1989-05-01

Hon. Doug Lewis (Minister of Justice and Attorney General of Canada):: Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table in both official languages the Government's response to four petitions.
[Editor's Note: See today's Votes and Proceedings.] REGULATORY CONTROLS FOR OIL TANKERS


Mr. Nelson A. Riis (Kamloops):: Mr. Speaker, it is my privilege to present a petition on behalf of a number of British Columbians who draw to the attention of Parliament the unavoidable risks associated with offshore oil drilling, as well as tanker traffic up and down the West Coast.
It is a long petition, but the petitioners are fundamentally concerned that since oil spills are inevitable and the outcome of oil spills is recognized, they call upon Parliament to reconsider the position to allow tanker traffic along our West Coast.


Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, I have here a petition signed by several residents of a new residential area in my riding. It is stated by the undersigned that the policy of the Canada Post Corporation with respect to "super boxes" discriminates against thousands of Canadian men and women; that super boxes are very inconvenient for the disabled, the elderly and the sick; and that homeowners in new housing projects are subject to the same tax rates as their neighbours who have home delivery.
Therefore, the undersigned, your petitioners, humbly pray and call upon Parliament to urge the Conservative Government to provide residents in the new residential area located at Paul, Place Ida-Rocheleau and Place Pauline-Charron, with the same type and quality of service as that received by their neighbours.


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


Mr. Speaker:: Shall all questions stand?


Some Hon. Members:: Agreed.


Mr. Speaker:: I understand that the Hon. Member for Kamloops (Mr. Riis) has a point of order before Government Orders are called.



POINT OF ORDER


Nelson Andrew Riis: Mr. Speaker, considering the discussions we had last Thursday, I wish to make a few short remarks and perhaps suggest a way to deal with the issue of privilege that all three Parties have raised in one form or another.
I do not know if this is the time to make those comments. I will seek some guidance from the Chair.


Mr. Speaker:: I think I should make it clear to the House again. I will call Government Orders, but before proceeding with whatever is the Government Order, I have been anticipating that we will proceed today toward the completion of the arguments on the privilege issue. That is a commitment to the House, so that is what we will be doing, unless the Hon. Member for Kamloops has something to suggest which may change that.
In any event, the Hon. Member for Kamloops has something to suggest with respect to this debate. It might be of assistance to the Speaker if the Hon. Member did proceed with his suggestion at this time. There may be a response from others.

May 1, 1989
Point of Order-Mr. Riis


Nelson Andrew Riis: Mr. Speaker, I have not had an opportunity to mention this to the House Leader of the Government nor the Official Opposition. I would like to have had more time, but basically the point I wish to make is that on Thursday the Minister of Finance (Mr. Wilson) rose in his place on a question of privilege. Presumably, if you were to find a prima facie case of privilege, it would be referred to the appropriate committee.
He made his comments in a very thorough and articulate way. While some of us do not necessarily support them, he had the right to make those comments and in many respects he could argue that his privileges had been breached as a Minister.
The representatives from the Official Opposition made their points and suggested that if a case was in fact identified by you, Mr. Speaker, it would be referred to the appropriate committee. We in the New Democratic Party made similar arguments. There were a number of points of privilege, depending on one's perception of the events of last week. We were arguing for some aspect of points of privilege relating to the leaking of information from the Budget. The Minister was concerned We were concerned. We suggested there was a list of items to consider. I have a list of items that I identified over the weekend which should be raised at the committee if you find a prima facie case of privilege.
We have been arguing that a point of privilege occurred for individual Members and have asked that it be referred to an appropriate standing committee. Perhaps, since we unanimously agree, that is what should take place. That would enable us to continue with the business of the House, knowing full well that all aspects of the points of privilege raised would be done in the appropriate standing committee.


Hon. Herb Gray (Windsor West):: Mr. Speaker, when it comes to matters of privilege, there is technically no such thing as a point of personal privilege. When a Member raises something that pertains to himself or herself, he or she is actually dealing with the privileges of the House. Therefore, even though there are a number of notices with respect to points of privilege before you, and technically you may have only called one for discussion to enable you to make the ruling on it, there has been put before you already a wide range of arguments
as to why there has been a prima facie case of breach of privilege.
Certainly the speech given by the Leader of the Liberal Party is one he would have given if his notice had been recognized first. I do not want to hold anybody back from making arguments they want to make before you, but as far as the Liberals are concerned, we would like you to take into account the arguments that have been made irrespective as to which point of privilege has been raised first or is technically before you. We ask you to consider whether there has been a prima facie case of breach of privilege, whether we are looking at the point of privilege raised by the Minister of Finance (Mr. Wilson), the one that would have been raised by the Leader of the Opposition (Mr. Turner) or by other Members. Should you find a prime facie case of breach of privilege, the Liberals are prepared to move an appropriate motion.
However, one should not assume that our motion would simply be to send the matter to a parliamentary committee. It is open for a motion based on a prima facie case of breach of privilege to ask the House to take certain action. We reserve the right to move such a motion in addition to or as an alternative to having this matter looked at by a committee.


