1989-04-28

Mr. Charles DeBlois (Montmorency-Orleans):: Mr. Speaker, on April 20, the Supreme Court of Canada sentenced the City of Beauport, and more particularly the taxpayers of Vieux-Beauport, to pay $6.6 million to the owners of La Bastogne Restaurant and the Lauren-tides Motel, which burned in 1972.
This verdict from the highest court in the land affects nearly 10,000 taxpayers in my constituency, who will each have to pay from $400 to $1,200.
As Mayor Jacques Langlois said, this decision shows how urgent it is for the Government of Quebec to determine more clearly and precisely what responsibilities municipalities have in performing the public services they owe the people.
In this regard, I call upon the Government of Quebec, which is responsible for the municipalities, to get involved quickly, to cover part of the costs and, in the longer term, to legislate so that other municipalities will not have to go through such serious situations that weigh so heavily on their taxpayers.


EXTERNAL AID
Ms. Lynn Hunter (Saanich-Gulf Islands):: Mr. Speaker, cuts to Canada's international development assistance is another broken promise to the Canadian people. These cuts tarnish our international reputation. This
Budget represents the third time in five years that Canada has shirked its international commitment to have ODA reach 7 per cent of the GNP. Before this most recent slash, Canada was surpassed by all the Nordic countries in percentage of aid to the GNP. Former UN ambassador, Stephen Lewis, said last night:
Canada has abandoned the Third World in its darkest hour.
Last year Canada achieved a seat on the UN Security Council largely as a result of support from the developing world. This Government has repaid the respect of less developed nations by drastically reducing Canada's foreign assistance, forcing debtor countries into the hands of the IMF with its Draconian economic programs. This is a withering away of a national characteristic of caring. Canada is not seen to be acting out of self-interest in the international community. Foreign aid is not a frill. It is Canada's contribution to the promotion of international stability in an interdependent world.


Some Hon. Members:: Hear, hear.


PARLIAMENTARY TRADITION
Mr. Jean-Marc Robitaille (Terrebonne):: Mr. Speaker, all day yesterday in the House, we saw the Opposition Parties defending tradition, thus leading people to believe that Parliamentary tradition comes before the interests of the Canadian people. What a farce, Mr. Speaker!
Nevertheless, Mr. Speaker, those people did not hesitate to want to take away their opportunity to speak yesterday. That is the Liberal tradition! That is the New Democratic tradition! But much more than that, Mr. Speaker, following the Chair's decision to maintain unanimous consent for the budget speech and tabling of the Budget by the Minister of Finance (Mr. Wilson), they left the House, not accepting the consequences of the Chair's decision.
They thus failed their first duty, to represent their constituents in this House. That is the Liberal tradition! That is the New Democratic tradition!

April 28, 1989
Mr. Speaker, tradition is first of all the people. The Opposition Parties in acting as they did lost the sense of the most important of traditions, namely serving the welfare of the Canadian people.
But come to think of it, Mr. Speaker, can you lose what you do not already have?


AGRICULTURE
Mr. Bob Speller (Haldimand-Norfolk):: Mr. Speaker, during the election the Prime Minister (Mr. Mulroney) and the part-time Minister of Agriculture promised that they were going to do something to help the tobacco farmers in my region. In fact, the Minister of Agriculture said:
Ottawa wants to send a strong signal to the industry that we're here
to support the tobacco producers in their time of need and
adjustment.
On at least three occasions I have stood in this House to remind this Government of its promises. I have asked for immediate implementation of the Redux Program and retroactive compensation for those who were forced out prior to the formulation of the present program. Not only has the Government delayed and ignored the problems of the tobacco industry, it is in this Budget trying to crucify them. It has proposed a tax increase of 52 per cent on cigarettes, the highest in history. In fact the $4 increase on a 200 gram tin of fine cut equals a 161 per cent increase, and the additional $1.30 in October equals a 212 per cent increase.
The Minister of Agriculture (Mr. Mazankowski) has also given notice to Canadian farmers that all current agriculture programs will be reviewed. We on this side will not stand for that. We will stand up for the farmers of this country.


THE BUDGET
Ms. Albina Guarnieri (Mississauga East):: Mr. Speaker, what the Government has tried to do in the last two days is not only offensive to the parliamentary traditions of this House, it is an offence to the personal privileges of every Canadian. Security has been breached and the public trust has been violated. What we have witnessed in the past two days is pure chicanery.
As the Government House Leader stated, this is not the time for political tactics or blatant displays of partisanship. The Government's handling of this issue undoubtedly will stand as one of the great travesties in parliamentary history.
Who knows the consequences of this leaked Budget? Who knows how many people had access to the information prior to its release, and for how long? The Government has set a very dangerous precedent for future Parliaments.
If the Government is to maintain and respect the integrity of this House, the Minister is at this time duty and honour bound to withdraw the Budget and set up a parliamentary inquiry to investigate. There is no other ethical alternative.


RELIGIOUS HOLIDAY
Mr. Jim Karygiannis (Scarborough-Agincourt):: Mr. Speaker, I rise to bring to the attention of the House the fact that this is Easter Week for all Christian Orthodox churches. Today is Good Friday, which is being observed by millions of members of this religion world-wide.
I extend my best wishes, and I am sure those of other Hon. Members of the House, to all who are celebrating this occasion, which is one of the holiest days of the church calendar. Happy Easter to all!


Some Hon. Members:: Hear, hear!


THE BUDGET
Mr. Larry Schneider (Regina-Wascana):: Mr. Speaker, this year in Regina and other parts of Saskatchewan it is expected that because of another potential drought, a slow-down in our economy, and near record low housing starts, that things may not be all that rosy. A get-tough type Budget, therefore, would not appear to be publicly acceptable.
However, I want to read a fax that I received today from Ken Gamble of Olson Regal Commercial Real Estate in Regina: "I wish to advise that the general consensus regarding the Budget, in my opinion and those clients I am in touch with, is that the correct measures are being taken and that the Hon. Michael Wilson's leadership at the Finance Department is needed in this country at this time. Good luck and best wishes in the days ahead".
April 28, 1989


AGRICULTURE
Mr. Vic Althouse (Mackenzie):: Mr. Speaker, the Budget shows that Canadian agriculture is both locked into an agreement with the United States and burdened with a Conservative Government for another four years.
The Budget provides a dismal preview of the future: $100 million cut from the federal commitment to crop insurance; an end to branch line rehabilitation; an end to the interest-free component of cash advances; an end to commodity-based loans under the Farm Credit Corporation; elimination of the Dairy Special Export Program; termination of the At and East grain and flour rates; changes to the fuel tax rebate program.
In total there is more than $200 million in cuts to agriculture. Meanwhile, farm debt remains at $22 billion, farm asset values are falling, and borrowing money for seeding is very difficult with uncontrolled interest rates.
This Budget and the Government have been a disappointment to Canadian farmers.


THE BUDGET
Mr. Jean-Pierre Blackburn (Jonquiere):: Mr. Speaker, when the two Opposition Leaders refused to co-operate and allow the House to be recalled so that the Budget could be brought down because there had been a leak, they acted in a way that is entirely unacceptable to Canadians. Messrs. Turner and Broadbent preferred to let their own interests take precedence over those of the nation. If these two Leaders had hoped to form a government in the near future, they would never have acted so irresponsibly. They are both stepping down or about to step down as leaders of their political parties, but I maintain that they showed they were incapable of acting with the intellectual maturity Canadians had a right to expect.
And yesterday, Mr. Speaker, they left the House during the Budget speech. How childish can you get! Are we supposed to take these two parties seriously?


AGRICULTURE
Hon. Ralph Ferguson (Lambton-Middlesex):: Mr. Speaker, I rise under the provisions of Standing Order 31 to point out the massive Budget cuts in spending in agriculture, the most important sector of this nation. The Government has chosen to attack the most vulnerable people in our economy and is attempting to justify these cuts on the basis of lowering the deficit, a deficit that was not cut but increased. Many of these cuts are to conform to the Government's commitments to the Free Trade Agreement. A few years ago we heard about "Sine the slasher". He has nothing on "Mike the miser".
The Speech from the Throne stated that agriculture was a drain on the nation's treasury and the Government has slashed agriculture spending by almost $400 million. It has slashed crop insurance by $200 million, grain and flour transportation expenditures by $60 million, rail branch line rehabilitation by $48 million, grain and crop advance payment programs by $54 million. The dairy farmers export program was slashed by $12 million, their Dairy Commission expenditure by $10 million and the much touted commodity based loan program of the Farm Credit Corporation was slashed by $10 million. This program was entirely wiped out.
As a result of ending the farm fuel rebate tax in December, the Government will be adding another $100 million to farm input costs in 1990, all of this at a time when farmers across Canada are already reeling from high interest costs.
This Budget has a very harsh impact on the agriculture industry in Canada.


CANADIAN BROADCASTING CORPORATION
Mr. Ian Waddell (Port Moody-Coquitlam):: In the
Throne Speech, the Government said that it would not cut cultural spending. Today, we see substantial cutbacks in funding for the Canadian Broadcasting Corporation. This is totally unacceptable.

April 28, 1989
Oral Questions

That is a $140 million cut over four years for the CBC. The result is the end of regional programming and the Canadian content goals in television becoming impossible. This is the Tory agenda, the de facto privatization and commercialization of the CBC. It is the Americanization of Canadian culture.
I call upon the Canadian cultural community and all friends of the CBC to open up their windows and yell to the Minister of Culture (Mr. Masse): "We are fed up and we will not take these cuts anymore".


THE BUDGET
Mr. Ken Hughes (Macleod):: Mr. Speaker, the people of my riding of Macleod tell me that the Minister of Finance (Mr. Wilson) is the best damn Finance Minister this country has ever had.


Some Hon. Members:: Hear, hear!


Kenneth Gardner Hughes: He has the guts and determination to deal with the biggest problem this country faces, that is, the legacy of the Leader of the Opposition (Mr. Turner), the deficit and the debt that this country carries.



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, my question is directed to the Prime Minister. I want to quote from an election speech the Prime Minister made on October 15 to senior citizens in Summerside, P.E.I. The Prime Minister will know where Summerside is. That is the community in P.E.I. that he is trying to destroy by shutting down the Canadian Forces Base.
This is what the Prime Minister told those senior citizens: "As long as I am Prime Minister of Canada, social benefits, especially those for the elderly, will be improved, not diminished by our Government".
As long as he is Prime Minister of Canada. How does the Prime Minister reconcile those words to the people of Summerside with the cut-backs in social benefits, including old age pensions, family allowances, health, education, unemployment insurance, regional development? All of these were announced in the Budget. Is this not election fraud by the Prime Minister? Is it not just another reason why the Minister of Finance and this Budget ought to be thrown out?


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, my right hon. friend will see, when he gets through reading the Budget that he declined to listen to yesterday, that social spending, including social spending for senior citizens, is increased in 1989 over 1988 and will be increased in 1990 over the previous years. All social spending in Canada will go up and that is consistent with what I have said.


John Napier Turner: There is no credibility to that statement any more than there is to what he said during the election campaign.


ELECTION PROMISES-GOVERNMENT POSITION
John Napier Turner: Mr. Speaker, my supplementary is directed to the Minister of Finance. During the television debate in French, during the last election campaign, the Prime Minister of Canada said there was absolutely nothing to prevent the Government of Canada from maintaining all its social and regional economic expansion programs. Nothing at all. The Government was going to maintain all its social programs without fail, and there was nothing in the Free Trade Agreement to prevent that.
When I queried the information, the facts provided by the Prime Minister, the Minister of Finance called me a liar. Today, as a result of the Free Trade Agreement, the Budget contains cutbacks in regional development and unemployment insurance. My question to the Minister of Finance is: Who lied to Canadians?


Ms. Copps:: Where's your mother now?


Martin Brian Mulroney: My mother is at home saying that her son the Prime Minister and the Minister of Finance are doing an outstanding job for Canada.


Some Hon. Members:: Hear, hear!
April 28, 1989


Martin Brian Mulroney: And she said, "When you see the Hon. Member for Hamilton East, give her my love".


Sheila Maureen Copps: As long as she trades in her old age pension cheque.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: The Right Hon. Prime Minister has the floor.


Martin Brian Mulroney: Mr. Speaker, the Leader of the Opposition mentioned two federal spending components: social programs and regional economic expansion. The Budget Papers show clearly that all social programs will be up by 5 per cent annually over the next five years, every single one, and that regional economic expansion programs will be up by 35 per cent over the next five years. Now that is a commitment to social programs and regional economic expansion!


IMPACT ON CHILD CARE PROGRAM
John Napier Turner: Mr. Speaker, the Prime Minister talks about his mother, and I am sure she is a wonderful woman. I am also sure that he is a son that only a mother could love.


Some Hon. Members:: Hear, hear!


John Napier Turner: During the election campaign, the Prime Minister said about the child care program, and these are the Prime Minister's words:
We will be reintroducing that legislation and passing it as soon as Parliament comes back after the election.
How can the Minister of Finance reconcile that election commitment of the Prime Minister-not an election promise but an election commitment, to use the vocabulary of the Minister of Finance-with the Budget announcement that $4 billion for child care spaces has been wiped out? Is this election deception not yet another reason why the Minister and the Budget ought to be thrown out?


Martin Brian Mulroney: Mr. Speaker, my right hon. friend mentions my mother. My mother will be embarrassed by this, but I feel I should say that she did say to me, "Brian, if I couldn't have a son like you, I'd like him to be just like Mr. Turner".


Some Hon. Members:: Hear, hear!
Oral Questions


Mr. Speaker:: The Right Hon. Prime Minister has the floor.


Martin Brian Mulroney: Mr. Speaker, with regard to child care, we began to implement the child care strategy. It is in place in regard to-the Hon. Member for Hamilton East is chuckling, but the Government is now providing $2.3 billion over the next seven years to increase tax assistance for families with pre-school children and children with special needs. These tax measures, which are a very important component of a child care program, help 1.4 million families here in Canada, low-income families. A second component is a fund of $100 million to support special initiatives to improve child care services.
I will acknowledge with regret that a third measure that had been proposed to accelerate the creation of additional child care spaces across Canada, because of the fiscal situation, we are not in a position to proceed with those measures at this time. However, the Government will act during this mandate to meet its child care objectives, and I think all Hon. Members will regret the fact that at the end of the last session, the Liberal Senators killed the child care program.


CAMPAIGN PROMISES-PRIME MINISTER'S POSITION
Mr. Jean-Claude Malepart (Laurier-Sainte-Marie):: Mr. Speaker, my question is for the Right Hon. Prime Minister.
During the election campaign, no Conservative Member of the House told seniors that some would have to return their old age security pension cheques. During the election campaign, neither did the Bouchard brothers tell families that they would have to give back their family allowance cheques.
My question for the Right Hon. Prime Minister, since his mother is with him today, is: Could he tell his mother how come he said in front of her and everyone during the election campaign, "Would I hurt my mother?" How come at the same time he lied again to seniors by not admitting that 368,000 elderly people in Canada would have to return their old age security pension cheques, which has never happened before in Canada?


Martin Brian Mulroney: Mr. Speaker, I have heard some good ones, but that tops them all!
The Hon. Member for Sainte-Marie is defending people over 65 with an annual income between $50,000 and $75,000.1 can tell you that my mother does not earn that. We are here to defend the least fortunate in our society, not the rich.

April 28, 1989
Oral Questions
The Minister quite rightly points out that this measure affecting people whose net personal income is between $50,000 and $75,000 a year will be phased in over three years. It seems to me, as the Toronto Star said this morning, that universality is not at all affected. The Toronto Star said so in an editorial. So it is a progressive measure that will help this year: the less fortunate will get more, the rich will pay more, and it is quite normal to give more to the poor and less to the rich.


Some Hon. Members:: Hear, hear.


Jean-Claude Malépart: Mr. Speaker, the Prime Minister's statement is false, and this is one more instance in which Canadians have been deceived, because there is no transfer of wealth to poor families. And don't forget that senior citizens who earn $50,000 or $60,000 are the people who built this country and who made it possible for Brian Mulroney to be wealthy today. Those are the people you are going after.
Respect for the elderly doesn't mean-


Mr. Speaker:: Your question, please.


IMPACT OF BUDGET ON THE SICK
Jean-Claude Malépart: Mr. Speaker, my supplementary is directed to the Minister of Finance. Why has the Minister decided to use his Budget to go after the sick across Canada by making cuts in the health insurance program? Why do the sick have to suffer?


Martin Brian Mulroney: Mr. Speaker, in the general programs to which the Hon. Member referred, not only will there be no cutbacks, there will be $25 billion more at the federal level that will be transferred to the provinces.
As for the question about pensions, that measure will affect about 4 per cent of 3 million senior citizens who are drawing old age security benefits; fewer than 2 per cent will be subject to full recovery; about 14 per cent of 3.8 million recipients of family allowance cheques will be affected by this measure; fewer than 10 per cent will have to pay back the full amount.
What we are doing constitutes a progressive initiative. We are taking more from the rich to give more to the poor. That is a social policy which the Hon. Member has always defended.


