Leader of the Opposition said today. I could not believe my ears. He said "This government has lost complete control of spending". How can this man talk about completely losing control of spending when, as finance minister, his government's spending increased at a rate of 29 per cent in one of the years in which he was minister of finance. The program spending of the Government of Canada prior to our taking office was increasing at 5 per cent higher than the rate of inflation, 14 per cent per annum. Compare that to this government which he says has totally lost control of spending. Our program spending has increased at 3.5 per cent per annum, a half per cent below inflation, rather than the 5 per cent above inflation under the previous government.
People-including I believe the Leader of the Opposition-have said that this is the most regressive form of taxation.
When we came into office we had a sales tax system that resulted in low-income Canadians paying two or three percentage points more of their income in tax than people in upper incomes. Now, with the GST tax system including the tax, the low-income credit and the middle-income tax reduction, we have the exact opposite. People with low income are paying two or three percentage points less of their income in sales tax than people with upper incomes. Rather than moving into a more regressive tax system, we have moved into a progressive tax system in sales tax reform.
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The NDP said that it would never impose a consumption tax. I do not know where the member from Kamloops was when the NDP signed the finance committee report which said, "In short, a single rate value added tax on the broadest possible base is a desirable objective." Does the broadest possible base include things like children's clothing and services? I would like him to describe what they had in mind when they signed that report as to what the broadest possible base is, because we have an example here of politicians talking out of both sides of their mouths. I think Canadians are getting a little fed up with that type of reaction from their political members.
Let me get back to the essential point of my intervention today. The government position as set out in the technical paper that we put forward on August 8 is a proposal which has been developed after much study and careful consultation since June, 1987, when we put out the white paper on tax reform. We consulted with the provinces for about two years. The result was the technical paper, a very specific proposal which took into account the balancing interests about which we had discussions during this period of time.
We expect opposition and we expect different points of view. It is the responsibility now of the government and of the committee to reconcile these points of view. It is the responsibility of the opposition not to blindly repeat each piece of criticism but to join in this debate, to join in this discussion. I call upon the opposition members and the public to engage in this debate so that together we can develop the best form of sales tax system in the world today.


Mr. Manley:: Mr. Speaker, I listened with interest to what the minister had to say, having sat through the hearings of the finance committee for the last number of days. Many of his comments on what the witnesses were saying are certainly of interest to me.
I would like to point out to him that even the staunchest supporters of the tax, the ones who have said you should go ahead with it, have been adamant in pointing out the flaws. Even those who think you should tax everything that moves-we were told this morning you should tax the interest on the bank accounts-say

September 28, 1989
Adjournment Debate
that we cannot live with a two-tiered tax if the government cannot get the provinces on side. This is, in the words of the retail council last night, an act of self-mutilation.
We heard on the news last week that this government in fact had-and I suppose still does-a proposal in its back pocket that would allow an amendment of the manufacturers' sales tax to continue a tax only at the federal level so we would not get into this incredible mess that we are leading into with a two-tiered system of consumption tax in Canada.
Whatever other flaws there are in this proposal, and there are many, the fact that we cannot have a single-tiered tax system in this country makes it impossible to go ahead with this proposal.
I think the minister should admit that. He should get up and say: "This is the best we can do but it is not good enough and, therefore, we will have to find another way to address the inequalities and the problems in the manufactures' sales tax". The best minds in Canada will have to address themselves on how to fix that tax because we have to live with this federal system.
In fact, as we heard this morning in the committee, it is really the monetary policy which this government is pursuing that is hurting our exporters a lot more than the manufacturers' sales tax. It adds 1.2 per cent to the price of an export. In the last 23 months the exchange rate of the Canadian dollar has gone from 67 cents U.S. to 85 cents U.S.
That is a much greater problem to the exporters than the manufacturers' sales tax. Yet the government does nothing to address the problem of high interest rates in Canada. I would like the minister to tell us whether it is true, as the reports have suggested, that the Department of Finance had prepared for him a proposal to amend the manufacturers' sales tax at the federal level only without going to a multi-stage value added tax.


Michael Holcombe Wilson: Mr. Speaker, the hon. member is absolutely right. That was roundly criticized by all members of the finance committee in the last Parliament. Surely, the government would be criticized roundly if we did not listen to the views of the finance committee. That is why we have not proceeded with that
and why we are proceeding with the goods and services tax.
The hon. member asks why are we not dealing with the problem of high interest rates. We are, Mr. Speaker. But we are not doing it in the way that was dealt with by the government 10 years ago.
I remind the hon. member that we had an inflation problem in the 1970s. The rate of inflation in 1976 was about the same as it is now, 5.5 per cent. About four years later it was up at 13 per cent because the government of the day swept it under the carpet. We are addressing this head on with our monetary policy. It involves for a while high interest rates, higher than I would like to see, higher than the hon. member would like to see. But I know it is necessary for us to endure these rates for a period of time so we can get that problem of inflation under control.
If we do not get inflation under control, we will be standing here in the House talking about 13 per cent unemployment and the 20 per cent interest rates that we had in the early 1980s. This government is not going to repeat those mistakes. We are going to deal with the problem of inflation now and not sweep it under the carpet. We learn from past mistakes that others have made. We do not blindly follow the shibboleths that my hon. friend would like us to.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the Hon. Member for Winnipeg Transcona- The Environment- VIA Rail cutbacks-Request for impact study / Government position; the Hon. Member for Algoma-Dairy industry; the Hon. Member for Thunder Bay-Atikokan-Transportation-VIA Rail services / Government position.
September 28, 1989



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Thmer (Vancouver-Quadra) that:
That this House condemns the Government for its mismanagement
of the Canadian economy, including:
1) the threat to impose a new 9 per cent sales tax that is regressive, inequitable, invisible and inflationary; 2) an unjustifiable high interest rate policy, with an interest rate spread between Canada and the United States that is at record highs; 3) negligence in the management of Canadian trade causing unparalleled reductions in our trade balance and a loss of jobs, and threatening the survival of many formerly thriving Canadian industries; 4)abandonment of Canadian primary producers with resulting undermining of the farming, fishing and forest industries; and 5) continued neglect of regional disparities.
Fred J. Mifflin: I am very pleased to be able to stand up today and speak on the economy. But like the Right Hon. Leader of the Opposition I am saddened and disappointed that I have to speak on such a sombre note.
There is so much to talk about, it is difficult to know where to begin. I could talk about the disastrous effect of the GST like many others have done today. I could talk about the disillusionment of the 2.5 million senior citizens at the clawback. I could talk about the dramatic decline of the federal direct assistance to business in Atlantic Canada, the anxiety of fishermen over the future of the fisheries on both coasts, the increasingly destructive effect of the high interest rates to which reference was just made. There is also the fact that during the second quarter of the year over-all economic growth hit the skids along with exports, corporate profits, housing starts, auto and retail sales. Even the tourism deficit hit a historic high of $1 billion. That is a large percentage of the whole business.
Yesterday we sat in this house and heard in disbelief that the government leaked plans to slash VIA Rail. I could express my concern and that of my colleagues over the 31 times our taxes have been increased by the Minister of Finance since 1984, in most cases without telling us what was going on.
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I could talk about this government's policy of removing almost all barriers to foreign investment in which foreign buyers have enthusiastically responded, or the reports that there have been 23 Canadian companies sold to U.S. buyers during the first six months of this year compared with 11 during the first half of 1988.
I could talk about Canada's 514,000 full-time university students who are resuming their studies at 68 degreegranting institutions this fall, for whom overcrowded classrooms, outdated equipment and deteriorating building plants are a fact of life. I could talk about the million youngsters in this country that will never be able to be the teachers, professors, engineers and leaders that they have the potential to be because of the economic circumstances.
I could highlight the concern that free trade is costing us control of our economy. I could use as examples, unfortunate examples, the unexpected and the ironic twist in which the government is being forced to buckle under a free trade bilateral deliberation that threatens Canadian restrictions on the export of fish in British Columbia and threatens that industry, 4,000 jobs and $580 million worth of exports.
I am more concerned as the member for Bonavista- Trinity-Conception, that this will go on to threaten the east coast fishing industry. It is hard to know where to start and where to end. We are all the victims of time and circumstances in this House, so I would like to concentrate on two aspects of the economy that concern me the most: The changes to the Unemployment Insurance Act, Bill C-21, and the goods and services tax.
First, Bill C-21. There are a number of things that concern me about this deplorable initiative of the government to divert $1.3 billion from the $13 billion fund in the near term and to eventually withdraw all government support of the future to the tune of what is now $2.9 billion.
There are individual concerns, but, above all, it is the negative synergism of all these concerns taken together. In this case, the individual points add up to more than the sum of the parts. They add up to something like 10 or 12 times the effect, and the effect is not linear, it is more like exponential.

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Let me outline the results of the proposed changes that concern me and practically every person involved with unemployment insurance in the riding of Bonawis-ta-Trinity-Conception, the province of Newfoundland, Atlantic Canada and perhaps all over the country. First of all it represents a breach of trust. It is a broken promise solemnly made by this government last fall. It redirects money for the unemployed into training. There is nothing wrong with training but why should it come out of the unemployment insurance fund? More important, it is training for jobs and positions that do not exist in my riding. I do not see them ever existing.
It provides the level playing field by getting the government out of the UIC business, insisted on by the free trade agreement for the benefit of the United States, not for the benefit of Canada.
It hurts the very people it was designed to protect. It was sudden; it was abrupt; and it attacks the very heart of the Canadian social security system, a program about which Canadians care very deeply. It runs counter to the expectations of Canadians. As if that were not bad enough, this is at a time when the Minister of Finance himself admits that next year the unemployment rate will run from 7.7 per cent to 8.5 per cent, a 10 per cent increase in one year. He promises that next year we we are going to have a 3 per cent rise in inflation. We add all this up with the unemployment insurance changes, and it is not a very bright picture.
Taken all together, they spell disaster. This is the constitutional right about which Canadians concern themselves, and the government has attempted to privatize it. That is just not honest. The questions has been raised here today about whether or not this is lawful. There is no doubt that it is unjust. Perhaps unlawful justice is done and lawful injustices are committed somewhere in the world every day, but this is Canada. We do not have to stand for that and we will not.


An Hon. Member:: And we won't.


Fred J. Mifflin: No, we won't. During the election campaign the Right Hon. Leader of the Opposition was accused by this government of using tactics to scare Canadians. They said he was wrong. He warned that the free trade agreement risked major changes to our social
programs because our senior negotiators admitted that they did not have the time to work out the definition of regional development and subsidies.
Well, he was right and they were wrong. He was right because what he said might happen is happening. They were wrong for two reasons. First of all, they broke their promise. More importantly to me and many of my constituents, they knew they would break that promise even as they were saying the opposite at the time. That is nothing short of despicable. They cannot be trusted.
I want to take a few minutes to talk about my concerns over the goods and services tax. More and more, I find my reaction to this terrible proposal-there is only one term that I can use- inexpressively distressing. It is nothing more than a cash cow that will raise wages, fuel inflation, cripple small business and drive consumers crazy right out of their minds.
I spoke about my concerns earlier in this House on June 15. Three months later, my concerns are greater. The more I learn about what the government thinks it has in mind, the more concerned I become. Is it any wonder I am concerned? The government said this was going to be revenue neutral. The very first statement in its shameful attempt to bribe Canadians with their own money into accepting this bill of goods is the following statement: "It is going to be revenue neutral and it is a major part of the ongoing program to reduce the deficit".
I am confused. The government said it was going to be done in co-operation with the provinces. Not one province agrees. The government said it is going to be visible. We see it is not visible. It is going to be simple. Somebody estimated, I think it was the Consumers' Association of Canada, that 10,000 bureaucrats will be needed to administer it and somewhere in the vicinity of billions of dollars.
Let me look at the experience of some other countries very quickly. Denmark, same tax, 10 per cent to 22 per cent; France, 13.6 per cent to 18.6; Germany, 10 per cent to 14 per cent; New Zealand, 10 per cent to 12.5 per cent; Britain, 10 per cent to 15 per cent; Holland, 12 per cent to 20 per cent and, Sweden, 10 per cent to 24.5 per cent. If we follow the example of Sweden, we would be able to cancel all income taxes and get the same revenue. That

is a startling revelation and perhaps I should not reveal it to this government.
Everybody is against this tax. Eighty per cent of Canadians are against it according to a recent poll. As far as I am concerned and from what I hear today, the world is against it. We have a saying in Newfoundland that I would like to trot out for the Prime Minister and the Minister of Finance. It is a very simple statement. They say: "In a fight between yourself and the world, back the world".
Mr. Reid Mr. Speaker, it is a great privilege to be back here and to have the opportunity to respond to my hon. friend and fellow Newfoundlander who, I should like to point out to this House, was very kind to me recently during some time that I spent in his beautiful and historic constituency. Unfortunately, that does not make up for what we have heard in the last ten minutes from my friend opposite who wanted to talk about this government's policy in terms of the economy.
This government's policy let us see in this country the creation of 1,550,000 jobs since September, 1984. The national unemployment rate is falling from 11.6 per cent to 7.4 per cent and the youth unemployment rate, a concern to all Newfoundlanders and Labradorians, and all Canadians and members of this House is falling from 18.2 per cent to 11 per cent. In our province, it has fallen a total of 10 per cent over that period of time.
We have seen in terms of growth and expansion in the economy 20 per cent, growth that the hon. member talks about as being unacceptable. In 1988, 223,000 homes were built in this country. In 1984, 135,000 homes were built in this country.
Let me talk more specifically, if I may, about the region. Total unemployment in Atlantic Canada has fallen by 33,000 compared to an increase of 65,000 between 1980 and 1984. In 1988, in Newfoundland and Labrador alone, we had the largest drop in unemployment of any province in this country and we saw an increase in jobs of 10,000, 10,000 people who were working that year but were not working the year before.
I have a short time left. I know my friend would like to comment. I do have one thing to say about unemployment insurance. Next year it is anticipated that $865
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million in benefits will be paid into my province under employment insurance. The proposals made by this government will see a reduction of some $30 million out of $865 million in straight benefits.
We see an increase of $45 million for things like Community Futures, older workers, maternity benefits and benefits for those people who need help in times of sickness. Community Futures is a program which in my hon. friend's constituency has been shown to be hugely successful. In most of our provinces, it has been hugely successful and we have more money from this program.
The thing that aggravates me more than anything else when dealing with unemployment insurance is that narrow-minded, closed, "don't-change-anything" attitude. If we change nothing, we see no progress, we see no evolution, we see no hope. We must say to people that we keep adapting, we keep moving, we keep changing because there are options. This provides options.