Douglas Grinslade Lewis: Mr. Speaker, the suggestion of the House Leader of the New Democratic Party is a helpful one. I also hear the comments of the House Leader for the Official Opposition. Let me make a couple of points if I may.
The Hon. Minister of Finance (Mr. Wilson) rose at the first opportunity and indicated to the House that his privileges had been breached. He made a point of privilege. While I have been a Member of this House, there have been instances where a Member came to the House on a point of privilege rather than a question of privilege. We should preserve that ability for Members to stand in their place and make comment. I had to do it on one occasion. We should keep that option open. The Finance Minister did not at the time suggest a motion. It would be helpful to have this matter studied properly by a committee, one might very well suggest that the appropriate committee would be the Elections and Procedures Committee. We may find that a more appropriate committee would be the Finance Committee. I raise that as a possibility.
May 1, 1989

I suggest if you were to stand the matter down to give me an opportunity to discuss this matter with the House Leaders of the two opposition Parties, we may come to a motion or an agreement which suits the purposes of the House and enables this matter to be dealt with properly.


Nelson Andrew Riis: The suggestion the House Leader for the Government has made is a good one. The Leader of the Official Opposition (Mr. Turner) and the Leader for the New Democratic Party suggested we follow the same course that was proposed when there was a leak by the previous Minister of Finance, the Hon. Marc Lalonde. At that time there was a suggestion by the Official Opposition that a special committee be struck of 11 Members to examine all aspects of Budget security and secrecy. I suggest that be one of the alternatives we consider.


Mr. Speaker:: Just so that everyone understands what is happening, the Hon. Minister of Finance (Mr. Wilson) filed with me on Wednesday night the first of a series of applications on privilege. The Hon. Minister of Finance, because his privilege was first in point of time, was the first heard. The Hon. Minister of Finance did not move the usual motion. Comment was made about that, but that is completely the Minister's prerogative.
The second question of privilege filed in point of time was that of the Right Hon. Leader of the Opposition (Mr. Turner). I want to make it clear that that motion is very much before me. The Right Hon. Leader of the Opposition did make the proper submission that, if I found there was a prima facie case of privilege, he would move the motion. Therefore, that is very much in front of us.
I indicated that there were other applications on privilege. The Hon. Member for Windsor West (Mr. Gray) is quite right and has helpfully remarked that privilege is a matter for the entire House. I have taken in all those applications collectively in the debate that proceeded for many hours. As I said, that debate will continue now, because privilege does take precedence over Government Orders.
We have a suggestion that this matter be referred to the appropriate committee. If, after examining carefully all of the argument, the Chair decides that there has been a prima facie breach of privilege with respect to one or more applications in front of the Chair, then, and
Point of Order-Mr. Riis
under those circumstances, the matter is moved to the entire House. At that time, if the House wishes, the whole matter can be debated by all of the Members in the House. They can decide, if they wish, to then send the matter to the committee. The Chair rules only on whether or not there has been a prima facie breach of privilege. The ultimate decision as to whether it goes to committee lies with the House. If it goes to the committee, the committee deals with the substantive issue of whether there was a breach of privilege. I want Members and the public to understand I am only dealing with privilege at the prima facie level.
It has been suggested that the House Leaders consider the matter, that we stand down debate on the question of privilege at least for a while, and we will see what flows from that discussion. If that discussion decides to move the matter directly to a committee, that will be the course of events provided that all Hon. Members are prepared to accept that procedure.
I take it that it is the wish of the House to stand down the debate on privilege for the moment. If I do that, we will proceed with the Government Order. I am under the impression that at some time later today the House Leaders will come to the Chair and give me some indication of where we are as a consequence of their discussions. I gather that is the understanding.


Nelson Andrew Riis: Yes, Mr. Speaker, that is the understanding. I would like to submit that there is an alternative. After you consider all the evidence presented to date, there might not be a prima facie case of breach of privilege. Since Members of the House from both sides are arguing concerns about the process, the other alternative would be to seek unanimous consent to have the matter referred to the appropriate committee. Most Members would wish to have this process examined, not explicitly for this case, but to include the whole process of how Budgets are handled in the future.


Mr. Speaker:: Perhaps I did not make myself clear. From what the Hon. Member has stated, and especially with respect to the reply of the Minister of Justice (Mr. Lewis), I was under the impression that it may well be that the House Leaders today will make some arrangement which will make it completely unnecessary for me to decide whether or not there is a prima facie case of privilege, or more than one prima facie case of privilege.

May 1, 1989
Borrowing Authority
I am taking it that the House Leaders will have a discussion as to how they wish to proceed. In the meantime, the questions of privilege are before the House. Debate will continue at some future point if some arrangement is not worked out by the House Leaders.




Jean-Robert Gauthier: I would like to speak to another point of order but on a different matter, if you are finished, Mr. Speaker.
Mr. Speaker, last Thursday, in the heat of the debate, some comments were made about parliamentary procedure. At one point I even proposed using Standing Order 62, and I will read it so that Hon. Members will understand what I was doing at the time.