SOCIAL PROGRAMS
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is directed to the Prime Minister. The national associations representing the poor people of Canada attacked the Government's Budget yesterday.
A few years ago the Prime Minister said the following about the universality principle in social programs: "Our position is simple and straightforward. We are in favour of universality of social programs and it shall not be touched". That was said by the Prime Minister a few years ago.
The Government has now introduced a Budget that removes not simply a few thousand people but hundreds of thousands away from the universality principle affecting family allowances, affecting pensions, and destroying the social policies as a right of citizenship in this country. Why has the Prime Minister reneged on this fundamental commitment? Why is he taking what can only be described as a revolutionary approach to Canada's social policy tradition in this Budget?


Martin Brian Mulroney: Well, Mr. Speaker, I have heard it all. Here is a Government determined to have more resources to give to the poor and the disadvantaged and those who need it by taking it from those who can afford it most, and this is being opposed by the Leader of the socialist Party.
On this important issue this morning, The Toronto Star, no friend of the Government, stated, in regard to Mr. Wilson:
While he maintains the all-important principle of universality, Wilson proposes to tax back these benefits from those most able to afford it. While that acceptable measure only affects 14 per cent of family allowance recipients -
-and so on. The Star says it is an "acceptable" measure.
We think it is a socially positive measure.
Because my friend raised the subject of agencies dealing with the poor, I refer him to a recent statement made by the National Council on Welfare: "The advantage of the claw-back is that it saves money not by tampering with the principle of universality, but rather by increasing the progressivity of social programs. Most defenders of universality believe that benefits should be distributed in a progressive fashion-. The claw-back does no damage to universality-old age pensions and
April 28, 1989

family allowance cheques would still go out to all the pensioners and parents, regardless of their incomes- but it does reduce the net value of benefit to upper-income recipients". This allows more for the poor.


TAXATION
John Edward Broadbent: Mr. Speaker, it was not The Toronto Star, it was the Prime Minister of Canada who promised to maintain the principle of universality in social programs. The Prime Minister and ordinary Canadians will understand that if today teachers' pensions are attacked, tomorrow it will be steelworkers, after that it will be bank clerks, and the whole social policy program will be turned into a system of welfare and the people of Canada will reject a Government that does that.
My question to the Prime Minister, who so categorically abandoned another sacred trust on the floor of the House of Commons, is this: if he is so concerned about fairness-


Mr. Speaker:: I would ask the Hon. Member to put his question.


John Edward Broadbent: If the Prime Minister or the Minister of Finance is so concerned about fairness, why has the Government increased the taxes on the poor since 1984 by 60 per cent? Why is there a $1,700 increase in the taxes of an ordinary family? A man who makes a $ 100,000-gain in the stock market this afternoon in Toronto will not pay one cent of tax on that. Is that fair?


Martin Brian Mulroney: Mr. Speaker, I hope that the country will take note of the fact that, while Canada is wrestling with a very serious fiscal problem, while everyone recognizes there is a very major debt problem and the Government is standing up for ordinary Canadians, the NDP is standing up for the rich.
I want to point out to my hon. friend that these measures, as the National Council on Welfare states, and as the The Toronto Star has pointed out, maintain the universal character of these transfer programs. Everyone
Oral Questions
eligible for these programs will continue to receive his or her benefits regardless of income. Those who need assistance most will continue to retain all of their benefits. Recipients with high incomes will retain less. This preserves the social safety net and helps provide a sound financial basis for social programs into the future. Surely this is what all parliamentarians want on behalf of Canadians.


John Edward Broadbent: Under different circumstances the Prime Minister knew what was at stake. When it comes to the universality of social programs, he defended that concept. Now that he is trying to justify a Budget that puts a $1,700 tax increase on the average family that still leaves over 6,000 upper-income Canadians with no tax obligation and 80,000 profitable companies not paying a tax, he comes in with this gobbledegook, but he will not fool the people of Canada, I tell him.


UNIVERSALITY PRINCIPLE-GOVERNMENT POSITION
John Edward Broadbent: Mr. Speaker, since the Minister made the same promises, probably even to his mother, about maintaining the universality of social programs, why did he deny today everything he said about this principle a few years ago?


Martin Brian Mulroney: Mr. Speaker, we are not denying anything. In fact, the principle of universality is maintained in today's budget proposals provisions. One authority, for instance, which is no friend of the Government's, the Toronto Star, one of our big papers, stated that the integrity of the universality principle had been maintained. This measure leaves intact the universal character of these transfer programs. Everyone who is eligible will continue to receive benefits, irrespective of income. Individuals who are most in need of assistance will continue to keep the full amount of their benefits, high-income recipients will keep less. We are maintaining the social security net while helping to put social programs on a sound financial basis for the future.
Mr. Speaker, we are giving more to the poor and less to the rich. Now that is a genuine social policy!

April 28, 1989
Oral Questions


THE BUDGET
Mr. Joe McGuire (Egmont):: I have a question for the Prime Minister, Mr. Speaker. Last October 15 in Sum-merside, Prince Edward Island, the Prime Minister stated:
In the future Canada will do more not less for all of you. Our
Government is committed to social justice and fairness for Canadians.
How, Sir, can the Prime Minister reconcile that statement with the devastation he has just inflicted upon the Town of Summerside and the surrounding communities? How can he possibly justify the closure of the largest institution in western Prince Edward Island, the only military base in the province? This will have the effect of ruining the economy of western Prince Edward Island and will devastate its fragile economy.


An Hon. Member:: Shame!


Hon. Bill McKnight (Minister of National Defence):: Mr. Speaker, the actions that were taken through the Budget show the concern of our Government for the ever-increasing debt this country faces.


Joseph Blair (Joe) McGuire: For Summerside?


William Hunter (Bill) McKnight: No Government has given more consideration to the defence of this country. But to have economic sovereignty, we must address the problem of the debt at this time.
The operations and closure of some seven bases and stations and the reduction in size in seven others are made so that with those savings we can provide the men and women who continue to serve Canada with the equipment they need, while addressing the ever increasing debt which the country and the Government inherited in 1984.


Joseph Blair (Joe) McGuire: Mr. Speaker, as you know. Prince Edward Islanders are celebrating the 125th anniversary of the first meeting which led to the Confederation of this country. But how, Mr. Speaker, can you celebrate the loss of 3,000 jobs? How do you celebrate the loss of $90 million leaving our economy? How do you celebrate the death of a small community?
I ask the Prime Minister to reconsider his decision. Am I expected to be the last Maritimer to stand up and tell
my friends and neighbours, when the last person leaves Summerside will he or she please turn out the lights?


Some Hon. Members:: Hear, hear!


William Hunter (Bill) McKnight: Mr. Speaker, the Hon. Member, I am sure, has a long memory. He will realize that Summerside was there before the base was created.


John Napier Turner: Wow!


William Hunter (Bill) McKnight: That being said, in order to address the needs of Canada in fighting the ever-increasing cost of interest on a debt and continuing to provide men and women who serve Canada with the equipment needed, this Government has to take very serious steps.
The closure of Summerside and the savings resulting amount to over a billion dollars in the planning year, and that Member is a member of a Party whose Leader asked for $15 billion to be taken out of the defence budget of this country.


An Hon. Member:: In submarines not in Summerside.



Hon. Bob Kaplan (York Centre):: Mr. Speaker, my question is for the Minister of Finance. It is the position of the Opposition that a leaked Budget is a tainted Budget and must be withdrawn, whether the leak is through ministerial responsibility, irresponsibility or non-responsibility, and whether the acts are criminal, negligent or innocent.
If the RCMP investigation confirms that benefits were or might have been obtained through advanced knowledge whether or not anyone is prosecuted, will the Minister withdraw that Budget?


Mr. Speaker:: I have to point out that the Members' question is very hypothetical. The Minister may want to answer but the Minister is not required to.


Robert Phillip Kaplan: Mr. Speaker, is the Minister prepared to recognize that the Budget should be withdrawn because of the leak, irrespective of the reasons for it or whether his theory of ministerial responsibility a theory we do not accept applies to it, and how can he bring to this House a leaked Budget knowing that there can or may have been benefits obtained from it?
April 28, 1989


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, this matter has been dealt with extensively on the floor of this House in the debate that we had yesterday.
The Solicitor General has indicated that there is an investigation under way. That investigation is continuing.


REQUEST FOR MINISTER'S RESIGNATION
Robert Phillip Kaplan: Mr. Speaker, since yesterday information was given by the Minister of Energy, Mines and Resources about the state of the investigation of the RCMP, will the Minister confirm, in fact, the state of sloppiness that existed around security in the preparation of his Budget? On the basis of that sloppy security will he tell us whether he will recognize his responsibility for it and resign?


Hon. Pierre Blais (Solicitor General of Canada and Minister of State (Agriculture)):: Mr. Speaker, I am advised by the Acting Commissioner of the RCMP that all resources necessary to follow all leads on this case have been deployed.

Investigations are being conducted, Mr. Speaker, and it is entirely inappropriate to comment on them in this House.


CHILD CARE
Ms. Joy Langan (Mission -Coquitlam):: Mr. Speaker, my question is for the Right Hon. Prime Minister. In 1984 he promised child care, and he did not deliver. In the women's debate he promised child care, and he did not deliver. In 1988 he promised child care, and he did not deliver. In the Speech from the Throne he promised child care, and again he did not deliver.


Some Hon. Members:: Shame.


Joy Langan: Why has this Government broken its promise and abandoned its commitment to Canadian families and to the two million children in Canada who desperately need child care?


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: Mr. Speaker, there is no abandonment of the commitment of
Oral Questions
this Government to child care. We introduced a child care policy last year. Elements of that child care policy have been implemented, particularly the tax measures that are directed to low-income families. That is $2.3 billion. There is another element of that, which is a research fund to consider different ways of developing further child care policies.
The Hon. Member is also referring to the increase in the number of child care spaces that were part of the policy last year. We have indicated that because of the financial pressures that the Government is under, and particularly the need to control the financial debt, that must be deferred for the time being, but we are committed to introducing this legislation within this mandate.


GOVERNMENT POSITION
Joy Langan: Mr. Speaker, my supplementary is to the Hon. Minister of Finance. The Minister of National Health and Welfare has had his precious submarines sunk, and I think now the Minister of Finance is torpedoing child care in this country. Is it not a fact that with the tax breaks in this Budget the only child care commitment is to those who can afford it in this country, and those children whose families cannot afford it are left on their own to fend for themselves?


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: Mr. Speaker, I could not hear the whole of the question over the din coming from her colleagues, but I believe that she was talking about tax breaks in this Budget. There are no tax breaks in this Budget. I know the Hon. Member has not been in the House for a long period of time, but if she would look back over the past four and one-half years, we have acted to reduce a broad range of tax breaks and tax loopholes on many occasions, both within Budgets and outside of Budgets, that have benefited people in higher income brackets, corporations. In this Budget, in fact, we have introduced a large corporations tax. We have increased the surtax specifically for those people who are earning over $70,000.
There is a good balance in this Budget in trying to address a very serious problem which, if we do not address, will result in programs that we will not be able to maintain. That is the essence of what we are trying to do in this Budget.


Some Hon. Members:: Hear, hear!
Oral Questions CHILD CARE

April 28, 1989


EFFECT OF BUDGET ON NATIONAL CHILD CARE ACT
Ms. Mary Clancy (Halifax):: Mr. Speaker, my question is for the Right Hon. Prime Minister. His Government has clawed Canadian families. A new word has entered the lexicon: claw-back. They are clawing back the family allowance, clawing back the old age pension, and now they have clawed Canadian children by cancelling the National Child Care Act. Why did the Prime Minister promise that social programs were sacrosanct during the election campaign and then claw 200,000 Canadian children by cancelling the National Child Care Act?


Michael Holcombe Wilson: Mr. Speaker, let me quote again from the National Council on Welfare. The advantage of using her word, the claw-back, is that it saves money, not by tampering with the contentious principle of universality but rather by increasing the progressivity of social programs. Most defenders of universality believe that the benefits should be distributed in a progressive fashion.
Let me remind the Hon. Member that this measure is directed to senior citizens, those over 65. Four per cent of those who receive the old age security cheque will be affected and less than 2 per cent will have to pay it back. Of 14 per cent of those who receive the family allowance cheque, less than 10 per cent will see that the full amount is repaid.


IMPLICATIONS OF FREE TRADE AGREEMENT
Mary Catherine Clancy: My supplementary question is still for the Prime Minister, since the Minister of Finance did not understand the question. I am sure that the children of Canada will be reassured by the gobble-degook we heard. I ask the Right Hon. Prime Minister, is this obliteration of the National Child Care Act another attempt to give us the so-called level playing field with the United States, and make Canadian children the first victims of the Free Trade Agreement?


Some Hon. Members:: Hear, hear!


Hon. Perrin Beatty (Minister of National Health and Welfare):: Mr. Speaker, with regard to the matter raised by the Hon. Member, I would remind her-


Some Hon. Members:: Oh, oh!


Mr. Speaker:: The Hon. Minister.


Henry Perrin Beatty: Mr. Speaker, we hear this sort of noise from the Opposition. It was the finance critic-


Some Hon. Members:: Oh, oh!


Mr. Speaker:: There is a lot less noise now than there was. The Hon. Minister will answer the question.


Henry Perrin Beatty: Indeed, Mr. Speaker, it is the finance critic for the Official Opposition who said this: "Programs such as family allowances and old age security should be available to those in need". He said: "Perhaps the most effective way of ensuring that Canadians in need receive adequate amounts of support is for those who do not require such support, tax it back", said Roy MacLaren, as reported in The Ottawa Citizen of March 21, 1989.


Some Hon. Members:: Hear, hear!


Henry Perrin Beatty: With regard to child care, let me inform the Hon. Member what is in place. First of all, the child tax credit for which the vast benefit goes to the people most in need is in place. The child care tax deduction, the $100 million child care initiatives fund is in place. The Canada Assistance Plan remains in place. We expect an increase of some 20 per cent this year, in terms of subsidies for child care under CAP, and yet we see that the Party that opposed our child care Bill suddenly says we should be scrapping that and bringing back the child care Bill. It is simply not credible.


Some Hon. Members:: Hear, hear!


UNEMPLOYMENT INSURANCE
Hon. Warren Allmand (Notre-Dame-de-Grace):: Mr. Speaker, my question is for the Prime Minister. How can we ever trust the word of this Government? During the election campaign, the Government said that unemployment insurance would not be touched, that it would not be cut. Last week we quoted the exact words of the Minister of International Trade on that subject, yet in the last two weeks the Government has slashed unemployment insurance twice.
On April 11, it took out $800 million. Yesterday, the Government abandoned $1.9 billion of its commitment to that fund. How can the Government justify this savage attack on the unemployed? How can it pass the buck on this to the workers of this country? Explain that to Canadians?
April 28, 1989


Michael Holcombe Wilson: Mr. Speaker, we have had a number of questions on the changes brought in by my colleague, the Minister of Employment and Immigration. It is very clear that the unemployment insurance system has been improved by providing benefits for training to help people get better jobs and get those jobs on a more permanent basis. Surely this is the way that we should be improving the unemployment system. The Hon. Member now refers to the financing. The financing of the unemployment insurance system has been changed. It has been changed in a way that asks the employers and employees to carry the burden for the unemployment insurance system with the exception that if there is a time when the funds should go into deficit-which occurred from 1982 to 1987-the Government will stand behind that fund.
There are two key points. The first is that the rate will be at $2.25 for the next five years, which is below the rate of the last four or five years. Second, the maximum cost to the employee will be $1.40 per week.


SOCIAL PROGRAMS-CUT IN FUNDING
William Warren Allmand: Mr. Speaker, Canadian workers will not be fooled by that answer. Is this not just an attempt to create the level playing field to facilitate free trade with the United States which during the election the Government said was not necessary?
The Minister of Finance during the election campaign called the Leader of the Opposition a liar for suggesting that social programs would be cut to accommodate free trade-


Mr. Speaker:: I would ask the Hon. Member, given the time, to put his question, please.


William Warren Allmand: Mr. Speaker, I ask the Minister: Who is telling the lies?


Some Hon. Members:: You!


William Warren Allmand: Did the Minister not have this Budget up his sleeve in November?


Some Hon. Members:: Hear, hear!


Mr. Speaker:: The Hon. Member for Essex-Windsor.
Oral Questions


ECONOMIC REGIONAL DEVELOPMENT ASSISTANCE
Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, I would like to direct my question to the Prime Minister. During the free trade debate the Prime Minister said that regional development programs were safe. Now, in the first free trade Budget, the Government is slashing regional development spending by 29 per cent per year from $1.4 billion to $1 billion.
Will the Prime Minister assure the poor Atlantic and western provinces of the country that the 44 ERDAs that have run out will have their funding renewed at the present level? Will that funding be put back in place?


Michael Holcombe Wilson: Mr. Speaker, I know the Hon. Member did not stay in the House for the presentation of the Budget papers yesterday. It is possible that he missed the information that was in the Budget speech.


Sheila Maureen Copps: He caught in on Global.


Mr. Marchi:: He read it the day before.


Michael Holcombe Wilson: I refer the Hon. Member to page 8 of the Budget speech. The Government has had a tremendous commitment that has been clearly expressed in an increase in funding by 50 per cent in the previous mandate. Over the next five years that level of funding will increase by 35 per cent above what it was in the last five years.