Fred J. Mifflin: Mr. Speaker, I am delighted to rise to congratulate my hon. friend from across the House on a first-class revelation of statistics. I do thank him for conceding that he enjoyed his visit to Bonavista-Trinity-Conception. I wonder if he would like to return and make that speech in the town hall that he just made. If he did, I would demand equal time. There are a number of things that I would like to say.
Statistics are a little bit like a lamp to a drunken sailor: more for support than for illumination. I would like to point out that what he did not mention was the money lost to UIC recipients in the province of Newfoundland alone. According to a reputable study-I cannot quibble with the figures-if we include the UI payments to recipients that they will not get plus the income tax benefits that would be paid anyway, the loss is $91.7 million. I have divided it three ways, and in the riding of Bonavista-Trinity-Conception, I cannot conceive of how to explain what $30 million means to my riding.
He also did not mention the very crucial area of job development that I deal with on almost an hourly basis in my riding. The hon. member knows that because he does the same thing. I am dealing with a loss of $53 million over all in the country and that affects me to a degree that causes me distress every day. I have to turn to people and say: "No, you cannot have your community hall, you cannot have your fire hall, you cannot have this

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and you cannot have that," because all of a sudden the ground rules have changed.
The perception of Mr. de Grandpre, as I understand it, and I think we paid him $1.5 million to do this study, was a vision of a trampoline which would put you back into the training market and a safety net which was unemployment insurance if you fell off. The government wants to have the trampoline but not the safety net, so if you fall off the trampoline, you might go right through the safety net. That is what my people are concerned about. Mr. Speaker, I thank you for the opportunity to respond to my very learned friend.
Mr. Jack Shields (Parliamentary Secretary to Minister
for International Trade): Mr. Speaker, it gives me a great deal of pleasure to participate in the debate today. I would like to preface my remarks by pointing out what this government has done to restore Canada's competitiveness on international markets.
I would like to point out that we have done more in our term of office to improve our competitiveness in the international market-place than any other government in the history of this country. We have liberalized investment controls, we have deregulated energy and transportation, we have privatized many state-owned enterprises, we have developed a new labour market strategy, we concluded a free trade agreement with the United States and we have undertaken major reform of income and corporate taxes. We are now reforming our manufacturers' sales tax.
These moves have been and are part of a concerted plan to make markets function better for the benefit of all Canadians. Despite the inevitable transition problems that accompany major reforms, the longer term benefits are clearly apparent and have already done much to improve Canada's economic performance. There has been a remarkable rise in business investment in Canada over the past few years and that is testimony to the strong business confidence resulting from our policies.
Intended business capital spending in 1989 amounts to $82.7 billion. That is an increase of 13.6 per cent over 1988. That means jobs for Canadians. The OECD
projections of economic growth continue to put Canada ahead of the pack among member countries.
The next steps in improving our competitive position will involve measures to remove distortions in Canadian markets while securing our access to foreign ones. The new goods and services tax is an important instrument for that purpose.
The goods and services tax replaces a manufacturers' sales tax that has been universally recognized as obsolete and distortive. It is broken. In particular, replacing the manufacturers' sales tax with the GST removes the bias that exists, imports over domestic production that is there in the manufacturers' sales tax. Can you imagine, Mr. Speaker, that we tax goods produced in Canada more than we tax goods being imported into Canada? We are shooting ourselves in the foot continuously every day that this manufacturers' sales tax stays in place.
The GST applies at a single rate of tax to a comprehensive base of traded goods and services leading to a more efficient allocation of resources. That helps to lower the cost of capital to Canadian businesses which makes them more competitive and it lessens the relative burden on manufacturers which makes the manufacturer more competitive.
Canada, as the Minister of Finance pointed out, joins an increasing number of industrialized countries that apply multi-stage consumption taxes. Those countries, it should be noted, have gained increased competition for their exports. It has done nothing but good for them. It has made them more competitive in the world market. Not least, implementation of this tax will remove a major source of uncertainty affecting growth and investment decisions.
Canada has for a long time been the only country to operate a sales tax at the manufacturing level and one that, by its very structure, disadvantages our own producers as compared to foreign exporters. That is why we have seen the influx of foreign goods at a more competitive price than Canadian goods on the shelves in our stores.
The manufacturers' sales tax taxes domestic inputs of marketing and distribution costs which were not fully captured in the tax levied on imports. Because the manufacturers' sales tax was essentially invisible from the point of the consumer, people were not aware of the effects on their choices as consumers. They did not know it was there. They did not know how much tax they were
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paying on the goods that they purchased. It did not affect their choices as consumers or indeed their jobs as producers. The new goods and services tax will be visible and will remove or reduce the above biases to consumption and production.
In trade terms, Canada achieves by reform of the manufacturers' sales tax the removal of a self-inflicted wound. We are going to stop shooting ourselves in the foot. We increase the advantages to Canadian producers in markets in Canada and indeed when they export abroad, without, I might add, having to offer additional concessions to our trade partners.
The GST will lead to a significant improvement in the efficiency with which resources are allocated both within Canada and between Canada and other countries. The manufacturers' sales tax as it stands today provides for four different rates of tax. There are 22,000 special exemptions that have been won through the tax courts of Canada. Presently there are approximately 130 cases in the tax court seeking special exemption from the manufacturers' sales tax. Anyone with an ounce of sense would recognize that this distorts the relative prices of the commodities concerned and the investment choices that were made on that basis.
The reduced efficiency that flowed from this was reflected in output below potential. Canada's output today is below potential because of it. That reduces any gains that we might make from trade.
In contrast, the goods and services tax provides for a single rate of taxation applied to a comprehensive base of traded goods and services. The manufacturing sales tax incentive to shift out of manufacturing into services will be removed. Companies are restructuring, trying to move as much out of manufacturing into other areas of doing business and not always in a very efficient way. Producers, instead of concentrating on that kind of thing, will be able to allocate their productive capacity to the most economically remunerative purposes. That makes them more competitive.
This will be an important factor for the continuing restructuring of the Canadian economy to meet international competition. We must become internationally
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competitive. Because Canada is a trading nation, our very prosperity depends on this competition.
With an efficient tax system, business can concentrate its efforts on decisions about the best use of real resources rather than concentrate on how to minimize tax liabilities. An efficient consumption tax will also serve to encourage savings, an element that is very important at a time of large demands for capital accumulation and restructuring of the economy.
This is a difficult period for many western economies. The stresses on international trade and payment systems have grown from a number of sources, escalating debt, weak commodity markets, major payment imbalances, proliferating terriers to trade. Canadian economic and trade policy has balanced the needs arising from these and other uncertainties in order to gain security and growth for Canadians.
Through the free trade agreement, we have secured duty-free access to the largest national market in the world. Access, however, will not do us any good if we do not also develop the competitive capabilities to make use of it and to extend our influence into other developed markets. This is what the GST will help us do together with other ongoing elements of the government's economic program.


Mr. Harvard:: I must say at the outset, Mr. Speaker, that the stoicism of my hon. friend from across the way is quite remarkable. The flames of protest against the GST are searing hot right across the country but particularly in his own home province of Alberta, and there he stands placidly, serenely, indifferently, as if nothing was going on outside of this House of Commons beyond Parliament Hill. It is as if the part of Canada where he lives belongs to some other planet. The fact of the matter is that Canadians are extremely upset about this tax and yet he did not recognize that fact at all in his 10 minute speech.
Since this government was first elected in 1984, it has failed to come to grips with the deficit despite all its protestations about the deficit. The debt has gone up from about $170 billion to $340 billion. This government has raised taxes not just 10 times, 20 times or 25 times but 30 times. I think the Leader of the Opposition identified the number of times this government has raised taxes: 31 times! Yet it is this government that talks

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about its fiscal management as though it is doing such a tremendous job.
On top of this record of the past five years, now this government has the nerve, the unmitigated gall, to come along with this whopper called the GST and is going to gouge Canadian taxpayers to the tune of $10 billion extra as though we had just all kinds of money to throw away.
The Minister of Finance who spoke in this place just a few minutes ago has broken his promises over and over again on this issue. He talked about visibility of the tax. There is no visibility. He talked about a federal sales tax scheme that would be integrated with sales taxes in the provinces. Did that happen? No, it certainly did not. He has broken his promises over and over again.
He talked about the tax being revenue neutral. Some kind of revenue neutral. He admits or concedes that perhaps the additional gouging of taxpayers will go up to around $6 billion. We know it will be more than that. It will be closer to $10 billion.
I know I am running out of time, but I am coming to a question. Almost every major business group in this country is opposed to the GST. According to a CTV poll, 79 per cent of Canadians are against the GST and yet they push it through. I ask my hon. friend from across the way who shares one of the prairie provinces with me how in the name of heaven can this government justify pushing through this crushing tax?


Mr. Shields:: Mr. Speaker, first I would like to point out that I do not share Alberta with that hon. member.
The hon. member said that the province of Alberta was adamantly opposed to the imposition of the goods and services tax. That is true. It is because of the general type of rhetoric that we just heard from that hon. member when he stood up to ask a question. His rhetoric says that they will even tax your funeral.


John Harvard: I did not say that. It's true though.


Jack Wendele Shields: No, but I am telling you that that is the kind of rhetoric-it is true? Yes, that is true because right now we tax the shovel at 13.5 per cent, we tax the casket at 13.5 per cent, we tax the shroud at 13.5 per cent and we even tax the hearse at 13.5 per cent. After the GST is put in place, it will be 9 per cent, so who is being silly?
All they are doing is raising rhetoric. When they do that, I think they do a real disservice to Canadians in every walk of life. Hon. members, even if they are in opposition, should get hold of the facts and lay them out to the people instead of coming out with rhetoric that completely distorts. I might add that they are following the same tactic today that followed in the free trade debate. Look where it got them, right over there where they belong.