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: The Hon. Member understands, I think, the importance of the federal Government debt. We must get that debt under control. In facing that we have found the right balance to continue our commitment on regional development spending and at the same time get the debt under control.


Some Hon. Members:: Hear, hear!


FINANCIAL SUPPORT BY THE GOVERNMENT
Steven W. Langdon: Mr. Speaker, I have a supplementary. The Province of Quebec now has twelve general agreements that will expire by the beginning of next year. Is the Government committed to providing financial support equivalent to the funding provided under these agreements? Is it a promise?

April 28, 1989
Estimates


Michael Holcombe Wilson: Mr. Speaker, I answered this question in English but I think it is necessary to repeat our commitment to regional development. During the past four years, we have increased our commitment to regional development by 50 per cent, and during the next five years, regional development will be up by 35 per cent. This is very important for the provinces, and I think it is very important to understand that within the next few weeks, the ministers-

I will repeat it in English. In the next few weeks Ministers will be sitting down with their provincial counterparts to discuss the renegotiation of any regional development agreement.


Some Hon. Members:: Hear, hear!


BUSINESS OF THE HOUSE
Hon. Herb Gray (Windsor West):: Mr. Speaker, I rise on a point of order. I want to address to the Government House Leader the usual question about the business the Government intends to call over the next seven days. For obvious reasons this question could not have been put yesterday. I am sure the Government House Leader would love to have the question put to him and give his answer.


Hon. Doug Lewis (Minister of Justice and Attorney General of Canada):: Mr. Speaker, I want to indicate to the House that on Monday it is our intention to commence second reading of the borrowing Bill and to continue the same on Tuesday if in fact it is not finished on Monday.
On Wednesday it would be our intention to resume debate on the Budget as the second allotted day.
If I may I would like to point out a complication with the House order under which we are operating today. It states:
That, immediately upon the completion of the speech by the New Democratic Party speaker, but in any event not later than 3.30 o'clock p.m., the Speaker shall adjourn the House until Monday, May 1, 1989, at 11 o'clock a.m.
I want to point out that the usual provisions which apply with respect to extending the day would be foreclosed by that 3.30 time. It was not the intention of the Government nor of the Opposition House Leaders when we drafted the order to in any way curtail the remarks of the lead speaker for the Liberal Party and the Member who is speaking on behalf of the New Democratic Party. I want to indicate at this time that we on the Government side would be prepared not to see the clock in the event that those remarks are not completed by 3.30 p.m. in order to allow for them to be completed.


Herbert Eser (Herb) Gray: Mr. Speaker, on behalf of the Official Opposition I am prepared to agree to that proposal provided it is understood that no one else will be given the floor after the conclusion of the remarks of the spokesperson for the New Democratic Party.


Mr. Nelson A. Riis (Kamloops):: Mr. Speaker, I want to thank the Government and the Official Opposition for their courtesy.
I also want to take this opportunity while I am on my feet to say this. We are assuming that since the comments in terms of the questions of privilege raised yesterday cannot proceed today because of the special order, we will be able to resume those comments on Monday, and that we will be following the points in that order for today's business.


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


Some Hon. Members:: Agreed.


MAIN ESTIMATES, 1989-90
[Stage Direction]
A message from Her Excellency The Governor General transmitting Estimates for the financial year ending March 31, 1990, was presented by the Hon. Robert de Cotret (President of the Treasury Board) and read by Mr. Deputy Speaker to the House.
Hon. Robert de Cotret (President of the Treasury Board):: Mr. Speaker, I would like to table in support of the Estimates, Part I, the Government expenditure plan. I will table with the Clerk of the House on behalf of my colleagues Part III of the Estimates consisting of 84 departmental expenditure plans. These documents will be distributed to members of the standing committees to assist in their consideration of the spending authorities sought in Part II of the Estimates.
April 28, 1989

I would also like, if I may, to move pursuant to the provisions of Standing Order 81(6) that:
Main Estimates for the fiscal year ending March 31, 1990, laid upon the Table this day, be referred to the several standing committees of the House as follows:
Since there is a detailed allocation of the Estimates to various committees and the list is lengthy, if it is agreeable to the House, I would ask that the list be printed in Hansard as if it had been read.


Mr. Deputy Speaker:: The House has heard the suggestion of the Hon. President of the Treasury Board (Mr. de Cotret). Is it agreed?


Some Hon. Members:: Agreed.
[Editor's Note: List referred to above is as follows:]
To the Standing Committee on Aboriginal Affairs
Indian Affairs and Northern Development, Votes 1, 5,10,15, L20 and L25
To the Standing Committee on Agriculture
Agriculture, Votes 1, 2, 5, 10, 15, 20, 25, 30, 35, 40 and 45
To the Standing Committee on Communications, Culture, Citizenship and Multiculturalism
Communications, Votes 1, 2, 5,10,15, L20,25, 30, 35, 40, 45, 50, 55, 60, 65, 70, 75 and 80
Secretary of State, Votes 1, 5, 15, 20, 30 and 35
To the Standing Committee on Consumer and Corporate Affairs and Government Operations
Consumer and Corporate Affairs, Votes 1, 5,10,15, 20, 25 and 30 Finance, Vote 40 Governor General, Vote 1
Industry, Science and Technology, Votes 95, 100 and 101
Parliament, Vote 1
Privy Council, Votes 1, 5 and 30
Public Works, Votes 1, 5, 10, 15, 20, 21, 25, 30, 35 and 40
Secretary of State, Votes 10 and 25
Supply and Services, Votes 1 and 5
Treasury Board, Votes 1,3, 5,10,15, 20 and 25
To the Standing Committee on Elections, Privileges, Procedure and Private Members' Business
Privy Council, Vote 10
To the Standing Committee on Energy, Mines and Resources
Energy, Mines and Resources, Votes 1,5,10, L15, L20, 25, 30, 35, 40, 45, 50 and 55
To the Standing Committee on Environment
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Environment, Votes 1, 5, 10, 15, 20, 25 and 30
To the Standing Committee on External Affairs and International Trade
External Affairs, Votes 1,5,10, Lll, L12,15,20,25,30, L35, L40, 45, 50 and 55
To the Standing Committee on Finance Finance, Votes 1, L5, L10, 15, L20, 30 and 35 National Revenue, Votes 1, 5, 10 and 15 Privy Council, Vote 20
To the Standing Committee on Forestry and Fisheries Fisheries and Oceans, Votes 1, 5 and 10 Forestry (Ministry of State), Votes 1, 5 and 10
To the Standing Committee on Human Rights and the Status of Disabled Persons
Justice, Vote 10
To the Standing Committee on Justice and Solicitor General Justice, Votes 1, 5, 15, 20, 25, 30, 35, 40 and 45 Privy Council, Vote 35
Solicitor General, Votes 1, 5, 10, 15, 20, 25, 30, 35 and 40 To the Standing Committee on Labour, Employment and Immigration Employment and Immigration, Votes 1, 5, 10, 15, 20 and 30 Labour, Votes 1, 5, 10 and 15
To the Standing Committee on Management and Members' Services Parliament, Votes 5 and 10
To the Standing Committee on National Defence and Veterans Affairs National Defence, Votes 1, 5, 10, 15 and 20 Veterans Affairs, Votes 1, 5, 10, 15 and 20
To the Standing Committee on Health and Welfare, Social Affairs, Seniors and the Status of Women
Employment and Immigration, Votes 25 and 35
National Health and Welfare, Votes 1, 5,10,15, 20, 25, 30, 35,40, 45, 50, 55, 60, 65 and 70
To the Standing Committee on Public Accounts Finance, Vote 25
To the Standing Committee on Industry, Science and Technology, Regional and Northern Development
Atlantic Canada Opportunities Agency, Votes 1, 5, L10 and 15
Indian Affairs and Northern Development, Votes 30,35,40,45 and 50
Industry, Science and Technology, Votes 1, 2, 5, 10, L15, L20, 25, 30, 35, 40, 45, 50, 55, 60, 65, 70, 75, 80, 85 and 90
Western Economic Diversification, Votes 1 and 5
To the Standing Committee on Transport
Privy Council, Vote 25
Transport, Votes 1,5,10,11,15,16,20,25, 30,35,40,45, L50,55, 60, 65, 70 and 75

April 28, 1989
Estimates
That Privy Council Vote 15 be referred to the Standing Joint
Committee on Official Languages; and
That a message be sent to the Senate to acquaint Their Honours
thereof.


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


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Robert René de Cotret: Mr. Speaker, I am pleased to table today, on behalf of the government, the Main Estimates for the 1989-90 fiscal year. They reflect the government's continuing determination to better manage its resources. As well they recognize the important contribution that the public service has made to enable the government to deliver its programs and services to Canadians as effectively and efficiently as possible.

The Government's updated fiscal plan provides for total budgetary expenditures of $142.9 billion in fiscal year 1989-1990, a 7.4 per cent increase over the forecast for the past fiscal year. I want to underline to Hon. Members today that program expenditures as reflected in the Budget are increasing by only 3.5 per cent over last year, more than a full percentage point below inflation and in line with the average expenditure growth of the last five years, which was 3.6 per cent.
Today I am introducing Main Estimates totalling $131 billion. They reflect the Government's continued success in controlling program spending. They also reflect a commitment to the priorities set out in the Speech from the Throne and our ongoing efforts for a more productive Public Service. These Estimates represent an increase of 9.7 per cent over those tabled last year. This is higher than the rate of growth and total spending outlined in the Budget largely because the Government has been able to identify proportionately more of its requirement at this stage of the Budget cycle. The Main Estimates therefore include more of the Government's planned expenditures than has been possible in the past. This higher amount for Main Estimates is offset by a smaller increase in reserves to fund items to be included later this year in Supplementary Estimates.
I am pleased to inform Hon. Members that the Government is making provisions for reserves of $3.1 billion, approximately 40 per cent less than the amount provided last year.

Mr. Speaker, the increased spending in Main Estimates expenditures for this year is a direct consequence of the overhanging legacy of debt.
Since 1984, 50 per cent of the increase in budgetary expenditures is attributable to higher public debt charges. For this year, public debt charges account for 63 per cent-virtually two-thirds-of the increase in Main Estimates. Interest payments on the debt have now become the single largest component of expenditures. While debt charges have increased substantially, program spending has been brought under tight control. This control over program expenditures is not a new development. It is a reinforcement of five years of determined action by the government. The program component of Main Estimates is increasing by only 4.9 per cent. In the five years ending in 1989-90, this program component has advanced at an average annual rate of 4.3 per cent. This is in sharp contrast to the previous annual average increase of 11.8 per cent from 1980 to 1984, and from the 15.7 per cent average increase from 1971 to 1980.
Even more indicative of the government's program of improved expenditure management is what has happened to the program portion of Main Estimates as a share of Gross Domestic Product. Since 1984-85, that share has fallen continuously and significantly. From a high of 16.7 per cent in 1984-85, these expenditures have dropped to just over 14 per cent of Gross Domestic Product for this year.

My colleagues and I are determined to continue our policy of sound management as well as to seek ways to reduce the overhanging burden of the public debt. Bringing the Government spending into balance will require us to sustain the drive toward improved management of expenditures. The Main Estimates I am tabling today are a further step in this direction while maintaining our commitment to other priorities. Living more effectively within our means has required the Government to both realign and reduce its expenditures. The Government is introducing expenditure reductions for this year totalling $1.5 billion. When the reductions announced by my colleague, the Minister of Finance, are fully implemented, they will amount to $2.5 billion a year. We have ensured and will continue to ensure through regular and progressive adjustment that no
April 28, 1989

sector of the economy nor region of the country bears a disproportionate burden of these changes.
I want to assure Hon. Members that we were careful to select reductions that will not impair the health, the safety or the security of Canadians.


Some Hon. Members:: Hear, hear!


Robert René de Cotret: Expenditure reductions reflected in these Main Estimates were primarily made in five areas. First, growth in the defence programs is being reduced by $575 million. Second, savings of $360 million are being obtained this year by limiting the funding levels of ODA. Third, subsidies and transfers have been reduced, netting a saving of $141 million. Fourth, payments to certain Crown corporations have also been decreased, yielding $105 million. Finally, Government operations are being curtailed by $49 million.
These Estimates make no provision for expenditure reductions requiring legislative changes which will have to be approved by this House. These statutory items amount to some $140 million. Further, the Main Estimates do not reflect reductions of $175 million to items that have been carried in reserve in the Government's expenditure plan.
Reducing the deficit and overcoming the legacy of debt is a Government priority. We have approached this priority in a way that will allow the Government to maintain its commitments: Its commitments to a stronger, more competitive economy; commitments to preserve our environment; commitments to show that we are a caring and compassionate society; and the commitment to foster Canada's cultural and national identity. Spending to reinforce an already strong science and technology program, which is crucial to a competitive economy, will be increased by 12.8 per cent. Environmental protection and enhancement expenditures will grow by 9.4 per cent.
Social spending is not at risk. Funding for key social programs, including programs for elderly Canadians, will grow by 6.6 per cent. Included in this total are increases for elderly Canadians of $865 million.
Estimates
Further, to foster Canada's cultural and national identity, cultural funding is being enhanced and a new Department of Multiculturalism is being established.
Assistance for native peoples is being increased by 11.6 per cent. Finally, the Government, as always, is delivering on its commitment to assist farmers hit by drought, and $387 million is being provided in the Estimates for this purpose.

In the May 1985 Budget, the government announced a program to downsize the public service aimed at lowering the cost of delivering programs while ensuring that essential services to the public and services related to health, safety and security were maintained.
Mr. Speaker, I am confirming today that the size of the Public Service is being reduced by a further 1,072, or one-half of one per cent in these Main Estimates. This brings total net reductions to date to 11,596.
Mr. Speaker, our public service employment level is now the same as it was in 1973.
These total reductions have been achieved while the workload associated with a number of existing programs, such as the issuance of income security cheques, continues to increase. In addition, the government provided the necessary resources to administer a number of new priorities, such as the new refugee determination system, by re-investing some of the savings from the downsizing program into these new requirements. The success of this effort is a testament to the competence and dedication of our managers and employees.
As Honourable Members are aware, over two weeks ago I presented to the House my report on the special warrants that the Governor General was asked to issue in the 1988-89 fiscal year when Parliament was not in session. I also tabled at the time a report on the special Governor-General's warrant for the 1989-90 fiscal year. The funds included in this warrant, as well as in the interim Supply Bill I will be tabling next week, are supported by the program information in the Main Estimates, which Members will have an opportunity to assess in detail.

April 28, 1989
Estimates

The Government recognizes the need to use its resources to meet productively the needs of Canadians and to continue to develop ways of doing this more efficiently and more effectively. The track record of the last five years that I reviewed earlier clearly shows that we have made major inroads into controlling the growth of program spending and managing our resources judiciously. The Government is determined to sustain this progress.
The Main Estimates I am tabling today confirm our resolve to manage prudently while positioning us equally well to deliver on our priorities, which are a stronger, more competitive economy; preservation of the environment; a caring, compassionate society; and a stronger cultural and national identity.


Some Hon. Members:: Hear, hear!


Mr. Paul Martin (LaSalle-Emard):: Mr. Speaker, first I would like to congratulate the Minister for keeping the Estimates secret prior to the lock-up. I must say, however, that I suspect he was looking at different Estimates than those we are seeing. Certainly the numbers are different.
Yesterday the Minister of Finance (Mr. Wilson) attempted to show, somewhat lamely, that he was the victim "of a breach of trust". Subsequently the Right Hon. Leader of the Opposition (Mr. Turner) demonstrated quite clearly that a breach of trust had been perpetrated on this House and on the Canadian people by the way in which the Government dealt with the Budget leak.
Today I would like to remind the House of a third breach of trust, one that occurred some six months ago when Members opposite in the Government said that the deficit was under control and the kind of harsh measures set out in these Estimates were not necessary. They promised child care. They promised regional development. They promised enhanced social programs. The cost would be zero, according to the Prime Minister (Mr. Mulroney). In retrospect, he was right. When one does not live up to one's promises, it does not cost a penny.
The Government has misled Canadians. These Estimates create two Canadas. It erodes the building blocks of fairness on which we have built this country. It does what no other Government would attempt. It tries to solve its financial problems on the backs of the disadvantaged while, in the process, concocting a recipe for recession hitherto unknown.

Mr. Speaker, these Estimates are much more than accounting exercise. It is also in a way a means of judging the gouvernment's priorities and even the quality of life in our democratic country.