Leonard William (Len) Taylor: Mr. Speaker, I am very happy to be able to participate in this important debate today. It is an important debate because of the nature of the legislation pending. It is a very important debate because of the implications that this will have on the people of Canada.
Certainly the people of Canada have spoken loudly and the government has yet to listen. The goods and services tax is indeed a very bad tax. It is a tax that we have described as being in the wrong place at the wrong time. It is a tax which we discussed in Question Period and in previous speeches today as a tax which is just ludicrous to be imposing upon the people of Canada.
The motion before us today is one which I can support with a number of changes. The first part of the motion reads:
1) the threat to impose a new 9 per cent sales tax that is regressive, inequitable, invisible and inflationary;
While I agree with everything that is there, I would also agree with the motion if that had read 2 per cent, 1 per cent, 9 per cent, or 12 per cent. The number is irrelevant in this case. It is not a 9 per cent tax we are fighting, it is the tax we are fighting, the goods and service tax, the grief and suffering tax, as the hon. member for Kamloops said earlier.
In order to support some of the things that have been said around the country, the finance committee is looking to expand its hearings from the Ottawa area into the other cities of Canada. As you are aware, Mr. Speaker, the finance committee has decided that this is an important enough issue that it will extend the sittings to different places in Canada: Halifax, Edmonton, Vancouver. The closest that the finance committee will come to the area where I live in the constituency that I represent is the city of Regina.
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My colleague in the provincial legislature, Doug Anguish, who formerly sat in this House and is now the MLA for The Battlefords, and I together are going to have our own public hearings in the city of North Battleford on October 7. We are going to listen to the concerns of the people of The Battlefords and The Battlefords-Meadow Lake constituencies because while the finance committee considers their views to be important, the finance committee cannot extend into all parts of Canada, particularly the rural and remote areas that are probably going to be affected harder by this tax than the urban parts of the country.
We want to give the people of our constituency the opportunity to present their views to the finance committee and to the Government of Canada. I have no doubt about some of the things I am going to hear when we hold our hearing in the city of North Battleford on October 7. The types of things I am going to hear will be similar to what has been provided to the finance Committee here in Ottawa and to us in the House of Commons by way of letters and the media.
A number of the things we are going to hear about are people in the retail sector expressing their frustration with the nature of the taxes that apply to their operations. First is the consumer end of it, having to fight on the front line, defending the collection of this tax to angiy consumers who are going to be paying this tax at the front end. It is not the finance minister who is going to have to stand there and explain why this box of diapers cost 9 per cent more today than it did yesterday. It is going to be a clerk or a store owner in small-town Saskatchewan who is going to have to say: "The government needs the money." It is not the finance minister who will hear that directly from the people who need those diapers and other services and goods that have not been taxed before at the retail level.
Certainly some things have not been taxed at all before. The hospitality industry, small hotels, cafes, gas stations, dry cleaning services, hair salons, in the smaller areas is suddenly going to be collecting a tax for the federal government because it is providing services to the people of its community. They become the tax collectors, and it is not these people over here or the
5,000	to 10,000 new tax collectors who are going to be hounding them who will actually be taking the money from the consumer. The small town, rural and remote business people are the ones who will have to take the
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brunt of the frustration in the future for the strange moves of this government opposite.
I want to suggest a number of things. Earlier I had mentioned that it is not the 9 per cent but the tax of any per cent that I oppose. One of the things of which I am most scared is that this government, using the finance committee and parading witnesses in front of us, is going to try to provide a reason why, if 9 per cent is not appropriate, perhaps 6 per cent or 7 per cent will be appropriate.
We will have to broaden the base then because we still have to collect all of this extra money to pay off the deficit for the mismanagement of this government.
Seven per cent or 4 per cent attached to food now, this government tells us, will be acceptable to the Canadian people. Four years from now, that 4 per cent could become 9 per cent and it will be applied on food. We will not have gained anything by this debate and the frustrations expressed by people. All we will be doing by lowering the rates from 9 per cent to any other rate is simply forestalling the inevitable with these people on the other side of the House, and that is to have a broad based tax that is going to apply to food.
What does a broad based tax mean? We are just referring to it in terms of food, but what are the other exemptions? They are dental care, prescription drugs and those types of things that have been exempted. If we are broadening the base of this tax, we are talking about applying a tax to food, dental care and prescription drugs.
I, for one, want to be firmly on record, standing in this place, in front of all these people and anyone who is watching, as saying that I never want to see a tax on food, prescription drugs, medical appliances or heath care items of any kind at any time.
Why do we need all of this extra money? We are seeing ads from the government, and by the way, we cannot forget that the government has already indicated that it is prepared to spend $7 billion over the next two years to sell this tax to us through advertising. What is it that is causing this great need for this massive amount of money? It is not just the deficit. Do not forget that it is not that long ago that we stood in this chamber and debated the free trade legislation which was going to allow us to transfer and sell goods into the United States without tariffs. We argued then that that meant that we also would allow free access to the Canadian market for

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American goods without tariffs. That move alone cost the Canadian people $2 billion in lost revenue.
Now the Canadian government is saying that we have lost the revenue and we have to make it up, let us charge the consumers, let us charge the poor, let us charge the people of Canada so that the Americans can sell cheaper goods on the Canadian market and take away Canadian jobs. I think that is an awful situation and it is one of the things that we have to keep in mind when we are dealing with this goods and services tax and the approach that this government is taking to all of us across the country.
There are a couple of other things that I want to express, particularly relating to agriculture. This government is pushing upon the farm community in Canada a whole broad range of exemptions for farm products under the goods and services tax. I do not want to play around with the nature of the tax at all and I do not agree that you put some things on and you provide exemptions on the end. The government is forcing farmers to pay cash up front, apply for rebates in the back and then expect that they will get paid back some time down the road. It is a ludicrous situation.
The point I want to make here is that if this government believes that the farm sector is important, then exempt the farm sector completely. Do not play around with this rebate and credit stuff. Exempt the farm sector if you consider it important and forget about the rebates, the delays and the cash flow problems that this whole situation is going to create for farmers, and that includes land transfers, leasing land, selling and transfer of crops and all of that sort of thing.
In conclusion, Mr. Speaker, let me say to anybody who is thinking seriously about supporting the goods and services tax, think first about what it is that you want this tax to do. Is it to reduce the deficit? There are other ways to do that. Is it to make our trade better with the United States? There are other ways to do that. Is it to reform the Canadian tax system? There are other ways to do that and they are all much better. This goods and services tax does not address the needs of the Canadian economy. It addresses the needs of the government opposite and we have to change that. We have to do something about that. Unfortunately, for some of us it means waiting until the next election, but by golly we are
going to be there and the Canadian people are going to do that for us.


Mr. Lee Clark (Parliamentary Secretary to Minister of the Environment):: Mr. Speaker, I am happy to have this opportunity to participate in this debate today, because certainly any debate relating to the economic policies of the government and hence the economic progress of the country is exceedingly important.
I think it is important to understand, when we look at the goods and services tax or any other particular part of the whole, that this government, going back to 1984, did in fact begin to develop and has put in place since then an over-all policy designed to generate the growth of a strong economy. I think what is important is to remember that each part of this policy has been part of an ongoing program. Naturally, we as citizens have a tendency to isolate the various proposals and to see them, perhaps, distinct from the other and to forget that indeed they are part of an ongoing policy. In doing that we may not fully appreciate the benefit of each.
This plan really had three central elements. First and foremost was the plan to reduce the deficit, because we understood as a government that unless we did something to reduce both the annual deficit and, eventually, the national debt, that we as a nation would indeed be crippled in the future. I think it is important to reiterate the fact that we have made good progress in the reduction of the annual deficit which must, of course, occur before we can reduce the debt itself. In fact, since 1984 the annual deficit has been reduced by $10 billion per year. I think that figure of $10 billion per year is worth repeating because there are a lot of people who forget that it exists.
In addition, it is also important to understand that in the plan, a part of which is now before the House of Commons, there is a further projected reduction in the annual deficit of $14 billion per year to be in place by 1993-1994.
We have also made good progress with respect to our proposals to permit Canada as a country to compete more effectively in the world market. Part of that, of course, is the free trade agreement which has been place for a few months and part of it also relates to the GATT talks which are an ongoing process and which are vital to
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our future in light of the fact that we have been and will continue to be so heavily dependent on exports.
Third, as part of this plan, the government announced some time ago that it was exceedingly vital that we should have tax reform so that the policies of the government would be fair to all Canadians. It is this latter part of the over-all plan that I would like to speak about this afternoon, and to discuss where the GST fits in because it is, indeed, related to all three parts of the over-all plan.
Going back to November of 1984, Mr. Speaker, as you will recall, the government introduced what was called the Agenda for the Economic Renewal of Canada. That is when the government laid out its long-term plan describing how we would, over a period of time, put in place policies which would regenerate economic growth in this country. Within that policy framework there was emphasis on job creation, economic growth, sound fiscal management, economic efficiency and improved international competitiveness. Not only have we, as a government, followed this agenda with our economic policies, but I think we have real evidence that our plan is working. With our economic initiatives, from job creation and encouraging business investment to deregulation of energy and transportation sectors, our economic record begins to speak for itself.
The goods and services tax which by the way is a replacement tax, as I think all of us in this House understand but unfortunately which not all Canadians yet understand, is a continuation of that agenda, part of a plan to build a strong economy for Canada.
The 1987 White Paper on tax reform recommended that tax reform should take place in two phases. About a year ago we had phase one and today we are beginning the debate with respect to phase two. Briefly, as most of us understand, the goods and services tax which will be broadly based will replace a woefully inadequate and patently unfair 13.5 per cent manufacturers' sales tax which has been in place in this country since 1924.
I think it is important in passing to remind ourselves, and perhaps to remind Canadians, that every political
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party in this House has agreed that the manufacturers' sales tax has been a disaster and that it must be replaced.
The evidence of its inefficiency and unfairness lies in the fact that of the 75,000 Canadian businesses which are part of the manufacturing sales tax some 22,000 have separate and independent tax arrangements. That, in itself, has to be evidence of unfairness and inefficiency.
We believe that the goods and services tax will benefit, once it is in place and once we understand it, Canadians in all regions. What I would like to talk about is how the goods and services tax will impact on farmers. That is also the subject of the discussion in which my hon. friend was participating.
Most of us understand that a number of items will be exempt from that tax. One is basic groceries. The fact that basic groceries will be tax free under the goods and service tax means that Canadians will not pay any tax whatsoever when they buy them. Making food-related products tax free will ensure that basic groceries are completely free of tax. With limited exceptions, almost everything sold by farmers, as a consequence, will be free of tax.
A farmer selling livestock or crops to a food processor will not charge a GST on that sale. Food processors will not charge a GST when they sell food-related agricultural products to the food wholesaler, and the wholesaler will not charge a tax when he sells products to the food retailer. In turn, of course, the retailer will not charge a tax when he sells products to the consumer.
The only products that will be taxed in this process when sold by farmers, and they are worth noting because they are relatively few in number, are cut flowers, trees, wood, bedding plants, sod, soil, bait, horses, unprocessed wool, fur, hides, seeds and natural fertilizer, except when sold in bulk.
Like other businesses, farmers will be able to claim the input tax credit on what they buy to use in their business. Since a farmer can claim back the tax which he pays on all of his business-related purchases, whether he is buying a tractor or paying for the services of a veterinarian, it is really to the advantage of the farmer, despite the fact that there w5ill be some more bookkeeping, to participate in the GST. I would note in passing that there will also be some very real economic gain to the farmer in certain specific instances which would come to mind. Take for example the purchase of a half-ton, which is so vital on the farms of western Canada and throughout the country. Assuming a $16,000 wholesale value for that

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half-ton with a 13.5 per cent hidden manufactures' sales tax applied now, bearing in mind that tax will disappear and also that the farmer will receive a rebate on the 9 per cent goods and services tax paid on the retail price, he clearly comes out the winner, according to my mathematical calculations. On that $16,000 half-ton I think he would stand to gain some $2,160.
When he pays the telephone company for his service he will claim the tax back. Because the farmer has the option of reporting his purchases on a month-by-month basis he will virtually be in a position where there will always be tax owed to him. Therefore I do not believe, once the first two or three months are gone by, that the cash flow crisis about which some people have spoken will indeed be significant to that farmer. I would also remind the house that the farmer will also be in a position, should the rebates not be returned as quickly as he would wish, to receive interest on that after some 21 days.
The farmer is in a good position even when he sells his land because as long as he sells his land to an ongoing farm operation tax would not be applied. Even if it is sold in part the purchasing farmer would be eligible for the rebate. Should he sell his land to a developer, should it go from an agricultural to a non-agricultural use, the tax would apply, and I would suggest appropriately apply. If this is part of a transfer to part of the family there will not be a tax charge.
In conclusion, I think this tax will be good, once we understand it, for virtually all regions in Canada. It will be particularly good for western Canada because of our dependence on exports and I think it will be particularly well understood and well received by the farm community because the farm community in the end, I believe, will come out a winner.


Ross Harvey: Mr. Speaker, I had actually hoped to direct this protracted question to the hon. member for Athabasca, as he is a fellow Albertan, but any defender of the government's economic policies will do.
I rise, in fact, to support the motion of the Right Hon. Leader of the Opposition and to ask a more general economic question of the hon. member, if I may, arising out, of the experience we in Alberta have had during the 1980s; two successive four-year terms, first of Liberals
and second of Tories federally, and of all Tories provincially from 1981 to 1988-89.
Let me start by quoting Statistics Canada employment earnings and hours to show you what the situation is now. In March, 1989, the average hourly- paid employee in the goods producing sector in Alberta worked 37.8 hours a week for an hourly rate of $14.80. By contrast, the average hourly-paid employee in the service sector worked 28.4 hours a week for an average hourly wage of $10.37 an hour: At the lower end of the service sector are trade, finance, insurance and real estate, and at the very lowest end are those jobs associated with tourism with a rate of pay of less than $6.50 an hour, for an average of just over 26 hours per week and a gross pay of about $172 a week. That is the current employment situation in Alberta.
What we find is that between 1981 and 1988 in Alberta employment in the goods producing sector actually fell from about 403,000 to about 342,000, a decrease of 15 per cent. Meanwhile employment in the service sector grew from about 748,000 to 845,000, an increase of about 13 per cent. The largest increase was in the services subsector, that poorer subsector, which grew from about
322.000	to about 402,000, an increase of almost 25 per cent. At the same time, the highest unemployment was experienced in the services producing industries, about 61 per cent of all unemployed in Canada, as a matter of fact.
This parallels a growth in part-time work. In 1988,
184.000	or 15.5 per cent of all jobs in Alberta were classified as part time, a growth of about 39,000 from 1981. During this same eight-year period full-time employment actually fell from 1,007,000 to 1,003,000, a decrease of about 0.4 per cent while officially recognized part-time employment increased by 27 per cent.
Successive Liberal and Conservative Governments have seen employment in full-time jobs fall, in part-time jobs rise, in well-paying jobs fall, in poor-paying jobs rise. I ask the hon. member is this the success of which he boasts?


Walter Leland Rutherford (Lee) Clark: Mr. Speaker, I am happy to have a member from Alberta ask a question, particularly bearing in mind the fact that I think the whole question of the goods and services tax in Alberta is of particular interest to the people of that province because most of them seem to not understand that indeed they have been paying the manufacturers' sales tax and that they are part of a tax-paying public whether they have been paying a direct provincial sales tax or not.
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So there is a 13.5 per cent tax that has been applied throughout Alberta and because it is hidden there has not been any accountability for that.
Without being able to comment specifically on the statistics which the hon. member has cited relating to his province, I would like to say a few words. First, with respect to the million and a half jobs that have been created since 1984 in this country, I do know that 80 per cent of them are full-time jobs, which was in fact a contrast with the situation as it was before 1984.1 find it hard to believe that that pattern would vary substantially in one part of the country from that which exists elsewhere. I think that 80 per cent full-time jobs across the country is a very important accomplishment.
I would also suggest to the hon. member that his province, like so many provinces, has been very dependent upon one or two parts of an economy. Certainly the agricultural economy has had difficulties in the last three or four years, mostly difficulties created by climate over which we have little or no control. However, I would say to. this member, as one who is very proud of what we have done in agriculture, that this party, this government, has done more to assist Alberta farmers and farmers in every other part of the country than has any other government in the history of this country.
I would also suggest to the hon. member that part of the difficulties in the Alberta economy relate very much to what has been happening in oil. If I recall correctly, his party, if not himself, because he was not here, was a very strong supporter of the National Energy Program which those two parties across the way put in place. It had a tremendous negative impact on the economy of Alberta.
I think you will see, Mr. Speaker, that certainly the goods and services tax will help Alberta because of its dependence on exports, because the manufacturers' sales tax in place now discriminates against manufacturing in Canada. It also has made it very difficult for us to export abroad because the manufacturers' sales tax has been included in the price of those goods sold elsewhere. The goods and services tax will not be charged on products being exported outside the country. That will
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help the province of Alberta. That will help all of western Canada.


Mr. Alfonso Gagliano (Saint-Leonard):: Mr. Speaker, I want to take part in the debate today because I believe that no country can have a strong economy to carry it through the turn of the century unless it follows a sound fiscal policy. This Conservative Government has totally missed the boat in the past two years. Everybody in Canada-employers, trade unions, ordinary people and major corporations alike-agreed on the fact that a real tax reform was needed. But the Government put it off, changed its mind and, as we recall, in the fall of 1984 and in the spring of 1985 the Minister of Finance told us there was no point in revamping the tax system because everything was forever changing. So all that was needed were small corrective measures to take prevailing conditions into account. But the minute he realized that the United States would be coming up with their own tax reform he decided we had to have one as well.
Even then everybody agreed we had to reform the system. So the Minister, ever mindful of the upcoming election, chose to bring in the tax reform in two stages: first stage, the income tax, second stage, the sales tax reform. I remember very well that when the Committee on Finance began studying the first stage most witnesses before the committee said we were making a mistake and that the two stages should have been considered at the same time because a sound fiscal policy has to include income and sales or consumer taxes, both fully harmonized as a whole to achieve economic recovery.
But as I said, for electoral considerations, he did the opposite and we are now looking at a tax reform, an income tax reform which does not really meet our requirements. And today here we are dealing with a sales tax refom which Canadians reject outright. We have heard about a number of polls. A couple of days ago, I think, one such poll revealed that 78 per cent of Canadians are against the TGS, the tax on goods and services. Amopg others, the Canadian Federation of Independent Business reported that 97 per cent of small businesses completely reject this tax.

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Well, the Minister of Finance may have the impression that he got through the first stage before the election by allowing the odd income tax rate reduction and that we are now prepared to swallow the second stage right after the election. If he thinks that Canadians will forget all about it between now and the next time they vote, Mr. Speaker, I would suggest he and the Prime Minister are mistaken because Canadians are not about to forget. People throughout the country are now getting organized to set off a real tax revolt. Canadians find this tax unacceptable.
Given what little time I have left, I should like to deal more particularly with small business. Just what does this tax mean to small business? It will be a total nightmare, Mr. Speaker. We now have close to 900,000 small businesses in Canada and out of these 900,000 businesses perhaps a small percentage is affected by the existing federal sales tax.
So all small businesses! And the Minister in his technical paper proposes that businesses with sales of $30,000 a year will not be affected, will not have to register for the sales tax, the new goods and services tax. Mr. Speaker, I think that is really a joke. Think of what $30,000 is worth today and what it will be worth in 1991.
So in fact all small businesses will register for this tax and we have reason to believe that the 4,000 public servants-and I do mean four thousand, Mr. Speaker- whom the Department of Revenue will employ just to administer this tax will not be sufficient.
Imagine the anxiety of Canadian small business people now, because they do not really know what to expect; it is complex.
An item may be taxable or it may not be. The new system the Minister is proposing to us will make items taxable not according to what they are but depending on the establishment and the origin of the establishment.
Mr. Speaker, imagine the complexity. Big business, banks and big corporations will not have problems because they have management systems, fairly sophisticated accounting systems that will enable them to carry on.
The Minister defends himself, as we saw yesterday when he tried to answer my question, by saying they have provided two simplified accounting systems.
With your permission, Mr. Speaker, I would like to say what John Bullock, president of the Canadian Federation of Independent Business, thinks about these two simplified systems.
I am quoting John Bullock, president of the Canadian Federation of Independent Business. He said that nevertheless, the simplified accounting methods proposed by the Government are even more complex than the rest of the system.
He said that on September 9 in The Ottawa Citizen. So much for simplicity, Mr. Speaker. We know very well from Mr. Bullock's testimony that the extra administrative costs for Canadian small businesses will be from $1,000 to $3,000, depending on the additional equipment they will have to buy, a new cash register or whatever.
Mr. Speaker^ the $600 the federal Government proposes to compensate small businesses is not adequate and several witnesses have asked that this amount be increased.
During the past five years in the House, Members, and especially Government Members, constantly said how pleased and proud they were of small businesses which generated between 80 and 85 per cent of our employment. I am also proud of these small businesses, Mr. Speaker, and I have always been a staunch defender of small business. Today, however, these people are afraid. Canadians who would like to start a new business are now afraid to do so, because of this nightmare of a new tax, the GST. Jobs that would otherwise have been created will not materialize.
Last night, Mr. Speaker, we heard that apparently, Canada's tourism industry will lose at least 30,000 jobs. Mr. Speaker, 30,000 jobs will be lost because of this new tax!
When people say that the old tax-

Like the Minister used to say and still says in his speeches, "this federal manufacturers' sales tax is a killer of jobs". Well we find out that the new GST, goods and services tax, is also a killer of jobs. So what are we doing here? We are changing four quarters for a dollar and are making all Canadians miserable. New small businesses will not be created because of fear. People will say: "Why should I invest my money? Why should I risk my shirt? Why should I risk everything I worked for all my life
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when maybe a few years hence a tax inspector will walk into my business and say, 'you did not charge the tax right.'" He does not know what is taxable and what is not taxable. The businessman is going to be asked to pay the tax, the penalty and the interest and he will lose everything he has worked for all his life. That is the kind of business attitude we are creating in this country.
If we say that small business is the backbone of our economy then we should stop this madness and the minister should withdraw this project immediately. He should go to the provinces, negotiate, and have one tax system in this country once and for all so that everyone can understand and we can have some business activity that makes sense.


Mr. Deputy Speaker:: Resuming debate. The Hon. Member for Richmond-Wolfe (Mr. Cote).


Mr. Yvon Cote (Richmond-Wolfe):: Mr. Speaker, sales tax reform is essential, as I see it, and is part of the Government's plan to provide for a better economic future for Canada.
One of the major obstacles to achieving this objective is our increasing national debt.
Before discussing the goods and services tax the GST and how it works, I would like to talk about our national debt.
Everyone agrees that this debt is a national problem. Controlling the debt is a challenge that is national as well, and what we need is a national commitment, if we are to meet this challenge and overcome this obstacle.
Borrowing money, having debts is not necessarily a bad thing. If I want to buy a house, I have to borrow. Borrowing is, in itself, dynamic. It is not necessarily risky as long as we are able to meet our monthly payments.
Ongoing debt, however, is a problem. If I am unable to meet my monthly payments on the house I just bought, I go into debt. If I borrow money to buy more goods, I accumulate more debt which I cannot repay and I end up with my back against the wall.
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Being in debt is a problem. It has been Canada's problem for the last 25 years, and a problem for private individuals and businesses as well.
When your debts are too high and interest payments are high as well, then the situation becomes extremely difficult.
Public debt has existed since the beginning of Confederation, but it was not until the past 20 or 25 years that our debt took on astronomical proportions.
Since 1970-1971, the federal Government has spent annually more than it receives in revenue. This takes us back to the monthly mortgage payments I am unable to meet on my house. Those missed payments become a debt.
Briefly, the Government has had an ongoing deficit since that time. In order to deal with these deficits, we and our successive predecessors had to borrow. The cumulative result of all this borrowing has become what is referred to as the national debt, which today totals $320 billion.
Imagine what this means in interest payments alone! Thirty-one cents of every dollar of revenue received by the Government is used to service the debt.
Last year, interest payments alone represented $1,300 per Canadian citizen. Men, women and even children were in debt. This means average of $5,000 per family or $400 per individual, per month, the equivalent of a very substantial proportion of the rent or mortgage payments we all have to pay. This cannot go on. We are now with our backs against the wall. But in order to reduce the debt to a manageable level, we have to reduce the annual deficit. That is exactly what we have done since 1984.
At that time, in 1984, the deficit was $38.3 billion. Just for the fiscal year ending in March 1989, provisional data show the deficit was $28.7 billion, which is $200 million less than forecast in the April budget projections. So we have reduced the deficit by some $9.5 billion from the 1984 level. That means that every year, we have reduced our expenditures by $10 billion, maybe not to spend on the extra services we would like, because there is always the total debt to consider, but we have already reduced the deficit, which stood at $38 billion, by $10 billion.