These Estimates indicate the kind of Canada that the Tories would create. They have left the $100,000 capital gains tax exemption intact and at the same time have written off huge segments of society. They have given the lie to the priority on the environment and sustainable development. The Government is spending no more this year than was spent in 1984.
It has made massive cuts in a number of areas, including, for instance, $27 million in areas such as conservation and alternative energy initiatives.
What is the end result of all this chicanery? What are the values of the Government? It says that it will now close up to 14 military bases across the length and breadth of this country. However, it does not mention the human face of these cuts. It does not say that it will be taking the heart out of a number of communities and leaving them as empty shells.
This Government has cut spending on foreign aid by over 15 per cent. It has reneged on its commitment to the developing world. It has walked away from a phenomenal opportunity to be the bridge between the haves and have-nots.
The Government promised us a new child care program but now refuses to live up to its obligations to the Canadian family. It has cut those obligations by over $200 million a year, and the number is going up. Canadian children, one out of every five of whom lives in poverty, will suffer enormously because of the callousness of Members opposite. Prairie farmers are shocked to learn that the Government is backing away from its commitment to crop insurance, a program fundamental to their income maintenance. The Tories have cut over $225 million out of western grain transportation, and it is no coincidence that these programs for transportation, regional development and unemployment insurance are on the list of things the Americans seek to attack in the free trade negotiations under the definition of an unfair subsidy. Typical of this weak-kneed Government, it has already hoisted the flag before the battle has even begun.
April 28, 1989

They say that we cannot afford regional development in the short term and they promised that they will increase funding later on. Tell that to the people in the fishery and the forest industries who have already been specifically singled out for cuts. The Hon. Member talks of increases in industrial technological development. The Estimates demonstrate that the budget has been cut by over $200 million, over 25 per cent. In the meantime, while all this is going on, how many small businesses will go down the tubes? How many workers will end up on the welfare rolls? How many families in places like Summerside, Prince Edward Island, will have to abandon their homes and their communities?

Mr. Speaker, I fully appreciate the anger felt by workers when they realized that the government is getting out of unemployment insurance. I fully appreciate the resentment of students and sick people at the government's intention to reduce by 270 million dollars its contribution to education and health care funding.
As for universality of social programs, the government tells us that the rich will pay. It might be so today, but tomorrow, the middle class will pay because this $50,000 threshold is not indexed. Consequently, under the Conservatives, once again the future of the average family is getting bleaker and bleaker.

The Government is cutting funding for native people and for multiculturalism. Language training for immigrants has been halved in the last two years. The women's program has been completely eliminated from the Department of the Secretary of State. These are things that define Canada. These are what give Canada its heart and its character. These have been raped and pillaged by the Government. These are not simply numbers on a page. We are talking about the soul of our country.
I have heard on numerous occasions Members opposite comparing the running of a government with the running of a family. Let us take them at their word. Families have debts. Does that mean that families stop sending their children to school? I do not know of any family that would, but this Government has cut post-secondary education. Does a family stop putting food on the table? I do not know of any family that would, but this Government has cut agricultural assistance. Does a family stop investing in its economic future? I do not
Estimates
know of any family that would, but this Government has cut regional development and is cutting research and development.


Mr. Hockin:: That's not right.


Paul Edgar Philippe Martin: That is not the document we have. The Hon. Member ought to start reading his own documents. Surely to God, the Estimates are not hidden from the Hon. Member. He should take a look at the Estimates of last year and of the year before. He should take a look at the record of this Government that does not give a damn about the Canadian people.


Thomas Hockin: Read this.


Paul Edgar Philippe Martin: Don't lecture me. Tell the workers to read the want ads. Was that not the quote that was used?
No one has to tell the Members on this side of the House that the deficit is a problem, but it is clear from these Estimates that the major cause of the deficit has been the excessively high interest rates to the extent of $6 billion according to these documents. Has the Government attacked the problem? No, it wants but one thing: an excuse to take the Government out of the arduous responsibility of governing.
Last year, the Government exaggerated its revenue base by accelerating tax payments. This year, it is exaggerating its expenditure projections, the reduction, by reducing its reserves by over $2 billion. The Government is engaged in phoney accounting.
The Estimates are not simply a matter of adding up columns of long lists of numbers. It is a statement of the Government's sense of responsibility in the face of an evolving and changing society. The Government is saying to Canadians that it is washing its hands of the regions and of those who are in need. This is not the approach of a responsible government.
The battle lines have been drawn. We have only begun to study these Estimates and already one thing is very, very clear, that is that this Government has given new meaning to the definition of cynicism. It told us before the election that all was well, and then after the election that it cannot afford to face up to the challenges of governing a modern nation.
We on this side of the House understand this country and we know its people. We know their values and we share them. Our goal is to build a country, not to tear it down. I can tell Hon. Members that the clock has begun to tick. Pretty soon this Government will know that its time is over.

April 28, 1989
Estimates


Some Hon. Members:: Hear, hear!


Mr. Howard McCurdy (Windsor-Lake St. Clair):: Mr. Speaker, there has been a great deal of talk about the Budget leak, but the biggest story is the deliberate attack on the weak. The Government claims to be aiding an economy that is more lean. To millions of average Canadians, the Government is characterized simply as being mean.
One of the interesting things about the Estimates revealed this morning was that while we were wondering about the breach of security which is being investigated by the Royal Canadian Mounted Police, the Estimates revealed cut-backs in the Royal Canadian Mounted Police. The Government claims to be attacking the deficit. It has chosen to attack the deficit on the backs of ordinary Canadians. It has attacked the family, it has attacked education, it has exploited workers to pay for the deficit, it has attacked the regions.
There could not have been a more dramatic demonstration of the heartlessness of this Government than the statement made by the Hon. Member from Prince Edward Island this morning, a statement which I found dramatic, compelling and truthful. An economy is to be wrecked in the interests of paring the deficit. As I recall, this year there will be a $500,000 cut in defence at the expense of jobs in Canada. I do not know why the Government did not consider the very simple solution of bringing the troops back from Europe, thereby saving $1 billion a year and demonstrating at the same time a commitment to the new notion of international security.
We are not looking at ways to pare the deficit, we are looking at ways to make those who are strong stronger at the cost of the weak. That is the clear message of this Budget. Listen to what has happened. Universality has been attacked, there can be no question about that. The chink is in the armour of universality with this Budget. Regional equality has now been compromised. In the public service and elsewhere, the commitment of the Government to sexual equality, racial equality and equality for all people in Canada will be compromised in the interests of the penurious rich.
Family allowances and old age pensions are to be selective. The value that we placed on our health system and the post-secondary educational system has been compromised. The Government purports to be interested in economic growth based on new knowledge in science and technology, and it is hardly even mentioned in the Budget papers. What we find in the Estimates is that that commitment to $1.3 billion will be, as it has been in the past, substantially ignored. Where is the message of competitiveness that was supposed to be contained therein?
Agricultural supports are scheduled for termination. Passenger rail service is to be cut by virtue of a diminution in the subsidies provided to VIA Rail. This raises the issue of sustainable development, which is supposed to be the broad scope of focus in the Budget. What we hear is sustained economic growth, not sustainable development. The cut-backs at VIA Rail demonstrate the type of commitment to a transportation system which would be energy efficient, and which we ought to have, which the Government has abandoned.
With respect to sustainable development we find embedded in the Estimates another very interesting message, and that is a cut-back in the amount that was supposed to be committed to acid rain emission control. It is gone from the Budget.
What has also been ignored in the Budget is the very high proportion of increased deficit attributable to interest rates. The Government has stated that it is going to cut the Budget by about $7 billion. Almost all of that is attributable to interest. This is not to be put on the backs of the poor. This is not to be put on the backs of the provinces that are dependent upon regional development funds. This is not going to be put on the backs of those who have benefited from high interest rates and who are putting that money in their pockets, because it is the rich who have been benefiting from high interest rates. If interest rates were decreased by one percentage point the deficit could be decreased by an additional $1.5 billion, as we all know.
The Government has missed the point in all of this. We are going to be plunged into a recession. Unemployment will increase by 1 per cent, and inflation will rise again. On top of our Government's own contribution to a recessionary situation that will be seen in the next couple
April 28, 1989

of years, the situation with respect to the United States, which will only make matters worse, has not been taken into consideration.
The Estimates give the message in detail of cut-backs that will hurt ordinary Canadians. Those cut-backs are a compromise of Canada's future. Those cut-backs reflect the commitments made under the Free Trade Agreement in areas such as unemployment insurance, which was seen as a subsidy by the Americans and to which the Canadian Government has responded in kind by agreeing that it is a subsidy and eliminating any indication of a subsidy by increasing the burden placed on workers.


Mr. Thacker:: How many Canadians built your Mazda?


Howard Douglas McCurdy: What Mazda? That shows you, Mr. Speaker, the compelling ignorance on that side of the House. They are worried about a single car, but they have produced a Budget that will mean that thousands of cars in my riding will not be built. The cars produced in Ontario are the cars which have been the engine of the country, and this Hon. Member is talking about a single car that does not exist in any other place but in his vacuous mind.


Blaine Allen Thacker: It's the hypocrisy of you.


Howard Douglas McCurdy: We hear the Hon. Member across the way talk of hypocrisy. Hypocrisy has been demonstrated in spades over the last couple of days. There has been hypocrisy with regard to the role of Parliament, hypocrisy with regard to commitments made to the Canadian people, and hypocrisy with regard to defence, most particularly. The Government is cutting Canadian jobs and preserving European jobs when $1 billion could be saved by keeping the jobs in Canada and bringing the troops back home.
This is the beginning of the end for the market philosophy represented by the Government. It disregards equality. It disregards fairness. It disregards the real basis for economic growth. This is a Government that would impose upon the weak in order to meet the needs of the greedy who back the Government. The Canadian people will condemn the Government for its Budget and for the specifics contained in the Estimates.
Statements by Ministers



ROUTINE PROCEEDINGS


Hon. Jean Corbeil (Minister of Labour):: Mr. Speaker, on this day, April 28, Canadian workers are paying tribute to victims of work accidents and to those suffering from occupational injuries or diseases. As Minister of Labour and on my own behalf, I join them in expressing my deepest sympathy to affected people and their families and in denouncing the unacceptably high number of accidents in the workplace.
In 1987, last full year for which data is available, 894 Canadians died at work and 25 million person-days were lost due to work accidents and occupational injuries or diseases. I am sure, Mr. Speaker, that nobody can remain indifferent to that data. We must all join forces to ensure a safe working environment for all Canadians.
Any loss of life is unacceptable not only to the victim's loved ones but also to society. Work accidents entail direct and indirect costs of about 17.5 billion dollars a year. It is a very heavy burden on this nation.
The figures, though eloquent, hide the tremendous suffering of workers who are victims of accidents. I have met a lot of them over the years. Their physical pain is compounded by their inability to go back to work or to earn a living in a dignified way. We must help them.
Mr. Speaker, we must show solidarity and express our common will to fight against the scourge of work accidents.

April 28 has been chosen as the labour movement's day of mourning to commemorate workers who were killed, injured or disabled on the job. Work conditions and occupational safety and health have evolved greatly since Confederation. At the federal level, there were various pieces of labour-related legislation over the years, but a major step forward was taken in 1968 when the Canada Labour (Safety) Code was adopted.
Occupational safety and health are now fundamental to managing the workplace. The rights and duties of employers and employees are now embedded in our laws and regulations. For the federal jurisdiction, the Canada Labour Code is the main vehicle that we use to further the cause of occupational safety and health.

April 28, 1989
Statements by Ministers
The Code requires that employers make employees aware of all known or foreseeable hazards in the workplace. Workers have the right to refuse dangerous work. Workers also have the right and responsibility to participate in identifying and solving job-related safety and health problems as members of safety and health committees, or as safety and health representatives. Needless to say, they play a key role in furthering safety and health issues. We should not become safety conscious only after accidents occur. Prevention has to be foremost in our minds. While laws, regulations and Governments play an important role in accident prevention, in the final analysis, it is the employers and workers who are responsible for preventing, eliminating or controlling hazards in the workplace.
This is a responsibility which no one can shun. Only through awareness can Canadian workers significantly improve occupational safety and health in the workplace.

As you know, Mr. Speaker, the Government encourages cooperation and seeks consensus; we constantly try to find new ways to give workers and employers the tools they need to prevent accidents in the workplace, as well as occupational injuries and illnesses.
Last October, the Workplace Hazardous Materials Information System came into effect. This system was created as a result of a joint effort by the federal Government, provincial and territorial governments, unions and employers.
WHMIS is a very important information system, one of the most advanced of its kind in the world. Its purpose is to identify hazardous substances used on the job and to standardize their labeling. Since it took effect, this system requires suppliers to specify the dangers involved with substances produced or imported in Canada that are used in Canadian workplaces. Furthermore, the system requires suppliers to transmit data sheets to employers who in turn must inform employees.
Today as a society we are greatly concerned with our environment and its impact on public health. In the same way, we must be aware of our working environment. We must ensure that our economic progress and growth are not at the expense of our workers' lives and health.
The federal Government is always looking out for new regulatory approaches that would enable it, in cooperation with its partners, to make the workplace safer for workers.
Much remains to be done, but there is a glimmer of hope on the horizon. In the last ten years, the work accident rate has gone from one worker in eight to one in ten, an average reduction of 17 per cent. This improvement is modest but encouraging.

As we have witnessed in the past, having all interested parties involved in occupational safety and health, is the only real way to ensure progress and change in the workplace. In the years to come we must all be part of the continuing effort to make needed changes happen. Each and every one of us in our respective roles must contribute to reducing the suffering caused by work related accidents and illnesses.


Mr. George Proud (Hillsborough):: Mr. Speaker, I rise today to pay tribute to those people who have been killed or injured in the workplace. As we know, many, many accidents have taken place over the years. Accidents that, by today's standards, show were great acts of carelessness.
As has been stated, April 28 has been designated as the labour movement's national day of mourning. The day is set aside to commemorate Canadian workers who have been killed or injured in the workplace. This date was chosen because it coincides with the passing of the first compensation law in Canada. It is important to note that,with the adoption of the Canada Labour Code in 1968, occupational health and safety concerns are now more protected than they ever were before. The objective of this was to reduce and ultimately eliminate job-related accidents. Since the adoption of this legislation the safety of the workplace has greatly improved. But I can say, and everyone knows, that much more is to be done. We now see occupational health and safety acts in place through the country. We still see great discrepancies. Many accidents and much illness still abound in the
April 28, 1989

workplace. Provincial Governments along with the federal Government, the labour movement and the employees themselves have to be more aware and continue to be on top of these things as time goes on. Many people have been hurt in ways that are not at first evident. It may be nine, ten or fifteen years down the road before something shows up.
We still have a long way to go and we must continue to work hard until we reach the ultimate goal of a hazard-free workplace.
The labour movement will today be laying a wreath at 1.30 p.m. at the Vincent Massey Park in Ottawa. This ceremony will take place at the monument erected for the workers killed, injured or disabled in the workplace. Many of us have lost loved ones through accidents that could have been prevented. Today we mourn these losses.
I say to you, Sir, and I say to this House that over the years, through hard work on behalf of all workers, labour unions and Governments across this country, the accident rates have been reduced.
I join today with all the others in this House by saying, let us continue to work harder to see if accidents can be reduced further and perhaps eliminated from our society.


An Hon. Member:: Hear, hear!


Mr. Rod Murphy (Churchill):: Mr. Speaker, today I rise on behalf of the New Democratic Party in observance of this special day in memory of workers who have been hurt or killed on the job.
Last year Members will recall that I had the honour to introduce a Private Member's Bill to designate every April 28 as a national day of mourning for persons killed or injured in the workplace. It was the New Democratic Party's hope that this Bill would have become an instrument by which today would have been set aside by all Canadians as a day of remembrance for our nation's workers. However, the Bill was not passed by the House of Commons.
On April 11 of this year, I reintroduced that legislation. I call upon all Members of Parliament, especially government Members and the Minister here, to support this Bill again when it comes to the floor of the House. If this Bill passes then year after year, April 28 will serve as a day on which we can all recognize the staggering number of people injured or killed while at work. It will
Interparliamentary Delegation Report
also recognize the great need for a new emphasis on health and safety in the workplace.
As the Minister has just said and as the statistics note, deaths from workplace injuries averaged nearly 1,000 persons per year. Approximately one million Canadians are injured annually in the workplace and over 600,000 of those injuries every year are disabling.
In addition to that, Mr. Speaker, deaths occur because of exposure to unhealthy working environments, causing approximately 1,000 deaths each year. However, we do not have the statistics because such deaths go largely unreported and uncompensated, but it is likely that deaths from unhealthy working environments exceed those from physical injuries. But despite the statistics, many Governments in Canada are actually weakening health and safety rules. Many Governments in Canada are relaxing these rules and deliberately eroding the enforcement of safe working conditions for Canadians.
The increase of part-time workers, people who are not properly trained and who have only a minor attachment to the workplace, is also creating more injuries at the work site. For these reasons, I believe that we need to have national legislation in this area, that we need to have a focus on workplace safety, and that we need to have a greater emphasis within the Department of Labour to ensure that we save lives and prevent injuries for our nation's workers.


INTERPARLIAMENTARY DELEGATIONS
Mrs. Sheila Finestone (Mount Royal):: Mr. Speaker, pursuant to Standing Order 34(1), I have the honour to present to the House, in both official languages, the tenth report of the official parliamentary delegation which represented Canada at the Interparliamentary Conference in Budapest, Hungary, from March 13 to March 18.
I take pleasure in advising this House that under the capable chairmanship of Senator Nathan Nurgitz all our Canadian delegates made significant contributions to the proceedings, at all levels of activity, in debate, as presenters, as intervenors and as chairpersons of various committees.

April 28, 1989
The Budget-Mr. MacLaren
I commend for reading this report to all Hon. Members. It attests to their colleagues' diligent and thoughtful input. Our Canadian Ambassador, Derek Fraser, his wife Christine, as well as our foreign service officers, were gracious and extremely helpful. The delegation was supported by competent parliamentary staff in the persons of Committee Branch Clerk Stephen Knowles, and researcher Barbara Reynolds.
Finally, Mr. Speaker, in this the Centennial Year of the Union, I would like to draw the attention of Members to your contribution to this important event by authorizing an official of this House, Mr. Philip Landy, Clerk Assistant, to prepare a book on "Parliaments in the Modem World", which will be released at the Centenary Conference in London and will be a landmark study. For this we thank you.


Some Hon. Members:: Hear, hear!
[Editor's note: See today's Votes and Proceedings.]


PETITIONS
Howard Douglas McCurdy: Mr. Speaker, I have a number of petitions all duly certified, signed by some 2,000 constituents from Windsor and area.
These petitioners call upon the Government to provide the resources that they have failed to provide with respect to VIA Rail, take cognizance of the increased inefficiency, inconvenience, and indeed danger entailed as a result of deregulation of air transportation. They call attention to the promises of the Conservatives now in government to improve VIA Rail transportation.
It takes notice of the environmental implications of failure to encourage rapid rail transport. They humbly pray and call upon Parliament to maintain improved, modernized 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.


Mr. Rex Crawford (Kent):: Mr. Speaker, I have a petition signed by almost 3,000 residents of Wallaceburg who need a pipeline to get clean drinking water.
Communities downstream from the chemical valley along the St. Clair River have had to cope with over 300 chemical spills in the last three years.
Those communities should not have to pay for this pipeline. They are not responsible for the spills, and all we ask is that the Government contributes 25 per cent of the pipeline's total cost. The provincial Government has already guaranteed 75 per cent of the cost. This pipeline is not an infrastructure. This is an emergency.


Nelson Andrew Riis: Mr. Speaker, it is my honour to present a petition to the House, pursuant to Standing Order 36.
It is from a number of western Canadians who point out that nearly four million Canadians are presently living in poverty as defined by Statistics Canada. In regions of Canada such as Newfoundland poverty strikes one in two unattached individuals. Forty per cent of Canadian families headed by women live in poverty, as again defined by the Government of Canada.
The petitioners are calling upon Parliament to encourage Canada's First Ministers to establish on an urgent basis a plan of action in order to reduce poverty in Canada. After seeing the Budget of yesterday, I guess they should be doing this with considerable expedition.


QUESTIONS ON THE ORDER PAPER
Mr. Albert Cooper (Parliamentary Secretary to Government House Leader):: Mr. Speaker, I ask that all questions stand.


Mr. Deputy Speaker:: Shall all questions stand?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Thursday, April 27, 1989, consideration of the motion of Mr. Wilson (Etobicoke Centre) that this House approves in general the budgetary policy of the Government.
April 28, 1989
Hon. Roy MacLaren (Etobicoke North):: Mr. Speaker, the tabling of a Budget is an occasion when a Government assesses where it has come from and proclaims where it intends to go. In this sense a Budget is a blueprint, a plan for the coming year. Companies prepare budgets to assist them in meeting their goals. Countries prepare budgets so that they can finance the programs they consider essential.
From the Budget tabled yesterday, we know how little importance this Conservative Government attaches to issues of major importance to Canadians-to promote full employment, to protect the environment, to develop our regions, to make our industries more productive, and to be internationally competitive.
We know how little importance this Government now assigns to ensuring that the recipients of social assistance have the means to raise themselves from poverty, to improve our education system and to assist the Third World with its debt and its development.
A Budget is even more than a basic plan of a Government. It is the occasion when a Government offers the people its thoughts, its vision if you wish, of where it hopes to lead the country. Judged by these standards also this Budget fails. It fails to offer Canadian people a concept of Canada beyond that of a reduced deficit.
In attempting to reduce its deficit, the Government has constantly spoken of fairness. But what is fair in imposing more taxes on those Canadians who can least afford to pay them? What is fair in cutting unemployment benefits while increasing employee and employer contributions? What is fair in asking the unemployed to pay for their own training, as well as the retraining of those who are employed?
What is fair in transferring to the provinces more of the cost of our social programs, of medicare or of higher education? Those costs will still need to be met. Now the provincial Governments will either have to reduce their own spending in those vital areas, or increase their own taxes to compensate for these federal cuts.
What is fair about raising interest rates for the past two years, and in so doing, fuelling inflation? Today, after two years of higher and higher interest rates, the threat of inflation is no more or less evident today than it was two years ago. What is fair in that?
The Budget-Mr. MacLaren
Canadians today, as a result of both higher taxes and of higher interest rates, must pay more for their houses and their automobiles. The combination of higher taxes and higher interest rates put the successful operation of a small business or a farm at even greater risk. Is this what the Prime Minister (Mr. Mulroney) means when he says that his Government will be equitable to all Canadians? This negative Budget which has no purpose, other than to reduce federal Government spending and to raise taxes, is a direct result of this Government's own failure during the past four years to manage properly the Canadian economy and to put its own fiscal house in order.


Some Hon. Members:: Hear, hear!


Roy MacLaren: Mr. Speaker, a rudimentary principle of economic management is that the Government must pursue at all times a prudent and responsible fiscal policy. When times are good, the Government should reduce its deficit and prepare its fiscal house for the inevitable time when the economy becomes less buoyant. When a downturn is expected, as is now the case, the Government must put in place measures to stimulate the economy and to reduce unemployment. This is the traditional stabilization role of the Government in the economic cycle. In light of that simple and widely accepted economic principle, it is clear that the Government has failed in its management of our economy.
Over the last four years, in spite of strong economic growth, the public debt has nearly doubled, having reached more than $320 billion. The Government has piled up more debt in four years than any other Government since Confederation. Despite all the Government's rhetoric about deficit reduction, the deficit today remains at $30 billion, almost the same amount as when the Conservative Government took office four years ago. Yet, even with this poor financial record, the Government committed itself to $17 billion of pre-election and election promises. When times were good, instead of preparing the finances of the nation for less affluent times, the Government continued to spend, adding program on program and promise upon promise.
Now that an economic slowdown is in progress, the Government has no money either to honour its election promises or to help reinvigorate a weakening economy. By spending more when it should have shown restraint and by leaving corrective action so late in the economic cycle, the Government has put itself in an unsustainable position. Now all Canadians are being made to pay for this mismanagement.

April 28, 1989
The Budget-Mr. MacLaren
Upon its election four years ago, the Government stated that it had three major objectives in deficit reduction. It has failed to reach any of them.
The first objective was "to achieve continuing sizeable year-over-year reductions in the budgetary deficit". Yet the Minister of Finance (Mr. Wilson) has now stated that the deficit will be at or near $30 billion this year, more than $2 billion over that of two years ago. There is no certainty that even the Minister's target of $30.5 billion for next year will be met.
The Minister's projected growth rate for the economy is 3 per cent, an optimistic figure viewed with widespread skepticism. The deficit is higher today than it was two years ago. This is not a continuing sizeable reduction. It is in fact no reduction at all. In the prime objective which it set itself, the Government has failed.
The Government's second stated objective was "to reduce the growth of the public debt to no more than the growth of the economy". The debt in 1984 was $170 billion when the Government took office. Today it is $320 billion, an increase of almost 90 per cent. That debt continues to grow faster than the economy. The Government's debt now accounts for more than 56 per cent of our Gross Domestic Product. It was only 45 per cent when the Government assumed office. The second objective of the Government: its second failure.
The Government's third objective was "to make expenditure control and good management the primary focus of fiscal restraint". In other words, to reduce the deficit by cutting expenditures and not by increasing taxes. Yet over the past four years tax increases have almost matched expenditure cuts. The Conservative Government has imposed on Canadians the highest tax increases in Canadian history. Canadians have had imposed on them a partial de-indexing of income tax; a 3 per cent income surtax, which has now become 5 per cent; an increase in the sales tax from 9 per cent to 12 per cent, which has now become 13.5 per cent; a 10 per cent tax on long distance telephone calls, which has now become 11 per cent; a five cent increase per litre on gasoline, which will now become 7 cents; and an increase on air transport taxes without additional safety in the air. This list is but a sampling of the Conservative tax increases.
Have these tax increases been spread equitably among all taxpayers? No. The National Council on Welfare recently released a study showing that during the four years of Conservative Government, the personal income tax of a working poor family went up by 60 per cent; those of a middle-income family went up by 17 per cent; while those of an upper income family went down by 6 per cent.


Some Hon. Members:: Shame!


Roy MacLaren: During the past four years there have been major increases in taxes. As a result of this Budget, an average income earner will pay $700 more in taxes annually. This means that the same family is now paying $2,000 more in taxes since the Conservative Government was elected.
With this kind of record, with this piling of tax upon tax, I can well understand why the Minister of Finance did not repeat in this Budget his 1984 election pledge that he would not raise taxes. The third objective of the Government: its third failure.
The Minister has cut government spending and has increased taxes. The Minister is predicting a slowdown in the economy and a rise in both the inflation rate and the level of unemployment. That is a recipe for recession. The Government cannot at the same time reduce its spending, increase taxes, and raise interest rates and hope that somehow the economy will continue to grow this year by 3 per cent.
Real interest rates are too high. They are now at a level where they themselves contribute to inflationary pressures. Interest rates are now so high that they are a major reason why the deficit is a problem. The problem of the deficit, however, does not arise from the fact that the Government has spent too much on social programs, regional development, education, housing and training. It arises from the fact that through government inaction interest rates today are too high.
The Bank of Canada, sensitive to any portents of inflation, has steadily raised interest rates for the past two years in an effort to lessen inflationary pressures which, as the provincial Premiers have repeatedly pointed out, were and still are mainly generated in central Canada. In the absence of any fiscal leadership from the Government, monetary policy has been left as the single crude tool to counter possible inflation in an economy already characterized by widespread differences in levels of unemployment.
April 28, 1989

Real interest rates are now higher than they have been in five years. There is little evidence, after two years, that higher and higher rates are in fact countering inflationary pressures. On the contrary, higher interest rates can actually increase inflation in high growth areas such as Toronto and Vancouver.
The Government acts as if somehow it had nothing to do with high interest rates, that they are the fault of undefined international pressures or possibly of the Governor of the Bank of Canada. Who is ultimately responsible for high interest rates in Canada? It is not foreign countries. It is not the Governor of the Bank of Canada. Ultimately, it is the Government itself. The people of Canada know that. They are not fooled by the Government's portrayal of itself as an innocent bystander who has been run over by a bus.
The Government has so driven up interest rates that they now stand two percentage points above those of the United States. A recent report of the Canadian Labour Market and Productivity Centre urged rightly that "the spread between Canadian and U.S. interest rates has been excessive, reducing our competitiveness. The result has been slower employment growth and more difficult adjustment to change. Part of the solution is an interest rate policy appropriate for full employment. This requires a recognition-that control of inflation cannot be the sole objective guiding interest rate policies".
Another result of the Government's tight money policy is that the United States and other foreign countries and other foreign funds, have come to Canada seeking higher returns than they would earn at home. In doing so the foreign lenders have bought Canadian dollars. This means that the exchange rate of the Canadian dollar has become less stable, more vulnerable to decisions made outside Canada.
Canada's trade performance has been adversely affected by the appreciation of the Canadian dollar as confirmed by recent merchandise trade figures which show that our monthly trade surplus tumbled in February to its lowest level in nearly a year.
The Budget-Mr. MacLaren
With a high accumulated debt, the Government's financial planning and its Budget has become too sensitive to interest rates. A straight-jacket has been put on programs that should be available to assist Canadians. The Government itself recognized this in 1984 when it announced that the high level of interest payments "limits a Government's ability to meet priority needs".
Four years later, having made no real progress in reducing its deficit, all the Government can find to say now is that these same high interest payments: "put pressure on the Government's ability to meet other priorities".
This is something that they said four years ago and they are saying the same thing today. That is exactly what the Government said four years ago. In short, the Government admits that it recognized a problem then, but it did nothing about it. It now declares in its Budget that the Canadian people must pay for its ineptitude and its profligacy.


Some Hon. Members:: Hear, hear!


Roy MacLaren: The high interest rate policy the Government is pursuing has had additional unfortunate social results. Higher income Canadians have been the beneficiaries of higher interest rates. The affluent, the rentiers, are the inevitable and invisible winners in the high interest rate stakes. There is, in fact, a regressive redistribution of income when high interest rates are imposed by the Government. Net savers, that is high income people, receive the earnings of net borrowers, generally lower income people. Is it fair to transfer money from the poor to the rich? Is that what the Government means when it says that it will be fair to all Canadians?
Instead of these and other contradictions in yesterday's Budget, what Canada needs today is a new mix, a new balance between taxation and fiscal policy. This balance cannot be reached overnight. It takes time. The process should have begun four years ago. It did not. Now it has become imperative. It must begin by a reduction in interest rates.
The Governor of the Bank of Canada hinted in his recent annual report that should the Government decide to control its spending, he would consider reducing interest rates. To avoid a recession, the Government should now deliver and reduce interest rates. The sooner the better.

April 28, 1989
The Budget-Mr. MacLaren
The provincial Premiers are not the only ones to call for a new mix between fiscal and monetary policy. In its annual review, the Economic Council concluded "the current mix of monetary and fiscal policy, because of its undue reliance on monetary restraint, that is to say on interest rates, has adverse implication for the economy and especially for unemployment, regional disparities, the amount of the public debt investment levels and hence productivity". We fully agree with the council's statement. That is not the only way available to the Government to carry out its oft repeated promise to put its own fiscal house in order.
When we speak of putting the fiscal house in order, why does not the Government, for example, redirect to people some of the billions of dollars that businesses now receive through grants, subsidies and tax expenditures? Corporations receive more today through subsidies and tax expenditures than they pay in income tax. In 1987 alone businesses received almost $9 billion in subsidies and several more billions of dollars in tax expenditures. On the other hand, businesses pay some $11 to $12 billion in income tax. Surely this problem could have been addressed.
Why does the Government not respect its own earlier commitment and increase the share of taxes paid by corporations, including those profitable corporations which today pay no taxes at all? The share of taxes paid by corporations has declined since the Conservative Government came to office in 1984. Some 25 years ago, corporate income taxes accounted for 20 per cent of all government revenue. This year, in spite of record profits, corporate taxes account for only 12 per cent.
As part of phase one of its so-called tax reform, the Government indicated its intention to emulate the United States and to shift more of the tax burden to corporations. However there is still no evidence that this has been the case. The Government itself forecasted that its tax measures of 1987 would add a half billion dollars in corporate tax revenue. In fact, despite strong growth in corporate profits, corporate tax revenues have on the contrary declined. Corporate tax revenues are running about 8 per cent below last year's levels.
The share of corporations has been reduced over the last few years partly through the use of losses, credits, deductions accumulated during the last recession. Account must be taken of the tax systems of other countries against which our corporations must compete. The
integrity of a self-compliance tax system is undermined when Canadians see profits of corporations going up and corporate taxes going down. The Government failed during the past four years, and again in this Budget, to address a basic fiscal problem.
Why does the Government not follow the advice of the Auditor General and improve the collection of taxes owed to the Government? The Auditor General has reported that efficiency in tax collection has so decreased over the last five years that the revenue shortfall now amounts to about one-half billion dollars. The Government has increased taxes yet again, but it cannot even collect what it is already owed. How can the Government explain that the volume of write-offs at Revenue Canada has jumped from some $100 million in 1984-85 to more than $600 million in 1986-87?
There are many, many other examples of government mismanagement large and small. Why, for instance, did the Government spend $90 million of taxpayers' money on advertising in 1988 to promote its own programs, 38 per cent more than one year ago? Was the Minister of Finance not preaching restraint? Restraint, yes, but not during an election year.
Canadians did not elect a Government supposedly pledged to fiscal restraint only to find it building a new prison in the Prime Minister's constituency or, as the Auditor General reported, building roads to nowhere or paying for an extravagant energy book complete with pictures of the former Minister of Energy. Is that what the Minister of Finance means by putting the fiscal house in order? Are those the priorities of a Government that now says it cannot find the money to help finance the education of our native people?


Some Hon. Members:: Shame, shame!