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This deficit reduction has thus slowed the growth of the public debt. In the last fiscal year, for the first time in 15 years-yes, fifteen years-the debt increased by less than 10 per cent. That is a good performance, compared to the peak of 24 per cent growth in 1984.
But our objective is to reduce our borrowing requirements to zero by 1993-94, and that is a major challenge. It means wiping out the whole $28 billion deficit we still have. Using the same accounting methods as the United States and Great Britain, we would then have what is called a balanced budget.
Our overall success with deficit reduction since 1984 is due to tighter control on all expenses in all areas. First, we cut public expenditures. Second, we overhauled the whole tax system. Finally, we made structural changes to help the economy function more harmoniously and productively, without too much government interference.
Expenditure restraint, Mr. Speaker, was and is a major part of our debt control program. I heard people say, not only today but for several weeks, that if the government reduced its expenditures, they would not be so unhappy about paying taxes. Well and good. Everyone is for cutting expenditures instead of raising taxes. But in fact, that is just what we have done, restrict and decrease government expenditures, not just a little, but a lot.
Let's take a closer look. Consider what has happened. We made cuts in every area of public spending. A lot of people say: Make cuts in the public service. Cut property. Cut buildings. Don't forget we reduced grants to businesses, like incentives for the petroleum industry. We also cut funding for Crown corporations, including The Canadian Broadcasting Corporation and Canada Post. We did that. We also reduced spending on defence and foreign aid. A lot of people are criticizing us for this. So where should we cut? We had to do something. We also made changes in our programs for income transfers to individuals. People on high incomes now have to return part of their old age security pension and family allowance. The list of cutbacks does not end there, and it will continue to grow. In fact, many of these decisions were extremely difficult to make. But they were necessary, and we made those decisions. In fact, it is all part of a government's responsibility to manage the well-being of the entire community. Of course, this requires sacrifices
on the part of certain sectors of the population, but this Government has shown in the past four years that it is able to act responsibly.
Spending cutbacks have been very visible in government operations. Last year, spending on government operations was less than it was when we took power. In four years have we cut government spending to a level even lower than it was four years ago. What a performance!
We managed to do so by imposing severe budgetary constraints on the departments. We sold surplus public property. We cut the Public Service by 12,000 person-years. There again, people are saying: Cut, cut! However, we cannot keep on cutting. We must maintain our services and the people who manage them. Nevertheless, we managed to cut 12,000 person-years. We spent $1.7 billion on government operations last year 10 per cent less compared with 1984-85. Many businesses would be delighted with those results. And we are determined to continue to identify and deal with any instances of taxpayers' money being wasted.
We have been able to keep program spending increases down to an average of only 3.5 per cent annually, since we came to power. This increase is less than the inflation rate for the same period. Last year-an election year-we kept increases in program spending down to 3.1 per cent. In comparison, spending by provincial governments increased 6.5 per cent. Once again, what a performance!
These measures, Mr. Speaker, made it possible to reduce program spending from 19.5 per cent in 1984-85 to 16 per cent, in terms of last year's gross domestic product. Further reductions will be achieved this year and in the years to come. Without our budgetary restraint measures, program spending this year would have been $22 billion more than it is today.
When we look at the deficit, we must consider the spending aspect and, of course, taxes. Nobody likes taxes. Nobody wants to pay taxes. But even if we don't like taxes, we know we have to pay them, and that is how we should approach the proposed goods and services tax.
The first stage of tax reform was done with this in mind. The second stage is the one we are talking about today. Canadians must understand, Mr. Speaker, that government is a service that must be paid for. Of course, the Opposition tends to be alarmist in its statements, but
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I think, Mr. Speaker, we should point to all the information that has been made available.


Mr. Rocheleau:: Mr. Speaker, I have a question for my colleague the Hon. Member for Richmond-Wolfe (Mr. Cote). It is not a matter of being alarmist, Mr. Speaker, it is a matter of fact. I happen to know that we in Canada have certain taxation problems. Corrective steps must be taken. I would think everybody in the House is aware of that. But, Mr. Speaker, what has me seriously concerned about the TGS announced by the Conservative Government is that 75 per cent of Canadians have indicated in no uncertain terms that they are against this tax on goods and services, and what has me even more worried, Mr. Speaker, is that Quebec is one of the provinces which will be hardest hit by the 9 per cent tax on goods and services. So here is my question to the Member for Richmond-Wolfe.
You in the Conservative Government have always sought to reach a consensus with the Canadian provinces, so how is it that in this case, barely a few weeks ago at the federal-provincial conference held in Quebec City, all Canadian premiers unanimously spoke against the tax on goods and services? Yet the Canadian provincial premiers are your partners and you have to try to reach a consensus with the provinces concerning provincial or federal tax issues. So I would like to know what our colleague thinks. Since everybody is against it, can the Government not realize it is taking the wrong approach with respect to the kind of tax it wants to impose on Canadians?


Yvon Côté: I am amazed Mr. Speaker that the Hon. Member's assessment of the situation is that of a total opposition. If he was attending the hearings or reading the submissions, he would realize that everyone of those who have appeared up till now supports the principle of the GST, because it is a fair and equitable alternative to another tax, the manufacturers' sales tax, which indeed was unfair. What you should know is that all the witnesses are suggesting to the Government through the Committee, of course to perhaps propose alternative implementation mechanisms than those tabled in a working paper which indeed we are discussing.
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When you also suggest that there is no unanimity among the provinces, I can indicate that if there is no unanimity between themselves, there is no lack of it as far as discussions with the Canadian Government are concerned. There is rather more unanimity between provinces, but as to that the discussions are continuing.
The third matter raised by the Hon. Member, Mr. Speaker, is that alarmist sentiment. And I must submit that the Hon. Member used the right word because the discussions that are now going on are alarmist indeed to the extent those fears are expressed by the Opposition. It is clear people oppose this if the surveys you are referring are to be believed. But as I said to the extent the discussion is proceeding in a cold, dispassionate manner, my appreciation is altogether different and witnesses appearing before the Committee have very supportive views indeed.


Hon. William Rompkey (Labrador):: Mr. Speaker, I rise in this debate to talk about browbeating. I would like you to give me some latitude, Mr. Speaker, because I believe this is relative to the goods and services tax that the government plans to introduce.
I would like to read an editorial from the Winnipeg Free Press. It is entitled: "Browbeating Newfoundland".
The Prime Minister last week sent one of his top underlings to tell a press briefing that Newfoundland's second thoughts could threaten not only the Meech Lake Accord but all federal-provincial agreements and, indeed, the very international order. If Newfoundland could change its mind about Meech Lake, he warned, no agreement between governments could stand. The federal-provincial agreement to develop the Hibernia oilfield off the shores of Newfoundland would be at risk; so could fisheries agreements with the United States.
This was an unprecedented move by a senior official of the Government of Canada warning Newfoundland, saying to Newfoundland: "You be careful or otherwise you're going to be cut off." I have never seen such shameless intimidation in the 17 years that I have been in the House of Commons.
I want to tell the members of the House of Commons the context for this intimidation. This is a province that has been warned to behave itself, a province which has already suffered immensely, immeasurably, at the hands of this government. It is a province, first of all, that has seen its fish stock, its very lifeblood, threatened. The crisis that we see in the east coast fishery now is unprecedented. And we began as a fishing province, Mr. Speaker. That is what we are all about. That is what our

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people do. That is why they are there in the first place. Those people who say: "Why don't you do something else?" really don't understand the situation at home. Our people fish, and yet the fish stocks are in crisis as a result of the mismanagement of the Government of Canada. They are the government; they bear the responsibility.
In the midst of this crisis on our very doorsteps, at the heart of our very livelihood, the Government of Canada says: "At this time, Newfoundland, Labrador, we intend to change the unemployment insurance system in this country" which is the safety net that fishermen and plant workers have used as an income support program since the days of Jack Pickersgill.
At the time the fishery, the main industry, is in crisis, the Government of Canada says: "We're increasing your premiums. We're withdrawing from the unemployment insurance plan. We're cutting back on the number of weeks of benefit you can draw. That's what we're going to do for you in a time of crisis." There is no compensation plan, as was provided for the farmers of Canada. There is no plan for managing the stocks. They are cutting back on the safety net on the unemployment insurance plan which is the safety net for plant workers in Newfoundland. That is number two.
The third thing the Government of Canada did was to short change the east coast in terms of regional development. I want to read from The Ottawa Citizen of September 13. This is a study commissioned by the Atlantic Provinces Economic Council-not a Tory rag, not a Liberal organization, not an NDP organization. It is the Atlantic Provinces Economic Council. Do you know who did the study for them? Decima did the study for them, the polling agency of the Tory party. The polling agency of the Prime Minister did a survey for the Atlantic Provinces Economic Council and here is what they found:
-federal industrial assistance to the Atlantic provinces has fallen to such an extent that in 1987 it was, per capita, below the national average.
Let me repeat that for the record. It is important. This is a Decima survey.
-federal industrial assistance to the Atlantic provinces-
Remember regional development? Remember DREE? Remember co-operative federalism? Remember a kind Canada, a sharing nation? Remember reaching out to the underprivileged and the underdog and those who had less? Remember that? Here is what Decima says:
-federal industrial assistance to the Atlantic provinces has fallen to such an extent that in 1987 it was, per capita, below the national average-
The business-funded economic research council found that federal assistance to Atlantic Canada amounted to $1,045 per person.
That compared to $229 per person in the rest of Canada and $302 per person for all of Canada.
I have not got time to dwell on that point, but it is point number three.
On top of that the government wants want to bring in a goods and services tax. It wants to put that on top of the tax that already exists. Do you know what the tax is in our province right now? It is at 12 per cent. It is the highest sales tax of any province in Canada, a province which has the lowest per capita income in Canada and the highest unemployment rate in Canada, and no alternatives to an industry that is threatened.
You want to think about the context of this, Mr. Speaker, to see what is happening. What does that mean? It means that the sales tax in our province, the composite sales tax is going to be something like 22 per cent or 23 per cent. That is bad enough, but I want to sketch in for you if I can, Mr. Speaker, the effect of this on the north. This does not just apply to Labrador, which is the northern part of our province, it applies to the north.
Here is a letter from the Labrador West Chamber of Commerce-now get this, my colleagues from Montreal- "While the cost of freight is a very real portion of our 22.5 per cent of higher-than-Montreal cost there are several other real factors. Remember, freight is going to be taxed. Not just the goods in northern Canada are going to be taxed, but freight is going to be taxed. It was not taxed under the manufacturers' tax. It was not taxed before, it is going to be taxed now.
In addition to freight, vehicles take a severe beating from the intensely cold weather. Heat is costly because of such winters. Wages are high because of higher living costs. One of those high living costs is medical. When surgery or dental work or special treatments forces us to
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travel to St. John's or Montreal, only a small portion of the necessary travel expenses comes back in reduced personal taxes.
The letter states: "I experienced a dose of this when my wife had open-heart surgery in Montreal. It cost me thousands of dollars to stay with her until she was out of danger and then to visit her weekends until she could be flown back to Labrador City. My costs were in no way tax deductible. They were just part of the high cost of living in Labrador West."
Those things are going to be taxable from now on. What is going to happen to people who live in the extremities of this country, to marginal people who have no alternatives? What is going to happen to them? There are no answers for these people. There are no answers for the people in Canada's north. There are no answers for the Inuit who live in Inuvialuit or Thompson, Manitoba, or northern British Columbia, or Dawson City in the Yukon. What are the answers for these people? What is the plan of the Government of Canada to alleviate the position of those people? Does it understand what is going to happen in 1991 when the sales tax comes into effect?
I have tried to tell you, Mr. Speaker, and I have got two minutes left, of what is going to happen in our province. What is going to happen? Not just a browbeating that Mr. Specter threatened on the Government of Newfoundland if they did not play ball-not just a browbeating. They are not going to do anything to help our fishery, as far as I know. They have not told me what it is. They are going to cut out our unemployment. They are going to gut our unemployment insurance scheme. They are allowing regional development funds, according to Decima, to fall down. Now they are imposing a sales tax on us in the north, 20 per cent higher than Montreal, a composite sales tax of 24 per cent. That is not a browbeating. What they have said to Newfoundlanders is: "We are going to knock your head off. We are going to knock your block off". That is the attitude of the Government of Canada in this case.
I plead with the members of the House to understand that in regions of this countiy and in the northern part of this country there are vulnerable people. If the government goes ahead willy-nilly, no holds barred, no alterna-
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tives with this tax, we will be at risk. Not only will our livelihood be at risk, but our homes, communities and families will be at risk. I say to the Government of Canada at that time it will be accountable.


Mr. Reid:: Mr. Speaker, it is a pleasure to have this opportunity twice in a day, and particularly with my hon. friend from Labrador. I only have five minutes, unfortunately. As he knows, I probably could go on forever. I will try to be brief and respond to the four main points that he makes.
To suggest that the fish stock problem in Canada is the responsibility of this government or, if I may suggest, any one government, shows that the the hon. member is not recognizing the complexity of the situation that led us here and, I fear, the complexity of the problem that we face and the solutions that we need to address them.
Make sure that the hon. member and all hon. members recognize, as has been made clear in the House since the spring of last year, that this government sees the fish problem in Atlantic Canada as a national economic issue. The Prime Minister has made it such in our dealings around the world and in this country with the appointment of a committee of senior ministers and senior public servants to do two or three things. First, what really is the problem? What really will be the ramifications of that problem? What are the legitimate options that we as a government, that we as a countiy have in dealing with that problem, which first and foremost is the welfare of people and of communities? That is why this government has made this a national economic issue.
With respect to changes in the unemployment insurance system, fishermen are not affected by unemployment insurance. The changes in unemployment insurance do not affect fishermen, the only self-employed people in this country who can avail themselves of unemployment insurance. It remains untouched. The premiums, in fact, may be higher than they are today, but they will be lower than they were last year.


Fred J. Mifflin: What about the plant workers?


Ian Angus Ross Reid: The plant workers, as is the case with fishermen, the government has repeatedly implemented emergency response programs which will respond to the needs, the short-term immediate needs of the plant

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workers who have faced problems and who face problems.


John Harvard: Do you believe that?


Ian Angus Ross Reid: Absolutely, I believe that. The hon. member said that regional development has been short changed. In the last two years more money has been spent on regional development in Atlantic Canada than has been spent in the last 25 years. This year alone we are spending $500 million. In the next five years we will spend an average of $420 million, up from the previous five year average of $280 million, up from the previous five years of the government of the hon. crowd opposite of $185 million.
If that is denying Atlantic Canada the important regional development the support that it needs, then there is nothing we can ever do. Regional development is clearly a major part of an over-all economic government platform.
Very quickly, if I may, sales tax on freight is a business input. The 9 per cent is applied to the whole thing from start to finish. There is no freight on food that is taxable. The basic necessities are there. With medicine it is the same thing.
In Labrador West of all places, with the resource-based industry, with such heavy industrial capital base, this tax is of greater benefit than in most places. If we have constrained growth of $9 billion-


Mr. Deputy Speaker:: I regret to interrupt the member but I must give some time to the member from Labrador to reply.


Bill Rompkey: Mr. Speaker, I will convey the remarks of the hon. member to the Chamber of Commerce in Labrador West. Perhaps they might want him to speak and explain to them how the sales tax is going to be of benefit to them.
Even conceding to him, and, if we are going to be fair, I suppose we have to concede to him, the fish crisis just did not start last night or yesterday. Conceding that to him and conceding that maybe the responsibility for the crisis in the fish stocks has to be shared, it is not the simplest or most complex matter. One thing that is very simple is this. Any compensation package is clearly the
responsibility of the present government, the treasury benches that sit opposite.
I heard a figure of $1 billion that was announced. Indeed, that government that sits across the way, those same treasury benches, were very generous to the farmers of western Canada. The Minister of Agriculture, who comes from that area, was very generous to the farmers of western Canada. We agree that there is a crisis in the fishery and that the stocks are threatened. He says the responsibility for that is shared. Let us concede that he is right. Would he also agree that the responsibility for compensation is clearly only at the door of the present Government of Canada? Would he also agree that there has not been, so far, one cent of the $2 billion forthcoming even though people are in dire straits in our province at the present time?


Mrs. Barbara Sparrow (Calgary Southwest):: Thank you, Mr. Speaker. I rise today to participate in this debate and to talk more about regional funding as my colleague from St. John's has just mentioned and, specifically, how over the past two years this government has done more for regional assistance than any other government. I would also like to talk about western diversification and what we are doing in Atlantic Canada under ACOA as well as FEDNOR with the head office in Sault Ste. Marie.
On August 4, 1987, the government announced a major new initiative to bring the west more fully into the mainstream of national economic development, ready to respond to the changing global economic realities. Much has been done in the two years to achieve that aim.
Despite the present period of fiscal restraint, the national challenge has been to reduce the federal deficit. We are working to continue with even more energy-wise ideas and more commitments into our regional areas to make sure that they receive not just the same amount of funding as last year but, indeed, increased funding.
Western diversification has been increasing its spending. In 1987-1988 our cash outlay was $52 million. In 1988-1989 this increased to $145 million. For the 1989-90 fiscal year our Main Estimates show $287 million. Compared to actual expenditures last year, the Main Estimates tabled in 1989 provide for a $142 million increase. That is a $142 million increase for western diversification.
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Funding expectations have been very high, and in a period of fiscal restraint, not all expectations can be met, nor should all of them be met. But the government remains highly committed, as these increases for expenditures show, to major regional development, especially efforts in the west and in our eastern regions in Atlantic Canada.
The government established the Department of Western Economic Diversification in response to special needs of western Canadians. This government recognized that the economic challenges of each region of this country differ and that a new and innovative way of dealing with economic development was needed. Western Diversification and ACOA reflect this new approach.
To ensure success Western Diversification's mandate was kept simple with three main objectives: First, to provide responsible leadership for economic development in the west; second, to undertake a strong advocacy role in order to represent western Canadian views in decision-making process here in Canada; and, third, to use widely accepted business principles in establishing a program in support of diversification. The act was passed and proclaimed on June 25, 1988.
WD has taken on a new task and its officials keep plugged in to interdepartmental policy processes here. They keep plugged in to the day-to-day processes of the government in order to ensure that the interests of western Canadians are fully considered here in Ottawa and are listened to very clearly in our offices across the west.
Western interests are also being pursued with the cabinet in a number of key areas. The main one I want to talk about is the procurement and development of national resource policies.
The Western Procurement Initiative, WPI, which was announced in July, 1988, was a specific move for western Canada. First, increasing the level of high value added. Second, discretionary procurement funding to be sourced in the west by an increment of $600 million over four years has been set aside. Third, making best efforts to designate significant portions of major Crown projects for sourcing in the west, and only in the west. Fourth, putting the full weight of the Western Diversification fund behind efforts to pre-position western suppliers so that they may be better prepared to compete for public
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sector contracts. Fourth, working with provincial governments to ensure an effective network is being put behind a supplier and in the pre-positioning of suppliers to bid on government procurement contracts.
Presently, a procurement memorandum of understanding is being drawn up with the Departments of National Defence, Supply and Services, Industry, Science and Technology, and the Atlantic Canada Opportunities Agency.
Western Diversification works with other departments. For example, it works and shares with Agriculture Canada on biotechnology and in soil conservation; with Energy, Mines and Resources on clean, low sulphur coal.
To be eligible for WD assistance, projects have to relate to new products, new markets, new technologies, increases in productivity or import replacements. Western diversification supports both individual commercial projects and systemic projects. We do not take an equity position at all. If a decision is made to invest, WD normally does through a repayable contribution. If the project is successful, the government will be repaid. If it fails, we share in the losses. There are no application forms.
We encourage entrepreneurs to come into the department with a two-page summary outlining their idea so we can sit down and discuss it before any moneys are expended with long term work projects.
Nearly 1,200 projects have been approved to date; 85 per cent of them are small businesses. We recognize and know the importance of small business in the western part of Canada. The department does not provide assistance for modernization, nor does it for expansion. We are looking for unique ideas for diversification. In the 25-month period that western diversification has been in operation there have been 6,800 projects submitted, 1,158 approved for funding, 4,006 rejected and we have 1,718 in process.
I would just like to mention a couple of small projects from my province. A small Alberta company received a $10,000 contribution toward the cost of developing prototypes for new products for the physically handicapped. Pro DentLaboratory of Calgary received a repayable contribution of $216,648. The first advanced industrial materials initiative in western Canada was launched in partnership with the Government of Canada, the Gov-

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emment of Alberta and Sheritt Gordon Limited. This is great initiative. It shows that we are working together.
This work is not all done in isolation in the west. Western diversification works extremely closely with other federal departments and agencies. We rely on it to assist us on complex, analytical or political issues.
Fundamental problems of the west cannot be resolved quickly or simply through the expenditure of government funds. Financial assistance can be effective if used strategically to help get new initiatives off the ground and to create new opportunities, in particular for the western economy.
The Budget shows the government's strong commitment to regional economic development in the coming years. Over the next five years, we expect to spend a total of $1.8 billion on regional development in western Canada. This is an 85 per cent increase relative to the $980 million spent on western regional development over the last five years. It is interesting. There is $242 million in new funding for a new federal-provincial agreement in western Canada as well.
I also want to talk a little bit about federal regional development in Atlantic Canada. To date, federal spending on regional development has been through action programs as well as through co-operative programs. During the period of 1979-84, expenditures were $185 million. During the period 1984-89, expenditures in Atlantic Canada were $282 million and during the period 1989-94, the expenditure averages are forecast at $425 million.
My colleague from St. John's East said so very clearly that Atlantic Canada has strong opportunities and strong regional support, the greatest since World War II. Take a look at its unemployment rate. As my colleague said it has fallen in P.E.I., it has fallen in Nova Scotia and it has fallen in New Brunswick and in Newfoundland since we took office.
I can assure hon. members that this government supports the Atlantic Canada Opportunity Agency. We stand behind that agency. We like what it is doing. We like what FEDNOR is doing for northern Ontario and we like what western diversification is doing for western Canada.
It has been a pleasure to participate in this debate, Mr. Speaker. I want to assure you and our colleagues on the other side of the House that there is no neglect to the regions of this country and we stand behind diversification in all the regions.


Mr. Boudria:: Mr. Speaker, I listened very attentively to the discourse of our colleague across the way and I want to ask her a question.
The hon. member spoke of regional development and of other interesting issues. More specifically, I want to know whether she is in favour of the goods and services tax, first, as is presently proposed by the Minister of Finance. Second, I want to ask her about the following: The Minister of Finance said today that the goods and services tax was a component of the government's program to lower the deficit.
Given that the Minister of Finance said on June 18, 1987 that this tax would be revenue neutral, I wonder whether my colleague can tell me how a revenue neutral tax can possibly reduce the deficit.


Barbara Jane (Bobbie) Sparrow: Mr. Speaker, I was just opening the technical book on the goods and services tax. I do believe my colleague's first question had to do with whether I was in favour of the proposed goods and services tax.
I guess you have to understand where we are coming from and maybe it takes time to explain that what we have in place, the federal sales tax, or the manufacturing sales tax, was initiated in 1924 when 85 per cent of the employment was in the manufacturing industries here in Canada and actually less than 10 per cent, probably about 8.5 per cent employment was in the service industry.
Life has changed as obviously we have evolved over the last six decades and we are now in an era where over 70 per cent or 75 per cent of the people in Canada are employed in the service industry rather than what I would call the manufacturing industry or the resource industry. So that has changed completely.
In 1924 there was a tax applied on manufactured goods only, and that was applicable at that time. But today life has changed and we have a average 13.5 per cent tax applied to the manufacturing industry. This is not fair. This is why our Minister of Finance is moving to broaden the base and to bring in other industries and services so that we are all treated equally, and it is an equitable position. Yes, I am in favour of a goods and services tax,

but we have to have a package. If we want to have certain exemptions, basic foods, health care costs, certain dental care services, municipalities, universities, schools, hospitals, and certain legal fees exempted, and so they should be, then we need a 9 per cent tax.
The Minister of Finance must have a 5.5 per cent rate if he is to obtain $18.5 billion which is raised today from the old, archaic, obsolete tax. We have to have the $18.5 billion.
The Minister of Finance is going to implement a goods and services tax credit that will assist lower income Canadians. He is going to lower the rate of tax from 26 per cent to 25 per cent for middle income Canadians. This is stated in his technical papers. If he is to have this, and if he is to have the exemptions, it works out to the 9 per cent. Therefore, if you want to lower the rate, you have to broaden the base.
The second question my colleague asked was with regard to revenue neutral. Certainly, this has been discussed quite a bit recently and I do believe some months ago the minister did mention revenue neutral.
The tax that we have today which raises the $18.5 billion has 22,000 exceptions and has hundreds of people who avoid or get out of paying the tax. There are many manufacturing companies that during their process stage would do one value-added here, and then through a subsidiary they would pass off the value-added product into another company and therefore avoid the tax. This is happening. No one, not your government when you were in power, Sir, nor this government, knows exactly how many companies are either avoiding or getting out of paying the tax. We do not know how many people we are missing out there. Hopefully, if we are missing a lot it will perhaps gain us more revenue than what the Minister of Finance said. However, if you look at the technical papers, and at the diagrams which the Minister of Finance has put in them,he shows exactly what he needs to replace the $18.5 billion, what he needs to have the goods and sales tax credit for the lower income people, what he needs to have in order to have the rate drop from 26 per cent to 25 per cent for the middle income people, and what he needs, which is the $.2 billion, for the administrative costs.
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Therefore, it probably will be revenue neutral, but if we do gain more people in the system who are avoiding it I guarantee that everything over and above is going to deficit reduction.