Roy MacLaren: There are many ways large and small to improve government management to consolidate the revenue base of the Government which do not require the Government to cut basic programs to Canadians. If the Government had chosen some or all of these measures, we would have had a better balance today between monetary and fiscal policy. The Minister of Finance himself has estimated that an interest rate reduction of one percentage point reduces the debt charges by $1.6 billion in the first year, rising to more than $3 billion after four years. Yet as I have noted, his mix of spending and interest rates continues to be wrong.
April 28, 1989

All Canadians will remember the Conservative Government's $17 billion of pre-election and election promises. Amongst that deluge of election promises, Canadians will also recall the Minister of Finance stating: "Everything we have announced is within the spending budget that I set out in February of 1988. The costs would be zero".
Now, five months later, the Minister has suddenly discovered that what he called "spending commitments" would not in fact be zero. Now he says that they need to be reviewed or, better still, forgotten altogether.
His explanation is that the Government's promises need to be re-examined because interest rates have unexpectedly risen. But who sets interest rates in Canada? It is ultimately the Government itself. That being so, it is quite remarkable that somehow the Minister did not know that interest rates had been going up for two years. He apparently did not know that the Government's election promises would cost ever more money, or would have to be withdrawn altogether once the election campaign was over.
The House may recall that the Minister of Finance based his former fiscal plan on an interest rate of 7.8 per cent in 1989. But even as he did so the Bank of Canada, with his full agreement, was increasing interest rates. When the Minister tabled his last Budget they were already 8.5 per cent. They reached 10.5 per cent when the election was called and now they are nearing 13 per cent. Either the Minister of Finance was dissembling when he joined in making all those promises, or he simply cannot count.
It is preposterous for the Minister of Finance to leave the impression that the Budget problem only appeared after the election. Even if he himself did not know of it, his officials warned him so during the campaign, but the Minister subsequently denied the report of his own Department.
The Minister of Finance knew when these election promises were made that they would never be honoured. He knew, but nevertheless let them be made. The Minister misled Canadians during the campaign, the same Minister who during the campaign repeatedly called the Leader of the Opposition (Mr. Turner) a liar.
The Budget-Mr. MacLaren
During the campaign, and over the last year, why did we not hear the Minister of Finance admitting to Canadians that there was a debt problem? Why during the past year did the Minister consistently present a rosy picture of the fiscal situation? Why was he saying that he had, "achieved this record of deficit reduction with a new disciplined approach to the management of Government and its expenditures", when quite clearly he had not? Why did he deliver one message prior to the election and a very different one immediately afterward?
The fiscal strait-jacket in which the Government has now placed all Canadians seems to have come as a surprise to the Minister. He suddenly finds that the cupboard is bare and the Government's promises are worth no more than most Canadians suspected they were when they first heard them.
During the recent election campaign The Globe and Mail was at least right when it said:
Failure to be frank will store up nasty political surprises when the public discovers the dirty secret about our finances. But that will be after the election.
The Government has decided to go it alone with its changes to the federal sales tax, having failed completely to reach any consensus with the provinces. Most of Canada will now face a second sales tax. The result will almost certainly be a significant increase in inflation, coupled with a reduction in disposable income for those Canadians whose income is already under attack by this Budget.
The Government has said that Canadians in greatest need will not suffer as a result of this Budget, yet a consumption tax is the most regressive of all taxes. Even worse, the Government has now changed the meaning of "revenue neutral", a phrase of which it is much enamoured, by greatly increasing the sales tax revenue before introducing the new goods and services sales tax.
We have been told repeatedly that interest rates are high in order to save us from inflation. Now the Government plans to introduce a tax on virtually every dollar spent in this country. The Minister himself has acknowledged that the introduction of the goods and services sales tax will increase the inflation rate by 3 per cent. Unless the Government does the obviously sensible thing and abandons its present monetary policy, interest rates are going to climb further still.
Small business owners have good reason to be worried. Already burdened with increased costs as a result of high interest rates, they now face the nightmare of more paper work. The resulting increase in work for accountants will be offset by an increase in small business failures.

April 28, 1989
The Budget-Mr. MacLaren
The unanswered questions about the proposed goods and services tax are almost endless. What will the tax credit be, and to whom will it be paid? What assistance will be provided small business and the self-employed in administering this new tax? How will the new tax affect the different regions of Canada?
We on this side of the House do not support hidden tax increases to generate new dollars to finance deficit reduction. An opportunity for real reform has been missed, and Canadians who can least afford to pay will suffer.
Regional development has always been fundamental to the Liberal view of the Canadian federation. Following the 1981-82 recession, one would have hoped that the regions would have benefited from the economic recovery as much as central Canada. But under the Conservative Government this has not been the case. While Ontario's unemployment rate is lower today than it was before the recession, the unemployment rate in the rest of the country is, on average, higher than it was.
Why is unemployment so high in many regions of Canada? Structural factors are involved, but the wide gap in unemployment levels can better be explained by some of the Government's policies.
First among them is the high interest rate policy. With unemployment figures at 15 per cent in Newfoundland, 13 per cent in Prince Edward Island, 12 per cent in New Brunswick, it is readily understandable why provincial Premiers consider unemployment a greater problem than the 3 per cent inflation rate in St. John's or Charlottetown or the 4 per cent rate in Halifax.
The Government has accepted the advice of the Governor of the Bank of Canada that a single national interest rate is the only valid monetary policy. But it has ignored completely his advice that fiscal policy can offset some of the adverse effects of a national monetary policy. The Bank of Canada will not act. The Government also will not act. So the less affluent regions will now be hit twice. They must pay interest rates which bear little relationship to local circumstances and at the same time see the Government cutting drastically regional development program.
If the Governor of the Bank of Canada and the Minister of Finance both take a hands-off approach to regional development, who will help our regions? Whose job is it? Does the Minister think that further privatization, deregulation, and cuts to VIA Rail will help those regions, will help unify our country?
Are we not to express some caring for each other amongst the regions of Canada? Or are we seeing a Government, preoccupied with its free trade deal with the United States, preparing itself, consciously or subconsciously, for the day when the United States condemns Canada's regional development programs as "trade distorting subsidies"? Does the Government believe that it is sidestepping that problem by reducing or eliminating the regional development programs now, before the negotiations with the United States begin?
At the time of the last election, there were warnings that the Free Trade Agreement with the United States posed a serious threat to Canada's regional development. Despite repeated government denials, economic development assistance for those regions with the greatest need is indeed now being drastically reduced.
Who will be the most seriously hurt by those cuts? It will be those regions which are already suffering economic distress-Cape Breton, the Gaspe Peninsula, towns in the interior of British Columbia. The severity of the impact of those cuts will of course vary, but the fact remains that the local impact of some cuts, even minor cuts, will be out of all proportion to their budgetary magnitude.
For example, reductions in funding for economic regional development in the fisheries and forestry sectors have the potential to send tremors through the entire economies of several resource based provinces. Is this what the Government meant when it said that it would be fair to all Canadians? Is this what the Government meant when it spoke of sharing?
The Minister of Finance is dancing the deficit shuffle. Determined to create the appearance of having finally made some real reductions in the Government's deficit, the Minister has moved to reduce his own deficit by sending the bill to the provinces for payment.
April 28, 1989

In the important domain of higher education, what else other than once more cutting the transfer payments to the provinces has the Government done? By its earlier partial deindexation of transfer payments to the provinces, the Government has already chopped its support for higher education. Now more cuts are to be added to the $8 billion in reductions that will have been made by the Government by 1992.
Has the Government, in cutting funding for education, concluded that our colleges and universities are overfunded? It is a widely recognized fact that our higher education system is underfunded. A recent series of articles in a Canadian newspaper about our universities used the words "a disheartening look at the erosion of the system". The problem here is the erosion in the Established Programs Financing formula that dictates how post-secondary education is funded. It has proven to be inadequate. It is a block funding formula that does not provide incentives for the provinces to increase their grants to colleges and universities. Instead of trying to solve that problem with the provinces, to negotiate with the provinces a better financing formula, the Government takes the easy route and simply cuts it support.
Our national health care system is one of the things of which we Canadians are most proud. However, the system has been under a great deal of strain. Underfunding of health care has led to crowded emergency wards, shortages of hospital beds and long waits for non-emergency surgery. As our population ages, the demands on our health care system increase. Concern for the future is growing as it becomes evident that the system is having difficulty meeting even today's medical needs.
In the face of this reality, it is irresponsible for the Minister of Finance to cut payments for health care. The provinces, as a result of his Budget, will be forced either to find more money through increased taxes or to reduce their health services to offset the federal cuts.
Is the Minister unaware of the pressures on our health care system? Does the Minister believe that the pressures are not real, that they are only imagined? Has the Minister of National Health and Welfare not had anything to say in defence of the health care system in Canada? Has the Government in fact decided to shift responsibility for the problems in the system to the provinces while at the same time making those same problems worse?
The Budget-Mr. MacLaren
In its last annual review, the Economic Council proposed new targets for the Canadian economy for the next five years. The council pointed out the need to achieve a strong performance in productivity as a fundamental condition to Canada's success in global trade. The objective should be to increase productivity at an annual rate of 1.5 per cent to 2 per cent. Current indications, however, suggest that as a result of the Government's neglect productivity growth will be less than 1 per cent, .7 per cent, over the next four years. If Canadians want to compete successfully in international markets, such a sluggish rate of productivity growth is clearly not enough.
Once again, the Government has been pursuing contradictory objectives. On the one hand, it champions free trade with the United States in the name of greater competitiveness, yet on the other hand, it pursues policies that diminish our international competitiveness.
How can productivity be increased? Although it is true that the role of government in the economy is on a short-term basis to ensure stable growth without inflation, its longer term obligation is to invest in the human resources and the physical infrastructure of our country. Training, retraining and education must be improved. Adequate research and development incentives must be introduced. Infrastructures must be kept in good working order. By all these tests, this Budget is once again a failure.
Small and medium sized companies in Canada, typically Canadian owned companies, have had difficulty in obtaining venture capital. This has become more of a problem following the stock market crash of 1987. Figures now indicate that equity financing dropped dramatically in 1988. Small and medium sized firms are the prime victims and now, as a result of this Budget, small business will find financing even more difficult.
The lack of venture capital is all the more disturbing because our economy is in a period of transformation. Canada is moving away from its traditional economic base, natural resources and megaprojects, toward a much more complex structure based on the development of systems and software, the applications of technology and human resources. Not only does this new stage of economic development absorb more money, but it also requires the use of intangible resources such as intellectual property, production techniques and management skills that are more difficult to translate into simple numbers. As a result, financial institutions and investors are more hesitant to invest in new enterprises.

April 28, 1989
The Budget-Mr. MacLaren
Why did the Government fail to take the opportunity of this Budget to counter this problem? Why has it not promoted the establishment of employee profit sharing and stock ownership plans? Such measures would not only help firms gain access to equity financing but would also encourage closer co-operation between employees and employers, thereby contributing to increased productivity and employment opportunities within firms.
The principle of gain sharing is in harmony with the Liberal Party's economic philosophy which believes that concertation between employers and employees is preferable to confrontation. Gain sharing is also in accord with Liberal tradition. In 1984, the then Liberal Minister of Finance proposed measures to promote the establishment of what was then called a registered employee profit participation plan. Following the election of the Conservative Government in 1984, the proposal was not implemented. Governments need to be visionary and to have a long-term plan to implement such productive measures. This Government clearly has none.
In research and development, in 1984, the Prime Minister promised to double Canadian spending on research and development by the end of his first mandate. No progress has been made. In fact, Canada's spending on research and development has gone down. As the C. D. Howe Institute has pointed out, Canada's industrial research and development is concentrated in a small number of companies. The Economic Council notes that the problem goes even deeper. "Canada is well down the list of industrial nations in terms of patent activity".
What do we find in the Budget to improve Canada's lagging performance in research and development in the face of the challenge of the Canada-U.S. Free Trade Agreement and global markets? Again, nothing.
The Government promised to help Canadians train and retrain for a global economy. It now proposes to do so within the Unemployment Insurance Program. The cost of such training and retraining will now be paid from the insurance premiums of employers and employees. The Government has taken $1.9 billion from general revenue and added it to the premium costs that employers and employees will now have to pay.
I have difficulty in understanding the rationale of the Government for these changes. Contrary to its previous commitments, these changes will move the unemployment insurance system further away from the concept of insurance. Previous Governments recognized that the extended regional benefits were in fact a form of social program that was delivered as an addition to the basic unemployment insurance system. Because of that, its primary financing came from taxes levied in a progressive manner on all Canadians. Workers were to pay for the basic insurance system, but all Canadians were to share in the cost of the social contract that that program provided.
Yesterday's decision and yesterday's Budget to reduce the Government's contribution to unemployment insurance departs from that concept. It departs from it without offering any reason other than raising taxes in a hidden way. That decision will not make our tax system any fairer.
The Minister knows that employee premiums, when used to finance social programs, are a regressive form of taxation. Lower and middle-income workers pay proportionately more than higher-income workers for the unemployment insurance account. People earning under $30,000 annually now pay almost 60 per cent of the employee contributions to the unemployment insurance account. All those Canadians who have insurable incomes, most of whom are high-income earners, do not pay for it at all. Is that fair? Is that what the Government means when it speaks of being fair to all Canadians? This hidden and unfair tax increase is to be added to the regressive sales tax that the Government intends to introduce, as well as to the unfair tax rates and the tax brackets of the personal income tax system.
In 1969, the Pearson Commission recommended that our official development assistance, the aid provided to the poorest countries, should be no less than .7 per cent of our Gross Domestic Product. This target was to be reached by 1990. Most industrial countries regard it as a benchmark.
However, upon assuming office in 1984 the Conservative Government decided to review official development assistance and reconsider the pace at which it would proceed toward the goal. The Government has announced that the target will now not be reached before the year 2000, ten years later than originally planned, calling the goal itself into question.
April 28, 1989

In yesterday's Budget we learned that this objective will be further delayed. Canada will now spend only .4 per cent of its Gross Domestic Product on official development assistance. Canada will now reduce its deficit at the expense of the poorest countries, whatever the negative impact these delays and cuts will have on both developing countries and the international status of Canada.
In an interdependent world economy, poverty anywhere robs Canadians of export markets and jobs. The delays and cuts are short-sighted. If one of the richest countries of the world cannot find money during a period of prosperity to help the poorest ones, what kind of moral authority do we have, as the privileged few, to ask Brazil, Mexico, Argentina or any other country to implement social and economic reforms to help solve their problems? Democracies are fragile in those countries. The bitter pill that we are forcing upon them has already caused social disruption. Nothing good can come out of these short-sighted delays and cuts in our official development assistance.
Cuts do not only affect the developing countries. They also hurt Canada's international reputation. Official development assistance enhances Canada's bilateral and multilateral relations, while providing an effective vehicle for further expression of the humanitarian beliefs shared by all Canadians. Furthermore, the reductions announced by the Government will undermine Canada's traditional role as a middle power in multilateral forums such as the United Nations, the Commonwealth, and la Francophonie, a position already weakened by the Government's poor record in external relations and its obsession with the Free Trade Agreement with the United States.
At the beginning of this brief review of the Budget and some of its implications, I asked the Government whether it was fair to all Canadians. In an even more fundamental way, it is an unfair Budget. This Government, through its inaction over the last four prosperous years, has placed itself in a fiscal trap. It has now had to choose. It has had to show its true colours.
We can now see that the values behind this Budget are not the values of most Canadians. They express the values of a Government bent on emphasizing market forces over all other Canadian values. They help to clear
The Budget-Mr. MacLaren
the way toward implementation of the Government's goal of economic integration with the United States.


Some Hon. Members:: Shame.


Roy MacLaren: Mr. Speaker, in Canada the pursuit of private wealth is balanced by a widespread recognition of the public good. Canadians define themselves to a notable degree by their collective programs which they themselves have created and financed to help each other, whether individually or regionally.
During the recent election campaign, Canadians showed every sign that they do not want that sense of caring for each other to be cut in the name of harmonization with the United States. Yet here we have a Government that in its deficit-reduction measures is moving Canada further along a path paralleling that of the United States.
That is what we Liberals meant when we spoke of erosion of sovereignty. Such harmonization with the United States is not the goal of most Canadians. They want their Government's priorities to be on the environment, on the value of a compassionate society, on safe and well run towns and cities, on the promotion of Canadian culture, on a well educated citizenry, and on equal justice for all.
Canadians will look in vain for such priorities in this negative Budget. This Budget fails the test of fairness affirming Canadian values and traditions. That is the basic reason that I move, seconded by the Hon. Member for Windsor West (Mr. Gray):
That the motion be amended by deleting all the words after the word "that" and by substituting the following therefor:
"this House regrets that the Government has imposed unfair taxes and has cut vital programs, including child care, regional development and agriculture, in an effort to reduce its annual deficit, despite the fact that this effort has been rendered futile by the Government's ill-conceived high interest rate policy; and
That this House condemns the Government for pursuing these policies that fall most heavily upon lower and middle income Canadians and that are certain to hinder the further development of the Canadian economy.


Some Hon. Members:: Hear, hear!


Mr. Deputy Speaker:: The Chair has heard the terms of the amendment and finds it to be in order.

April 28, 1989
The Budget-Mr. Nystrom


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I shall break a bit of precedent and move our subamendment to the Liberal amendment and then you can take a look at it.
I move, seconded by the Hon. Member from Prince Albert-Churchill River (Mr. Funk):
That the amendment be amended by adding the following words:
"and that this House further condemns the Government
(1)	for imposing the greatest new tax burden on Canadian families
in recent times;
(2)	for reneging on its commitments to develop regional equality;
(3)	for continuing and increasing the unfairness of the tax system;
(4)	for eroding the universality of vital social programs".


An Hon. Member:: He is not in his right seat.


Lorne Edmund Nystrom: The Hon. Member from Prince Albert- Churchill River will be in his seat long before I finish my speech and then he will officially second my amendment.
We have before us today a very interesting Budget, a Budget that was brought in by the media in the greatest tax leak that we have ever seen in the history of this country. I suggest that this Budget will be known historically for its substantive parts or details rather than for the way it was released.
I suggest it will be known for two things. First, it will be known for what I call the big tax attack of the Conservative Party, the Tory tax attack. I have never in my life seen as big a tax grab by any Government on the ordinary people of Canada. Perhaps it is no wonder when we look across the way at these empty benches. It is millionaire's row. Millionaire after millionaire sit in the front benches of the Conservative Government, and that is why we have the biggest tax attack in the history of this country on ordinary Canadians.