Brian L. Gardiner: Mr. Speaker, it is an honour to rise in the House today to speak to this opposition motion that condemns this government for its mismanagement of the Canadian economy. If anything has been shown in this debate, the last few remarks show frankly what Canadians are going to get from the' government with this tax. If any government has mismanaged the economy of this country in the last five years it has to be the Conservative government opposite.
I have some information from Statistics Canada which clearly shows that the deficit has nearly doubled since the Conservatives have been in office. That is a shame from a government that preaches restraint and preaches about running a fiscally responsible government. We know that that is not what it is doing, and we have been pointing that out in the House since we have come back after the summer break.
This government is a three-letter government. We have had the FTA, we have had the GST, we have VIA now, and now we have TAX from the Tories. That stands for tax, and what every average Canadian in this country is getting from the Conservatives right now is a Tory tax.
In the next three years, in 1992, even after they have spent all that money trying to party and celebrate 1992, the Tories are going to be RIP. That is what is going to happen to the Conservative party in three years when that election is called the next time around.
Let us take a look at just what they are doing with this tax. The other day my colleague, our party's finance critic, asked a question in the House of the finance minister. This government is spending-and I hope people at home are watching now-$7.6 million on advertising. To advertise the GST it is going to be spending $7.6 million. That is not revenue neutral.
Let us take a look at what that means to people who are at home in their kitchens now, having a coffee, perhaps watching this or perhaps watching something else, or reading about this debate. This government is spending $21,000 a day, $875 an hour of our money, of Canadian taxpayers' money, to advertise this tax which is not yet law in this country. The government has had the gall to publish and spend money on advertisements when

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Parliament has yet to approve this tax. I read Hansard when the members opposite were in opposition and the comments they made about responsible government. Well it is hogwash, and you know that, Mr. Speaker.
Let us take a look at some of the comments that members have made and some of the comments that are in the motion today. They continue to pursue a high interest rate policy. I asked some members and some constituents about this. They said: "Let us not get into detailed questions on this. There is one answer that I have to know: Does it cost me more to borrow money to buy or build a house?" Under this government the answer is yes. That is all we need to know. Under the GST we have heard evidence already that it is going to cost a great deal more.
Let us take a look at the question in terms of threatening some of our primary resource industries. We have been debating the forestry bill this week. We will be back at it again tomorrow. There is a 15 per cent softwood lumber tariff. This government sold out Canadian forestry when it signed that deal. The Conservatives have allowed American interests to tell us how to run our forests. They have no faith in our industry and that is a shame as well.
Let us take a look at some of the questions that we have been asking about tax policy, the kind of information that this government does or does not have. As you would know, Mr. Speaker, people who live in our northern or remote areas of this country depend a great deal more on the telephone and other services.
I have been approached by constituents in the Burns Lake area of my riding who ask what is happening with that tax on our long distance calls? How much is the government collecting? What is the government doing with it? So I put a question on the Order Paper, and, yes, indeed, there is an excise tax imposed on long distance telephone calls. When filing monthly tax returns, the companies do not segregate the amount of tax applicable to long distance calls. I think they should check their computers. It is very clear on your phone bill just how much federal tax you are paying on long distance calls. The minister should give the CRTC a quick call and let B.C. Tel know that if they can do it on my telephone bill here, certainly they can tell the Government of Canada how much tax they are paying on this ridiculous tax that
affects people in northern and remote communities, more than people in other communities in larger urban centres. We respect and understand that, Mr. Speaker. We do not ask for a lot. We just ask that it be fair. We are not getting fairness from this government.
Let us take a look at some other examples of regional disparities that this government is perpetuating. Let us take a look at some of the information released yesterday by the Canadian Labour Congress on statistics dealing with the Unemployment Insurance Commission. Conservatives did not do a lot in my riding in northern British Columbia for many years. We are having to do a bit of catch-up work in our riding to bring the kind of representation that I think it needs.
When you ask Tories, "Well, what did you do for this area?" they trot out Unemployment Insurance Commission statistics as examples of the wonderful things that they do for us. If you follow that to its logical conclusion, the higher the unemployment, the better the Tories think they are doing for us.
This information on statistics provided by the CSC in northern British Columbia shows that some 3,600 claimants will be losing their claim, or will no longer be eligible for UIC. That is going to come to about $24 million, taken out of the northern economy.
All I am suggesting to the Conservatives is that when you take credit for spending that kind of money on unemployment insurance payments, then you better take responsibility for any time that you take those funds out. That is going to mean a lot to the people of northern B.C. We will be discussing that in Prince George at an all-northern labour council meeting this coming Saturday because people are upset about this government. They are upset about their actions on VIA Rail and the GST, on forestry, and many other issues.
I want to wrap up a bit on some of the comments made by some members opposite about forest agreements, particularly Western Diversification. The members opposite are running around extolling the virtues of Western Diversification. Fair enough. We are on record in terms of supporting the forest resource agreements that flow out of that Western Diversification Fund. It is shocking when you look at the evidence from the minister himself. No specific date has been set for
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coihmencing negotiations on new western forestry initiatives.
In this House, members are honourable and they tell the truth to this House. What we need from this government is the truth about what it is doing, what it is going to be doing to Canadians on the GST, and what it is going to be doing to Canadians on UIC. I suggest to you, Mr. Speaker, that our statistics have shown that the Conservative party is going to cost Canadians an additional $800 to $1,000 a year. My concluding remarks on this is that when the Tory canvasser comes calling during the next election, you should ask for your money back.


Mr. Deputy Speaker:: On questions and comments, the hon. member for Champlain.


Mr. Champagne (Champlain):: Mr. Speaker, I followed with the utmost attention the comments made by my NDP friend from British Columbia, and I found passing strange his reference to the Canadian Government having let forestry down over these last few years, because looking at our record since we came to office in 1984, to my knowledge we appointed a Minister of State (Forestry). As we know, the previous Liberal government completely ignored that industry which, may I point out is among our major industries. It was moved from one department to the other Agriculture, Environment, etc.
As far as we are concerned, Mr. Speaker, we had a commitment in 1984 when we came to office. It is a fact the Prime Minister promised in 1984 to put greater emphasis at the Department of Forestry level by appointing a Minister of State (Forestry). And so we did. Moreover, Mr. Speaker, I would remind my New Democratic friend from British Columbia, a province that is foremost in the forestry area, that we increased our funding silviculture in this area by more than 300 per cent. This is concrete proof, Mr.Speaker.
I would also like to remind him that we have signed federal-provincial agreements with all 10 Canadian provinces including British Columbia. That represents over $1 billion in joint investments with the provinces, almost $662 million of which comes from the federal government's coffers.
Let's take British Columbia as an example, Mr. Speaker, since my colleague opposite seems to forget that the federal govemement has done important things in that
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province. The British Columbia agreement, with that of Quebec, is among the largest: $300 million over five years equally divided between the federal and provincial governments. That is a lot more than what the Trudeau government did.
We have given Canadian forestry all the importance it deserves, mainly in exporting provinces such as British Columbia.
Mr. Speaker, if we look closely at the Canada-British Columbia Forest Resource Development Agreement, we see that, since 1985, we have invested nearly $39 million in the forestry sector in that province, including $9.8 million for forest research and $27 million for research funded under the Forest Resource Development Agreement between 1985 and 1990.
I would also like to remind my NDP colleague that the Canadian Government, that the Progressive Conservative Government is the Government which established the Canadian Council of Forest Ministers in 1985, and it was also this Government which finalized a national forest strategy in 1987 and that all provincial ministers unanimously agreed with the federal Government to say that indeed the forest sector is important and that indeed all together we must emphasize, develop and concentrate on this issue and set this sector of economic activity in its proper perspective.
Mr. Speaker, we are talking about more than 800,000 jobs in Canada. Quite sincerely I want to say to my colleague that if we look at the performance of the Progressive Conservative Government in the forest sector since 1984 we realize that we have done a top-notch job, Mr. Speaker, because it has met the aspirations of each province and the aspirations of a sector which was badly neglected by the Liberals. Mr. Speaker, this is a sector for which we will certainly do more in the future because we will have a full-fledged forest ministry.


Brian L. Gardiner: Mr. Speaker, in the two minutes I have left to respond to the Parliamentary Secretary's comments, I will say that we are in agreement with regard to his view on the abuse of forestry by the Liberals when they were in office. In our discussion on Bill C-29, evidence was already given to the House about the current leader of the Liberal Party who came to my home town and spoke against a full department of

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forests. We are glad the Liberals have changed their minds on this.
I think a lot of the Parliamentary Secretary's strong support of a renewed forest agreement in B.C. I would be pleased to send him a petition that British Columbians are signing now to get him to endorse that petition and to join with me and members of my party to support the renewed forest agreement between B.C. and Canada. I look forward to his support of that agreement with funding that will give us the adequate kind of reforestation that we need.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 38 deemed to have been moved.
THE ENVIRONMENT-VIA RAIL CUT-BACKS-REQUEST FOR IMPACT STUDY/GOVERNMENT POSITION.
['The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 10 a.m., pursuant to Standing Order 24(1).']
William Alexander (Bill) Blaikie: Mr. Speaker, I rise today to pursue a question that I asked of the Prime Minister before the summer break actually but a question which is still very current. In fact, I had the opportunity to ask a question about the same thing today, namely, the proposed cuts to VIA Rail passenger rail service in Canada and, in particular, the way in which the environmental dimension of this decision has been ignored by the government.
On the same day that I asked the question in June, the Member for Thunder Bay-Atikokan asked the Prime Minister whether or not an environmental assessment had been done of the proposal to cut back severely on passenger rail service in Canada. The Prime Minister rose in his place and said that it was a budgetary decision and that budgetary decisions are not normally subjected to environmental assessment, thus giving the lie to all that has been said in the last many months since the Brundtland Commission report came out about the extent to which this government was taking seriously the recommendations of that commission, that all major economic decisions should be assessed for their environmental impact. Surely a decision to cut a couple of hundred million dollars from the annual subsidy to VIA Rail, and knowing that the consequence would be a significant reduction in passenger rail service, qualifies as a major economic decision.
All we are saying to the government is that if you want to be true to your own rhetoric, if you want to be true to your own commitments, if you want to demonstrate that you really have entered into this new way of thinking about the economy and this new way of thinking about the relationship between economic and environmental matter, then here is the perfect opportunity. Here is the perfect opportunity to say that the world has changed, our way of thinking about the economy has changed and our way of thinking about federal expenditures has changed and before we make any decisions with respect to VIA Rail, this time and for the first time, we will take into account the environmental externalities of passenger rail service, those things which are normally not accounted for in the regular way we do our bookkeeping vis-a-vis passenger rail service.
We have made that kind of argument before just on the subsidy level. All the subsidies to passenger rail, or for that matter rail period, are all up front, they are all in the railway's books. But the subsidies to airports, to highways, to automobile use and to buses are all hidden subsidies that are kept in a different set of books. That is one argument.
An even further argument is that there is a whole other set of books with respect to the priority of one way of transporting people over another. That has to do with the environment and it has to do with safety. We know that in many parts of Canada the highways are already too crowded. We know that in some parts it is due to deregulation and the increase of truck traffic over rail traffic. We know that there is still a tremendous rate of death on the highways as a result of this overcrowding but also as a result of a way of life centred around the automobile.
In terms of deaths caused by various modes of transportation, I remember the derailment in Hinton. We have a Hinton a week on the highways and yet no one seems to take that into account. That is one thing that should be taken into account. We ought not to make that situation worse, yet that is what the government proposes to do.
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Second, with respect to the environment, the government and its spokesmen, the Prime Minister and others, go all around the globe addressing problems. We have to reduce our use of hydrocarbons, we have to stem the greenhouse effect. We have to deal with the question of low-level ozone which has to do with exhaust emissions, not high level ozone and the depletion thereof but low level ozone at ground level. There are all these increasing global environmental problems that are related to over-use of the automobile. It is as simple as that.
Yet what do we have? Instead of a government that is really trying to address that, that is trying to make some of the difficult decisions, we have the Minister of Transport get up today and say that this is costing a lot of money. Well, it will not only cost money, it will cost us our survival as a human race if we do not start to make these kinds of decisions differently.
The Canadian people have said in a variety of ways, not just through the polls, but through the support that they have given to people who are concerned about the environment that they are willing to support policies, even expensive policies, if those policies tend toward an environmentally sustainable future. People are willing to pay for that. They are not willing to pay for the GST and I do not blame them. I would venture to guess they would be willing to pay some form of even higher taxes if they thought that they were going to be directed toward a transportation system that did not pollute or toward other environmentally sound policies.
I think the government is really missing an opportunity to show leadership here. The minister says only 3 per cent use passenger rail service. The minister cannot possibly be that stupid. I challenge the minister to try to get a seat on many of the trains that he proposes to cut.
I had an opportunity to travel on the train a couple of times this summer and I was on a train on which I could not get a seat. Yet the Minister has the nerve to say that people are not using the trains. Well, there are people who are not using the trains because they cannot get a spot on the trains, the trains are so full.
If you want to get a sleeper from Winnipeg to Vancouver next summer, you had better book now. It
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might not do you any good now, thanks to the proposal of the government, but people are having to book way ahead of time. Why? Because the trains are getting shorter and shorter. Why are the trains getting shorter and shorter? Because there is less and less equipment. Why is there less and less equipment? Because there is no investment. Why is there no investment? Because the Conservatives do not keep their promises.
There is a wonderful opportunity lost for the environment, for Canada and even for this government to show just once it was not kidding western Canadians when it paraded itself around western Canada saying that it would be the great saviour of VIA Rail. It lied, and that is the most despicable element of this, more than anything else.


Ross Belsher: Mr. Speaker, there were times, while the member was speaking, when I was wondering whether he was talking about the same question as the one he had asked a few months back in this House, but then he finally got around to the environment.
It is a misconception in Canada that trains are the most efficient mode of passenger transportation. Energy efficiency depends to a large extent on passenger levels. VIA, with its generally low occupancy rates is not nearly as energy efficient as is often assumed.
In 1980, a study on energy consumption concluded that buses, not trains, were the most energy efficient mode of transport in Canada based on energy consumed per passenger mile. Eighty-four per cent of all intercity travel is by car, 6 per cent is by bus, and only 3 per cent is done by train.
Emissions from automobiles and buses have dropped by 75 per cent since the early 1970s. In an effort to further reduce these emissions, the Ministers of the Environment and of Transport Canada recently announced a joint action plan to put in place within five years the most stringent regulations that technology will allow to control emissions from internal combustion engines that bum fossil fuels.
This tough new controls package could further reduce by up to 30 per cent emissions of nitrogen oxides and volatile organic compounds which contribute to smog and to acid rain. It could also cap carbon dioxide

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emissions which cause global warming and will reduce toxics produced by the use of motor fuels.
Federal assessments of environmental and health benefits, associated economic impacts and technological feasibility will be completed within 24 months. Regulatory proposals will begin to be published within 36 months and regulations could become effective within 48 months. Standards established in 1987 and 1988 under the Motor Vehicle Safety Act will effectively lower air pollution from on-road vehicles over the next decade.
Given the above and the small amount of intercity rail travel, any shift in rail passengers to buses or the automobile should therefore have a minimal environmental impact.



Mr. Maurice Foster (Algoma):: Mr. Speaker, on September 261 put a question to the Minister of Agriculture asking him why the government misled the Canadian dairy industry in the spring of 1988 when the Minister of Agriculture told Canadian dairy farmers that they would preserve the underpinnings of the supply management and marketing board system in this country by simply moving ice cream and yogurt and other dairy products from the tariff list to the import control list, that tariffs were coming off because of the free trade deal.
The minister said very clearly that he would preserve the underpinning of the supply management and marketing board system by simply putting these products over so that there will not be a flood of cheap surplus processed dairy products coming in from the United States. He led Canadian dairy farmers to believe that there was some arrangement with the Americans under the free trade deal, that there would not be this challenge, that there would not be a flood of these dairy commodities coming into Canada.
It was a given that under the 1955 waiver the Americans have from GATT their market was closed to our dairy producers for these commodities going into the United States. But clearly the minister, on many occasions in the House of Commons and otherwise, led Canadian farmers to believe that the import controls on these items would be protected the underpinning for the supply management system.
On June 13, 1988, in the House of Commons, in responding to a question from the Leader of the Opposition, he said:
On March 16 we gave an indication that would reserve the underpinnings necessary for the day to day operation of supply management.
The commitment was that we would move the items about which the Hon. Member might be concerned, which are now on the tariff list, to the import control list.
It is very clear. It was very believable at that time. When they did put these on the import control list and quota for the Americans on January 1, 1989, the Americans immediately challenged the GATT. About two weeks ago their challenge was sustained by a GATT panel. The final decision has not been made yet but we know where it will likely end up; the Americans will have full access to our market. If that is not a complete misleading of Canadian dairy farmers I don't know what could be more clear.
I guess the most disconcerting part of it is that we have the Minister of Agriculture, the new minister who happens to be the Deputy Prime Minister as well, trying to rewrite history. He is saying this is all just a problem with the GATT, that it was not a problem with the free trade deal. Well, what was the former minister, Mr. Wise, talking about when he made a commitment, with an election coming up, that putting these items on the import control list would preserve them.
Now we have the Minister of Agriculture saying this is not a free trade problem, this is a GATT problem. What poppycock. Here you have two countries in a free trade zone, one with a total ban on all our products going into the United States, and when the Canadian Government put these items on the import control list immediately the Americans challenged it. Clearly there was no understanding, no arrangement under the free trade deal. The former minister totally misled the dairy farmers. The new minister is trying to rewrite history saying: "Oh well, there is no problem with the free trade". If there is no problem with the free trade deal, why is it that what the former minister promised to do is not working. It was challenged by the Americans at the GATT. That is right, it was challenged by the Americans. If you had a deal with the Americans under the free trade agreement, how come they challenged it at the GATT? Because you did not have a deal, that is the problem. We have got the worst possible precedent coming at the worst possible time because some time this
September 28, 1989

winter we are going to negotiate the new arrangements under Article 11 of the GATT as to how it will protect supply-management.
The Americans have a panel decision to open the market totally for ice cream and yogurt and a whole list of other dairy commodities. They can take that into those negotiations to destroy the whole supply-management system, which is what they have been trying to do for years so they would have total access to our markets. This has just put the whole dairy industry into complete torment as to whether or not supply-management systems for the feather and poultry industry can be maintained in this country. Clearly, we are the only country in the world that I know of that uses Article 11 of the GATT to use import controls to maintain the supply-management system. So the whole system is in serious jeopardy.
Farm quotas dropped in price by 50 per cent earlier this year with some banking institutions. The value of quotas is in jeopardy. The farm mortgages on supply-management farms are in jeopardy. The whole income support system and the whole livelihood of literally tens of thousands of farmers in this country are in jeopardy because of this action and because the government did not have in place a proper mechanism to control imports under the free trade deal with the United States.


Ross Belsher: Mr. Speaker, I want to assure the hon. member for Algoma that this government remains committed to supply-management as an important part of Canadian agriculture policy. The hon. member has suggested that the recent GATT panel ruling on Canadian import controls for ice cream and yogurt represents a failure on our part to protect Canadian supply-managed producers.
I would like to remind him that it was at the request of dairy producers that we added these products to the import control list under GATT Article 11 in January 1988. To quote the dairy farmers of Canada, they wrote in November 1987: "It is imperative that the Minister for International Trade take action, without further delay, to amend the import control list-to include those products for which coverage is currently not provided".
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Article 11 is designed to allow countries to regulate imports in support of national supply management programs. Canada is a member of the GATT. We have to obey the rules, and that includes using the import control list.
The U.S., which is the largest exporter of ice cream and yogurt to Canada, complained that this action did not meet all the requirements of Article 11. The U.S. pursued this complaint under the GATT dispute settlement system. The GATT panel ruled that Canadian import measures on these products were not fully consistent with our obligations under GATT
Let us also be clear about something else. The ruling was limited to two specific products. The panel's findings have no direct implications for the chicken, turkey and egg sectors which also have supply-management systems in place. We firmly believe that our supply-management programs conform with the regulations under GATT.
With regard to the GATT panel ruling, we are working closely with the dairy industry to develop a response to the panel report. We do not intend to make any immediate changes to our dairy policy.
The GATT ruling illustrates just how important it is for us to clarify the definition and the use of Article 11 during the current round of multilateral trade talks in Geneva. The panel ruling is based on rules that were negotiated in 1947. Results of the current multilateral trade negotiations will determine the rules which will govern trade into the 21st century.
As the hon. member has pointed out, the U.S. does not allow our ice cream and yogurt access to its market, and he is right in calling it unfair. We agree that it is unfair. That is why we are actively pursuing international trade reform. We want to see fair and equitable trading rules that apply to everybody in the international marketplace.
The hon. member should keep in mind that the president of Dairy Farmers of Canada stated in a press release issued on September 22, 1989: "Following our consultation with the Minister of Agriculture and officials of External Affairs, we are confident that the Canadian Government will vigorously defend the interest of supply-management in dealing with this issue as well as within the current GATT negotiations".

September 28, 1989
Adjournment Debate
TRANSPORTATION-VIA RAIL SERVICES/GOVERNMENT POSITION.


Iain Francis Angus: Mr. Speaker, I appreciate this opportunity during the adjournment debate to explain why I am dissatisfied with the government's answer to my question on VIA Rail in June of this year. I am as dissatisfied with the answers then as I am with the answers today and yesterday and the day before. Clearly this government has an extremely shortsighted view of Canada and its transportation system.
I would like to start my brief comments by quoting from a letter that was published in one of the Toronto papers. It was written by a Michael Coo of Toronto. It starts by saying:
Transport Minister Benoit Bouchard, while expressing his horror at the cost of VIA Rail to the Canadian taxpayer, went on to give his vision of Canada's transportation future-one populated with private automobiles and airplanes. I have two comments.
Bouchard says that $500 million is too much to spend (notice that the Conservatives never refer to this money as an investment) on a transportation service that is used by only 6 per cent of the Canadian travelling public. He claims that airlines, cars and bus companies all recover more of their costs than do the trains of VIA Rail. Our transport minister can only make this claim because some serious social costs are not factored into this deceptively simple equation.
He goes on to say:
There's the cost to the Canadian taxpayer, for example, of the 6,000 people who die in traffic accidents each year; and the 60,000 others who are injured. Imagine the equation if these costs were included. And that is strictly economic. It does not cover the emotional trauma of the friends and relatives of the victims.
Let me deal with that for a moment. We have a number of modes of travel in this country. Rail is the safest method of moving people from place to place. It is the most efficient in terms of fossil fuels. It could be made more efficient by electrification of the lines which would also reduce the impact on the environment and increase the speed. While the most environmental friendly method of moving people and goods is marine transport, in terms of land transportation, rail is the most environment friendly.
The next most environmental friendly mode is air travel. It only creates four times the amount of pollution as trains do in Canada. These are Canadian figures done by the Department of Transport.
The transportation mode with the most negative impact on the environment is automobiles. They contribute 17 times more carbon dioxide to the atmosphere in Canada than all of rail travel, both passenger and freight.
When this writer talks about an investment, and he talks about it in the context of an investment in safety, we also have to talk about it in the context of the investment in the future of this country and this planet in terms of minimizing our abuse of the planet we live on. Rail travel is a key element. So when we talk about the cost to the taxpayer, it is cheaper for us to provide a subsidy for a rail passenger service than it is for us to spend billions upon billions of dollars to promote road travel through the construction of ever larger highways, with more ribbons of concrete and asphalt from coast to coast. We have to keep that in mind when we talk about the cost.
That is not to say that we have to accept what VIA is doing and I, for one, do not. VIA was saddled with a situation, in reality, that was designed to fail.
I am sure the hon. parliamentary secretary will agree with me when I say that the reason his government has the ability to do what it intends to do about VIA Rail is because of the lack of legislative framework and the lack of investment by the previous government.
The Minister of Transport talked today about the billion dollars that has been poured into VIA Rail over the last number of years. I agree with him, a lot of it has been wasted because we have been repairing junk. We have been trying to keep junk on the rails, as opposed to what this government promised it would do in 1984 when it got elected. It did part of it. It restored some of the routes that the Liberals had cut. Now the government is going to cut them again. It bought new locomotives. Unfortunately, the new locomotives have to be hitched on to old locomotives which can provide the heating and the power for the junk that is being hauled behind them. What the government did not do was to buy the new rolling stock.
The former Minister of Transport, the Hon. Don Mazankowski, worked with VIA. VIA worked with the Transconsortium. Bombardier and UTDC CanCar came up with a design and a price. The government said no, it was too expensive. Transconsortium came back to the government and said, "Okay, we understand you have money problems. We will finance this operation. We will finance the construction of new equipment for VIA Rail and lease it to you". What did the government do? It said

no. This is the privatization government. It had an offer that it should not have refused but it did.
I realize my time is very tight. Let me conclude by saying that my party is not going to stop until we convince the government that what it is doing about VIA Rail is wrong. It is wrong environmentally. It is wrong socially. It is wrong economically because the cost of shutting down VIA Rail will cost more than what is going to be saved by reducing the subsidy levels.


Ross Belsher: Mr. Speaker, on May 3 of this year VIA Rail Canada was given new reference levels and was asked to submit to the government a new business plan which would respect new budget realities. This business plan was submitted, as requested, on June 30, 1989, and is currently under consideration. An announcement will be made in due course.
I would remind the hon. member opposite that Canadians are currently faced with a national debt which costs us $90 million a day. The subsidy paid to VIA Rail has
Adjournment Debate
increased steadily. It now exceeds $600 million yearly. Indeed, in 1988 alone this subsidy cost taxpayers $1.5 million a day, or $100 per passenger.
We simply can no longer afford this drain on the public purse, particularly since ridership has decreased by 20 per cent since 1981. In fact, rail passenger services currently retain only 3 per cent of the total Canadian intercity passenger traffic.
With 84 per cent of Canadians travelling by automobiles, and goodness knows Canadians have a love affair with the automobile, I believe that the message is loud and clear. We can no longer afford a service which is costing more and more and being used less and less.


Mr. Deputy Speaker:: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 10 a.m., pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 6.28 p.m.
[Stage Direction]
Friday, September 29,1989