Some Hon. Members:: Hear, hear!


Lorne Edmund Nystrom: There will be $8 billion in personal taxes by 1990. It is tax, tax, tax. The old saying that my grandfather told me many years ago is that Tory times were tough times.


Some Hon. Members:: Oh, oh!


Lorne Edmund Nystrom: Those were the days when the Member from Assiniboia, the great red Tory, was a sympathizer of the CCF and Tommy Douglas. He knows of what I speak.
This is a major attack on ordinary people. It is a pick-pocket type of Budget in attacking ordinary people.
Second, this Budget will go down as stage two of the real Conservative agenda, the Conservative Party and big business alliance in this country. Stage one is the Free Trade Agreement and stage two is to change this country fundamentally into one where corporations and the market dominates, where the rich get richer and the poor get poorer. The word deficit is nothing more than a code word to cut back on social programs, to end universality. It is nothing more than a code word to reduce the role of government on our society. It is nothing more than a code word to reduce the taxes on corporations and nothing more than a code word to increase taxes on ordinary Canadians.
What we are seeing now is a real Conservative agenda of privatization and deregulation to harmonize our programs with those in the United States. This Budget marks a move away from a unique Canadian life where we have unique social programs, a mixed economy, to a vision where social programs will become welfare programs and a mixed economy will eventually become the corporate economy.
What is the result of this Budget? I suggest the result will in all likelihood be to induce a recession. The Conservatives are predicting in the Budget documents an unemployment rate in 1990 of 8.5 per cent. The Minister across the way knows that. What we have here are cut-backs and tax increases. We will have stagflation. In fact, we will have a repeat of 1981-82. What we have is a clone of Allan MacEachen once again. In 1981 we had a tremendous increase in interest rates. In 1982 we had a very restrictive Budget and a great recession from which many parts of this country have still not recovered.
Finally, we cannot trust the Prime Minister any more. Do you remember, Mr. Speaker, that in the campaign he went around saying that social programs were a sacred trust? We cannot trust the Prime Minister.


Mr. Nunziata:: You never could.


Lorne Edmund Nystrom: Do you remember, Mr. Speaker, that in the campaign he talked about the deficit not really being a serious problem and suddenly the deficit is the only problem. We cannot trust the Prime Minister of Canada.
April 28, 1989



Mr. Speaker, we now have two major themes in the country's Budget. First, it's a big Tory tax grab. It is the biggest tax grab in the history of our country. This is a real pickpocket Budget for the average citizen. I am not kidding! And second, and I know the Hon. Member for Montreal will agree-


Mrs.   Duplessis@: Mr. Speaker, on a point of order.


Mr. Deputy Speaker:: The Hon. Member for Louis-Hebert (Mrs. Duplessis), on a point of order.


Mrs.   Duplessis@: Mr. Speaker, the Hon. Member, who may not be very familiar with the French language, just used the terms: un budget de pickpockets. Everybody knows that what a person really means when he says that is: a budget of thieves. So I would ask the Hon. Member to apologize and to withdraw what he said.


Mr. Deputy Speaker:: I ask the Member not to use the word "pickpocket", although I do not rule the word unparliamentary.


An Hon. Member:: Say Robin Hood and his merry gang, then.


Lorne Edmund Nystrom: Perhaps I should say a Robin Hood Budget, Mr. Speaker, because Robin Hood stole from the rich and gave to the poor. In this federal Budget, a lot of money is being taken out of the pockets of Canada's poor and going into the pockets of big corporations and wealthy Canadians. I will now give the Hon. Member from Quebec an example of what I mean when I say this is a real pickpocket Budget for the average Canadian citizen.
Mr. Speaker, some $8 billion is going to come out of the pockets of ordinary Canadians in the next year-


Some Hon. Members:: Shame. Shame.


Lorne Edmund Nystrom: -in excise taxes, sales taxes, unemployment insurance-


An Hon. Member:: Shame on you.


Lorne Edmund Nystrom: -income tax. I would like to have the Member from Quebec listen to what I say here. I know the Member from Montreal is getting very excited. I can hear her head rattling all the way from here.
The Budget-Mr. Nystrom
I will give you the example of an ordinary family. Under this Conservative Budget, an ordinary family of four with two children, where both the mother and father work, having an hypothetical salary of $44,000 a year, would see an increase in the surtax of 2 per cent. That is an increase from 3 per cent to 5 per cent. That is an increase in a year of $85. Some 13.5 million Canadians will have an increase in their surtax next year.
Secondly, there will be an increase in the cigarette and alcohol tax of $100 for that ordinary family. There will be an increase in unemployment insurance premiums of $132 for that ordinary family. There will be an increase in the gas tax of $120 for the ordinary family. There will be an increase in the sales tax of $273. So the ordinary family with two children, making $44,000 a year, if they are the ordinary, average Canadian family that consumes an average amount of cigarettes and alcohol, or drives a car and buys the ordinary amount of food, clothing and things like that for the kids, and goes to the odd movie, the increase in tax will be some $710 a year.


Some Hon. Members:: Shame. Shame.


Lorne Edmund Nystrom: Yes, $710 a year. That is one of the biggest tax hikes we have ever seen in the history of this country for ordinary people.


An Hon. Member:: What next!


Lorne Edmund Nystrom: As if that was not enough-


An Hon. Member:: Is there more?


Lorne Edmund Nystrom: All of a sudden they come along with a hammer, don't they? They announce in this Budget there is going to be a national sales tax of some 9 per cent. That sales tax of 9 per cent will cost about $1,000 for that same family earning $44,000 a year. That is a tax increase of $1700 a year. If that is not the biggest tax hike in the history of this country, then we have never seen anything like it before.


Some Hon. Members:: Hear, hear!


Lorne Edmund Nystrom: Members across the way get a little sensitive because I am going to tell their constituents right now that in January of 1991, if they want to take a taxi they are going to be taxed on it. If they want to have a haircut, they are going to be taxed on it by the Conservative Party at 9 per cent. If they want to stop and buy a Lotto ticket, they are going to be taxed on it by 9 per cent. If they want to take their kids to a movie, they are going to be taxed on it. If they want to take their kids and enrol them in dancing lessons, they are going to be taxed on it. If they want to take their kids and put them in music lessons, they are going to be taxed on it.

April 28, 1989
The Budget-Mr. Nystrom


Some Hon. Members:: Shame. Shame.


Lorne Edmund Nystrom: If they want to buy a house, they are going to be taxed on it.


Some Hon. Members:: Oh, oh!


Lorne Edmund Nystrom: Mr. Speaker, I have here a copy of a brief from the Canadian Real Estate Association, March, 1989. They are great friends of millionaire's row across the way. They say at page 42 that in 1988 they expect the price of a house to go up by $7,800, and in Toronto the price of a house to go up by some $13,000.
Mr. Speaker, no matter what you do with the Conservative Party, you are going to be taxed. In fact, if you vote Conservative you are going to be taxed. About the only thing that is not taxed in this House is the hot air that comes from across the way.


An Hon. Member:: Hear, hear! It should be. [Translation]


Lorne Edmund Nystrom: Mr. Speaker, the federal sales tax will cost the average family $1,000 annually. This is a 9 per cent tax and it will be an inflationary, a very inflationary tax. The Minister of Finance (Mr. Wilson) said that the tax would raise the inflation rate by 3 per cent. We now have an inflation rate of 4.6 per cent, and with the federal sales tax, Mr. Speaker, we will have an inflation rate of between 7.6 and 8 per cent.
Mr. Speaker, this will add another $10 billion to the federal Government's Budget. I know that if the rate of inflation goes up in this country, the Governor of the Bank of Canada, Mr. Crow, will decide to raise the bank rate again. That will make things even harder for the average family.
Mr. Speaker, that is why I said that this federal Budget will put a heavy tax burden on the average family.

Mr. Speaker, when you look at the Budget, you find out that the friends of the Prime Minister (Mr. Mulro-ney) and the friends of the Minister of Finance (Mr. Wilson) across the way, do not get hit very hard in extra taxes. I speak here of the big companies and the huge corporations in Canada.

There was an increase of only $1 billion for big Canadian corporations. With this federal Budget, more than 80,000 profitable companies still won't pay taxes. Explain that to a poor person in Chicoutimi, living on an income of $15,000, or to a family in Saskatchewan with an income of $18,000. Where does the Budget brought down by the Minister of Finance leave us? It leave us with more than 80,000 profitable companies that do not pay tax at all.
Mr. Speaker, that is why I say this is the [English]
biggest tax grab in the history of this country on the ordinary people of Canada. That is Conservative justice, that has always been Conservative justice. In fact, if you go back to 1984 and look at handouts to big companies in this country, we find out that one per cent of our Gross National Product went out to large companies in Canada. We find in 1989 it has gone up to 1.6 per cent of the Gross National Product. That is an increase of 60 per cent of the Gross National Product that goes out in grants, write-offs, hand-outs and welfare to the huge corporations in Canada. I say the time has come for the ordinary Canadian people to realize that and to realize when they are being ripped off by the Party across the way.
In addition, we still have rich people that are not paying taxes. In 1986, 6,250 Canadians with an income of over $50,000 paid no tax at all.


An Hon. Member:: Shame. Shame.

Mr. Speaker, as somebody in Montreal told me a few days ago, there is a Santa Claus. As far as the Tories are concerned, there is a Santa Claus for the rich and for big Canadian corporations, but not for the rest of the country.

Mr. Speaker, that is why I said earlier that this Budget gives us the big tax grab, the Tory tax grab, the biggest tax heist in the history of this countiy. But I am not surprised. When I go back over the record of the Conservative Party from 1984,1 find that for the average family, that is, a poor family in this countiy earning $24,000 a year, the tax increase went up. They have already had tax increases of 44 per cent. For a middle income family earning $49,000 a year, the tax increase
April 28, 1989

was some 10.2 per cent. For an upper income family earning $122,000 a year, guess what happened? There was a tax reduction of some 6.4 per cent. Do they call this tax justice, do they call this tax fairness? They say they represent ordinary Canadians. That is why I am saying it is the big tax attack of the Conservative Party of Canada.
On the other hand, where are the major increases in corporate taxes? On the other hand, we now have deferred taxes by corporations of $36 billion in this country. Why is there not interest on the deferred tax when with interest on the deferred tax of $36 billion at 10 per cent, we would have an extra $3.6 billion to help pay down the national debt-


Some Hon. Members:: Oh, oh!


Lorne Edmund Nystrom: -put moneys into day care, to cut taxes for ordinary Canadians. I ask you, where is the tax justice, where is the tax fairness?
Why is there not a merger tax, a special merger tax, when you have two big companies that merge in this country for no known purpose except to make a profit? Why is there not a merger tax that says that if the companies are going to merge they can only merge if there is significant benefit for Canadians and, if not, there is a serious merger tax? Why is there not a special tax on companies to help clean up the environment in Canada? Canadian people want that kind of a tax and there was not one in the Budget.


An Hon. Member:: Tax, tax, tax.


Lorne Edmund Nystrom: This Budget is nothing but tax, tax, tax, as one of the Ministers himself has said. It is the biggest tax hike there is in the country for ordinary Canadians.

It was always like that with the Conservative Party. I still remember my grandparents and my father saying that Western Canada had been through a severe depression in the 1930s. At the time they had a Conservative Government led by Prime Minister Bennett here in Ottawa, and as it happened the country experienced the greatest depression in Canadian history. Lots of people out of work, lots of taxes, lots of problems, and the men used to take the train from one city to the next in search of employment. I know that the Hon. Member for Edmonton wrote a book in which he refers to the great depression, but that was due in part to the Conservative Party of Prime Minister Bennett, and now we find ourselves in the very same situation. Again we have a
The Budget-Mr. Nystrom
Conservative Government. Again we have a Budget where priority No. 1 is spelt taxes, taxes, nothing but taxes. Just more of the same!
Mr. Speaker, time has come to change Government, time has come to take action in this country, time has come to elect a Social Democrat Government for ordinary people.
I turn now to social programs. The second thing that really strikes me in the Budget after taxation is the attack on social programs by the Prime Minister and his colleagues. In terms of universality it is the beginning of the end. They brought in what is called a claw-back procedure in the tax system, a special tax on family allowance.


Mr. Kilgour:: Against the rich!


Lorne Edmund Nystrom: It is a special tax on old age pensions. Thousands of people will now lose their family allowances and their old age pensions.


Mr. McDermid:: It is 4 per cent of senior citizens all earning over $75,000.


Nelson Andrew Riis: That is this year. Wait for next year when it will be 10 per cent.


Lorne Edmund Nystrom: In fact, 132,000 senior citizens will be affected. Some 535,000 people receiving family allowance will be affected. That will affect women because women receive the family allowance cheques, not the men. I see three or four problems with that.
I ask the Conservative Party why people with children who earn the same revenue as those who do not will be taxed at a higher rate. It is exactly what happens when family allowance is taxed in a different way.
Why is there a special tax on social income? What is the difference between income that comes from dividends, capital gains or executive salaries? Is there something second-class about social incomes?
I turn now to the means test. Is a means test not degrading? The cut-off today for family allowance and old age pensions is $50,000. If it is $50,000 today, how many days will it be before it is a $40,000 cut-off, a $35,000 cut-off, or a $30,000 cut-off? How long will it be before a social program becomes a welfare program and we see the end of all social programs in Canada?


Some Hon. Members:: Hear, hear!

April 28, 1989
The Budget-Mr Nystrom


Lorne Edmund Nystrom: That is the Conservative way. That is the real Conservative agenda. It is the agenda of Thomas d'Aquino and of the BCNI.
The Government is sitting where it does because big business bought the election. Big business spent millions of dollars buying the election on free trade. Now big business is calling the shots. Now the Government is implementing its agenda on social programs and cutbacks for ordinary people. It is collecting the money from the ordinary citizens of the country and not the corporations. That is the real truth about the Party across the way.
I do not expect millionaire's row out here to understand. I do not expect these wealthy Conservatives who make these policies to understand. The Minister of Finance, the Minister for International Trade and the Prime Minister do not understand the ordinary folks. I am sure that the Minister of Finance would not know a poor family if he ran into one.
I am very proud of the history of the CCF and the NDP when it comes to social programs. It was Tommy Douglas back in the 1940s who brought in a hospitalization plan. It was Tommy Douglas who brought in medicare in Canada. It was Stanley Knowles who sits at the Table and J. S. Woodsworth who are responsible for bringing in unemployment insurance and family allowances into Canada. It was our Party with David Lewis in 1972-74 that assisted on the indexation of social programs. The guiding principle for the social programs throughout history is universality. We now have a Conservative Party which is trying to end universality and destroy the social programs. I say that enough is enough.
The only time you will notice, Mr. Speaker, that the Liberals are progressive is when they are in a minority situation controlled by the CCF or controlled by the NDP. I was told this by an old friend of mine, the Hon. Member from Assiniboia.
What is the Conservative Party doing with unemployment insurance? It wants to privatize it. It wants to give the public a chance. In Saskatchewan it is called public participation. It wants the employees to pay. It wants the employers to pay. Can you imagine, Mr. Speaker, the Unemployment Insurance Commission being run by the corporations of the country? Can you imagine, Mr. Speaker, Thomas d'Aquino running the Unemployment Insurance Commission?


An Hon. Member:: Scary, very scary.


John Horton McDermid: No!


Lorne Edmund Nystrom: The Hon. Member will see this happening. The real agenda is to harmonize our program with the United States. It is really the Free Trade Agreement that is calling the shots. It is really an attack on the underprivileged, the dispossessed, the unemployed and the poor. Their premiums will go up under the Conservative Party.


John Horton McDermid: What a crock!


Lorne Edmund Nystrom: It is also an attack on small business. It is also an attack on the poorer regions of the country such as Newfoundland where the people of Newfoundland and the small business of Newfoundland cannot afford to pay higher premiums under unemployment insurance. It is no wonder that a Newfoundland election was called before the Budget. If it was after the Budget there would not be a single Conservative elected in the Province of Newfoundland.


Some Hon. Members:: Oh, oh!


Lorne Edmund Nystrom: There are some very excited and wealthy Torontonians across the way. They do not like to hear about ordinary people being taxed. They do not like to hear about the big tax attack of the Conservative Party. Members of the Conservative Party know that they will be socking it to ordinary Canadians, to the ordinary farmers, and to the small businesses of the country. They know that because of the reduction of transfer payments to the provinces there will be cut-backs in medical care for sick people.


John Horton McDermid: There is no reduction.


Lorne Edmund Nystrom: It is a reduction of 1 per cent.


John Horton McDermid: There is no reduction. They will be getting more money this year.


Lorne Edmund Nystrom: There is a reduction of 1 per cent in Established Programs Financing in this Budget. It is a reduction from the formula that was in place which will amount to close to $300 million this year. Next year there will be another cut in what should have been there.
I tell the Hon. Member to talk to the provinces. He should talk to his ideological soul mate, Bill Vander Zalm of British Columbia. He will tell him exactly the same thing.


Some Hon. Members:: Hear, hear!
April 28, 1989


Lorne Edmund Nystrom: I noticed on the news this morning that there is only one lonely Premier who is voicing any support whatsoever for this Budget. That is dear old Grant Devine in the Province of Saskatchewan. Even Grant Devine is suffering from a great deal of lack of enthusiasm. He has about a year and a half to go before he becomes leader of the Opposition in Saskatchewan.
The unemployment insurance program is an attack on the poor. It is a tax on the poor. It is a tax on the workers.

It is the same thing with the other social programs. Mr. Speaker, I am wondering why there was not enough money in Mr. Wilson's Budget to set up a child care system. It is not there. There is no increase in the number of spaces for Canadian children. That is a serious matter, Mr. Speaker, there is no increase in that sector. There is nothing at all in terms of employment equity for women, nothing for minorities, nothing for the handicapped, nothing for all those people in the Minister of Finance's Budget.
And there are other things, Mr. Speaker. Instead of higher taxes and budget cuts for social programs.
I think, for example, of important areas like VIA Rail. I come from the riding of Yorkton-Melville. The CNR mainline comes through the City of Melville, and I remember Jean-Luc Pepin, who was the Liberal Minister of Transport back in the early 1980s-


An Hon. Member:: A great Minister.


Lorne Edmund Nystrom: A great Minister, the Liberals say.


Robert Phillip Kaplan: You didn't know when you were lucky.


Lorne Edmund Nystrom: It is time for a history lesson. When the Liberals were elected in 1980, they appointed a great friend of mine, Jean-Luc Pepin, as Minister of Transport. He would have made a great Minister of State for Cultural Affairs, Minister of Communications, Minister of Trade and things of that sort, but he knew nothing about Transport. He would not know a boxcar from a barnyard most likely. He decided to disband the transcontinental train that runs across western Canada. There was a great campaign. There were people in the New Democratic Party and the Conservative Party who, unbelievably, united in the great fight against the Liberals and
The Budget-Mr. Nystrom
Mr. Pepin to bring back the trains and to bring back VIA. Finally, because of public pressure from people like the Mayor of the City of Melville and many other local people signing petitions, Pepin was replaced as Minister of Transport and the VIA service was brought back once again.
That was right before the election of 1984. At that time the current Deputy Prime Minister (Mr. Mazankowski) said we will keep VIA Rail, we will expand VIA Rail. He said that people need the trains and will use those trains. The people believed him. The people elected him. They have re-elected him and now what do we get? In the Budget we get a cut-back of $100 million in fiscal 1989-90 for VIA Rail.


Some Hon. Members:: Shame.


Lorne Edmund Nystrom: We get another cut-back of $100 million next year in VIA Rail, and the third year in VIA Rail and the fourth year and the fifth year in VIA Rail, half a billion dollars.
I ask my wealthy friends in the front bench of the Conservative Party, millionaires' row, who is going to suffer? The poor people of Atlantic Canada? Will their passenger train service be saved? You tell me whether it will or not. Will the people of Melville keep the train service that goes through Melville and Watrous, Saskatoon and Biggar and on to Edmonton? Will they keep that train? Our wealthy Toronto Minister across the way, from Brampton I believe, says well, we subsidize those people out there. Mr. Speaker, his friends on Bay Street are the most subsidized Canadians that live here today.


Some Hon. Members:: Hear, hear!


Lorne Edmund Nystrom: The subsidies and handouts and welfare that go to big corporations in this country are a lot more than what goes to subsidize VIA Rail in a place like Melville or New Brunswick or Nova Scotia or British Columbia. The train is an important part of this country, in many ways the heart and soul of this country. Our Toronto Minister says it is nonsense. Well, I want to have that Toronto Minister come and talk to people on the Prairies and in Atlantic Canada. He will find that they want to keep their train and are going to fight to keep it. It is no wonder that the Conservative Party in the by-election in Alberta was rejected massively in March by the Reform Party because of insensitive policies of this sort. They do not understand western Canada.

April 28, 1989
The Budget-Mr. Nystrom

But, Mr. Speaker, there is another attack in the Budget of the Minister of Finance, a budget reduction for Radio-Canada, the CBC.


An Hon. Member:: Hear, hear.


Lorne Edmund Nystrom: He says hear, hear.


Mr. Della  Noce@: Yes, hear, hear.


Lorne Edmund Nystrom: The Hon. Member for Duvernay (Mr. Della Noce) says hear, hear. He is against Radio-Canada, he is against the CBC. Mr. Speaker, Radio-Canada and the CBC are a great Canadian institution which was established by the Conservative Party-his Party-a long time ago.
Mr. Speaker, next year, the budget will be cut by some 20 million dollars. Another 10 million will be cut the following year and yet another 10 million the year after. And in four years, there will be budget cuts of some 50 million dollars.
Radio-Canada and CBC are of tremendous importance for our culture and identity and for our national unity, in spit of what the Hon. Member from Duvernay (Mr. Della Noce) had to say . . .
Then, there is regional development. In Mr. Wilson's budget, regional development is cut by 400 million dollars. That is a 29 percent reduction, Mr. Speaker!
For Newfoundland, certainly not a rich province, for New-Brunswick .. .There used to be some rich people in New-Brunswick: Mr. McCain is rich. There were some, but not many, Mr. Speaker: for Prince Edward Island, Nova Scotia, Saskatchewan, Manitoba and Alberta.
Mr. Speaker, regional development is of great importance to Quebec. If you compare this year's budget to last year's, you will find that regional development is cut by 29 percent. That is a lot, Mr. Speaker, in a country where unemployment is too high. In Newfoundland, the unemployment rate is 15 or 16 percent, which is too right. In Saskatchewan, where I come from, it is too high, at 8 and 9 percent. It is also too high in northern Ontario.
Mr. Speaker, what we have in fact is two Canadas: Metro Toronto where the unemployment rate is 3% and the rest of the country.
Despite all that, Mr. Speaker, regional development funding will be reduced. I know for a fact that the Liberal
Members from Toronto agree that such a decision from the federal government is really not fair.
Mr. Speaker, we have to think about regional development. Can you find anything about research and development in this Budget, or in the Estimates tabled earlier today, can you find any additional estimates for regional development here, in Canada, can you? Research and development are very important for Canada, and for the future of our children. But our country spends less on this than most developed countries do.
Mr. Speaker, I repeat, it is not fair!


Mr. Deputy Speaker:: Order! The Hon. Member for Rosemont (M. B. Tremblay) on a point of order.


M. TVemblay (Rosemont):: Mr. Speaker, may I ask my honourable colleague to read the information about regional development in the Budget Papers, on page 71.


Mr. Deputy Speaker:: I don't think that is a point of order.


Nelson Andrew Riis: I have a point of order. Mr. Speaker, I appreciate my hon. friend's interjection. However, he is not accurate. If he would turn to the page in front of that, he would find in fact that there is a significant decrease-


Mr. Deputy Speaker:: It is not a point of order for him. It is not a point of order there neither. The Member for Yorkton-Melville. I think the Member for Rosemont and the Member for Kamloops are having a debate which I am sure they will have the time to do next week. However, today the Member for Yorkton-Melville has the floor.


Lorne Edmund Nystrom: I will refer the Member across the way to the Budget papers. The Budget itself is just a summary of what happens. If he looks in the Budget papers, he will find that the rate of increase for regional development is this country is not going up. The rate of increase is going down. That was not denied today in Question Period when the question was put by the Member from Essex.
I turn now to agriculture where there are cut-backs for Canadian farmers. There are cut-backs in the dairy sector as well as in the crop insurance area. There are cut-backs in rail line rehabilitation.
April 28, 1989

When we look at the Estimates that were tabled today, we see that there is a mystery in terms of the Drought Assistance Program. I know the Minister in charge of the Canadian Wheat Board is here. Perhaps he can explain to us why in today's Estimates we find an estimate for $375 million for drought assistance.


Mr. Mayer:: Mr. Speaker, I rise on a point of order. The Hon. Member asks me if I would be prepared to explain. If the House would like, I would be more than happy to explain why that number is in the Estimates.


Mr. Deputy Speaker:: Is there unanimous consent to allow the Minister a short explanation?


Some Hon. Members:: No.


Charles James Mayer: The Hon. Member asked.


Nelson Andrew Riis: Mr. Speaker, I rise on a point of order. I do not want to misrepresent what was just done. The Minister asked for an opportunity to explain some program. He knows that each day there is an appropriate-


Charles James Mayer: He just asked.


Nelson Andrew Riis: -time to make a speech. Right now we are listening to the Hon. Member for Yorkton-Melville.


Charles James Mayer: Mr. Speaker, in all sincerity, all I need is about a minute or a minute and a half to explain why. It is in response to the Hon. Member for Yorkton-Melville that as Minister responsible for the Canadian Wheat Board I would be prepared to explain. I would be more than happy to do that if the Hon. Member would let me.


Mr. Deputy Speaker:: There is no unanimous consent. The Hon. Member for Yorkton-Melville has the floor.


Lorne Edmund Nystrom: Let us deal with privatization. The Government is privatizing more Crown corporations-


Mr. Gustafson:: Public participation is the word.


Lorne Edmund Nystrom: Not public participation, privatization. Again, it is part of the Conservative ideological crusade to turn more over to the private sector. This time, the major company involved will be Air Canada. It wants to privatize all the shares of this great Canadian institution so that the wealthier people in this country will buy a majority of the shares and make the money.
This is our national airline. It should remain publicly owned by all the people of Canada. That used to be the policy of the Conservative Party when John Diefenbaker
The Budget-Mr. Nystrom
and Robert Stanfield were its leaders, but with this new Republican-style Conservative Party, there has been a sharp change in its ideological direction.
The Government's action with respect to the environment includes cut-backs in terms of renewable energy. Why is there not more money being spent in the environmental area? I suggest the Government should spend 1 per cent of its budget in fighting for a cleaner environment by attacking air pollution and water and soil pollution. The Budget should provide more in terms of sustainable development, along the lines of the Brund-tland Commission. These are important issues but the Government is taking very little action.
If the Conservatives want a compliment, I will compliment them on their decision to cancel nuclear-powered submarines. All Canadians would applaud that decision. I know there are some Conservatives who do not like that. The Minister of National Health and Welfare left that portfolio because he lost his battle to have the Government proceed with nuclear-powered submarines. My hon. friend from Saskatchewan is now the Minister of National Defence. He went to that portfolio because of a new policy. The Conservatives did the right thing by cancelling nuclear-powered submarines.
I wish it had done the right thing with respect to foreign aid. Why has the Government cut back funding for foreign aid? Perhaps that back-bencher can explain in the budget books why there has been a cut in foreign aid in fiscal year 1988-89 from $2.8 billion to $2.4 billion? Over five years there will be a cut-back in foreign aid of $1.8 billion.
It is wrong for a wealthy country like Canada to cut back in foreign aid, at a time when this is becoming more of a world community. If we are our brother's keeper, we should be doing what we can to help people in the poor parts of the world. With our technology and finances we should be doing what we can to make sure they do not go to bed hungry. We should be doing what we can to develop their economies and make sure they know how to produce food for their people and be able to live in peace.
It is very regrettable that the Conservative Party would pick on foreign aid as an area to cut back in order to save a few dollars when it could have obtained the money from its millionaire friends and big companies who it governs for in this country.

April 28, 1989
The Budget-Mr. Nystrom
Let me deal with the deficit. Much of what is happening today is a result of the deficit. Of course, the deficit is a concern, but only one of many concerns. However, after the election the deficit became the number one priority for the Party opposite. Consequently we see a cut back in services and an increase in taxes. Because of the way the deficit is attacked we will probably see a recession in Canada.
In fact, the Government itself is predicting an unemployment rate of 8.5 per cent in 1990. No one wants a deficit of $40 billion to $60 billion, but the Conservative Government is the one that has accumulated more debt in four and a half years than any Government before it in the history of this country. It is the expert at accumulating debt.
If the Government wants to bring down the deficit and create a strong economy to support day care centres, small business, farmers and poor people, it could take a number of steps.
First, let us bring down interest rates. A drop of 1 per cent in interest rates will save $1.5 billion over a year on the interest payment on the national debt. A drop of 2 per cent in the bank rate will save $3 billion in the course of a year. Our bank rate is about 3.5 per cent higher than that in the United States. There is no reason why we cannot have a bank rate that is at least 2 per cent lower than it is today.
There is also no reason Canada cannot show some leadership at the G-7 in terms of encouraging lower interest rates around the world.
I do not know how many Canadians are aware that the real interest rate in Canada now is higher than it has been at any time. In August 1981, the year of the high interest rate policy of the MacEachen-Trudeau Government, the real interest rate was 8.33 per cent. The real interest rate now is 8 per cent. The high interest policy is making small business poor and making farmers poor. It is making it more difficult to buy homes, and it is making ordinary working people in this country a lot poorer.
The bank rate today is 12.6 per cent. The inflation rate is 4.6 per cent and the real interest rate is 8 per cent. In 1981 the bank rate was 21 per cent and inflation was 12.7 per cent. The real interest rate was only 8.3 per cent.
As a result of the high interest rate policy in 1981 there was a recession in 1982.1 believe we will see a repetition of history. The same thing is likely to happen next year as happened to Mr. MacEachen in 1982.
Second, if we want to bring down the deficit and create more money for day care and other social programs, the Government should be spending money on the creation of jobs rather than cutting back regional development programs. It should be investing in agriculture, in small business, investing in the regions and in local development. There should be a more decentralized vision of economic development in Canada.
The Government should be investing in the co-operative movement and in research and development. It should be investing in those things that will pay great dividends for Canadians in the years ahead.
According to Judith Maxwell of the Economic Council of Canada, for every point that the unemployment rate drops in Canada, the federal Government will get an extra $2 billion of revenue. It is extra revenue because there is a cut-back in unemployment insurance pay-outs. Of course, that will be gone because the Government is privatizing it. There is a reduction in welfare pay-outs under the Canada Assistance Plan and there are extra taxes paid by people who obtain the jobs. Let us lower the interest rates. Let us create jobs in this country. Then let us have serious tax reform so that the rich will pay their fair share, loopholes are closed, the over 6,000 people who pay no taxes but have incomes of over $50,000 per year will pay taxes and the over 80,000 corporations that pay no taxes while making profits will pay taxes. Let us have a serious minimum corporate tax. If we would do those things, we would have extra money to bring down the deficit and we would have money left over for social programs.
Finally, let us have a special parliamentary inquiry to inquire into all the tax expenditures that are made to big corporations. The amount of money that has gone to the big business sector has increased in the last five or six years. We could save money through cut-backs in subsidies and tax write-offs to big business.
In conclusion, this Conservative Budget does two things. For ordinary Canadians, it brings on the big Tory tax attack. Those ordinary Canadians, when the national sales tax comes into effect next year, will pay an extra $1,700 per year in taxes.
The second thing the Budget does is implement a big business Conservative agenda that will scale down social programs, cut back expenditures on equalization and transfers to the provinces and regional development and cut back on money for farmers, small businesses, workers and the unemployed. In the end it will make Canada
April 28, 1989

more like the United States and more like Margaret Thatcher's Britain.
We have a choice. There are two competing visions. We have our traditional Canadian vision. The country was built by pioneers who came from all parts of the world. They had a vision of working together, co-operating and sharing the great wealth of Canada. We built a unique system here in North America with our medical care, the CBC, the Canadian Wheat Board and equalization payments that helped the poor provinces while the richer provinces paid their fair share. We built a unique country, a Canadian way of many cultures and two great languages. It was built not just by CCF pioneers, but by Liberals, by red Tories and by progressive Tories. Many national institutions, including the CBC, the Canadian Wheat Board and the CNR were brought in by the Conservative Party. That is the Canadian way. That is what our Party wants to see continue.
Our Party sees a country in which we share, co-operate and build on our resources. We want to create more wealth and distribute it more equally among everyone, regardless of where one lives or where one comes from, ensuring that there is equality of condition for each and every Canadian, regardless of sex, religion, race or colour. That is our vision, but the Conservative Party across the way has another vision. Conservative Members want to privatize and deregulate and have free trade with the United States so that we can become more and more like the Americans. Their vision is an old vision.
The Budget-Mr. Nystrom
Their vision is a throw-back to the past. In that vision, the rich get richer and the poor get poorer. We follow the law of the jungle.
The time has now come for Canadians who believe in Canada to mobilize and to fight this Budget like we have never fought a Budget before. The next three or four years between now and the next election campaign will decide what direction Canada will go in. We are at a crossroads. We can go the Conservative way, the way of the past, with the almighty dollar calling the shots, or we can decide to continue to expand our social programs and help ordinary people build the great country of Canada. Therefore, I move, seconded by the Hon. Member for Kamloops (Mr. Riis):
That the amendment be amended by adding the following words: and this House further condemns the Government
(1)	for imposing the greatest new tax burden on Canadian families in recent times;
(2)	for reneging on its commitment to develop regional equality;
(3)	for continuing and increasing the unfairness of the tax system;
(4)	for eroding the universality of vital social programs.


Mr. Deputy Speaker:: The Chair finds the subamendment to be in order.
It being three minutes to three o'clock, pursuant to order made Wednesday, April 19, 1989, this House stands adjourned until Monday next at eleven o'clock pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 2.57 p.m.
[Stage Direction]
Monday, May 1, 1989