Section 62 of the Standing Orders states:
When two or more Members rise to speak, the Speaker calls upon the Member who first rose in his or her place; but a motion may be made that any Member who has risen "be now heard", or "do now speak", which motion shall be forthwith put without debate.
I understand the situation on Thursday. When I rose you ruled at that time that the question of privilege superseded-

Perhaps I may refer to Hansard of April 27, at page 1003, immediately after the motion that was moved by me, and I quote:
The Hon. Member for Ottawa-Vanier has moved a traditional motion that another Hon. Member be now heard. That is properly a matter for a debate. In my view having set out the fact that we have questions of privilege here -
And you continued your comments, Mr. Speaker. Subsequently, as we shall see a little further in Hansard, the Minister of External Affairs accused me of challenging the Speaker's decision. He said, at page 1004, and I quote:
Challenging the Speaker. Shame.
Following that decision, there was a certain amount of disorder.
I simply wanted to remind Hon. Members and this House that when I said that we were rewriting the rules, what I meant was that to me, this kind of motion was always in order, not debatable, and should be put to a vote immediately. I was not challenging the Speaker's decision at that point, which was that the main question was the question of privilege, but I would like to make it clear that no precedent has been established here, that the Chair did not decide that in future, a motion that another Member be now heard would be debatable or could, for instance, be rejected by the Chair.


Mr. Speaker:: I want to thank the Hon. Member for his comments. I understand his position very well. I think this may be the result of conversations between the Hon. Member and the Chair, and that the Chair's decision is clear, at least with respect to what happened on April 27. I can assure the Hon. Member that I understand his position and that in the circumstances, it might be useful for the Chair and the Hon. Member to have a private discussion about the procedures.



GOVERNMENT ORDERS


Hon. John McDermid (for the Minister of Finance) moved: that Bill C-ll, an Act to provide borrowing authority, be read the second time and referred to a legislative committee.
He said: Mr. Speaker, as Hon. Members are aware, the Financial Administration Act requires that statutory borrowing authority be obtained from Parliament in order for the Government to increase its outstanding debt.
Specifically, Part IV, Section 43 of that Act requires that "no money shall be borrowed or security issued by or on behalf of Her Majesty without the authority of Parliament". This refers to new money only rather than the refinancing of existing debt since Section 46 of the Act provides continuing authority to borrow funds to repay maturing debt.
While Section 47 provides for temporary short-term borrowings, statutory borrowing authority must be obtained from Parliament to permit the Government to implement a regular debt program to meet its financial requirements.

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May 1, 1989

mi
This Bill should be viewed in the context of the Government's continuing efforts to deal with the problem of Canada's huge public debt. First, let us look at the problem.
The grim truth is that the interest on the public debt is far greater than the entire projected annual deficit this year. The interest on the debt is estimated at more than $39 billion. The deficit will be $30.5 billion.
Except for the interest that we pay each year on the public debt, Canada would have a substantial surplus this year instead of a deficit. We have a serious problem because year after year, Government after Government, annual deficits have been piled on top of each other to create this mountain of debt.
Four years ago when the Government first took office, the debt had already reached $200 billion and was rising at an alarming rate of almost 24 per cent a year.
During the past four years, under the guidance of the Minister of Finance (Mr. Wilson), the Government faced up to the debt challenge. We took action to cut the growth in program expenditures and also introduced measures to raise the revenue yield. We put forward economic policies to revitalize the private sector and encourage economic growth.
As a result of these actions, the annual deficit was reduced from more than $38 billion in 1984-85 to less than $29 billion in 1988-89. Our financial requirements were down from $30 billion to $22 billion in the same period. We reduced the growth of the debt to 9.9 per cent. That was the first time in 15 years that the debt growth was less than 10 per cent.


Mr. Milliken:: That's ridiculous, and you know it.


John Horton McDermid: That is not ridiculous at all. The Hon. Member is a little testy for a Monday morning. The Hon. Member from Kingston must still be feeling the effects of the press gallery dinner from Friday night.


An Hon. Member:: Saturday.


John Horton McDermid: Or Saturday night. You can see I am really feeling the effects.


Some Hon. Members:: Oh, oh!


An Hon. Member:: Have you got a sunburn?
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John Horton McDermid: Yes, sunburn and it is hurting like the dickens if you want to know the truth.


Some Hon. Members:: Oh, oh!


John Horton McDermid: Despite our progress, Madam Speaker, the sheer momentum of the debt means that it continues to grow. The debt is now more than $320 billion. That is more than 20 times greater than it was in the mid-70s when it began to grow faster than our national income.
Interest payments increased by almost 50 per cent from $22 billion in 1984-85 to $39 billion this year. We have a chicken and egg challenge here. On the one hand, the only way to control the debt is to reduce deficits, but the continuous increase in the stock of debt and higher public debt charges limit the amount of deficit reduction that can be achieved. High and rising levels of debt make the Government's financial situation vulnerable to interest rates which have been driven up in the past year as a result of inflationary pressures. The rise in interest rates has substantially increased interest payments on the public debt, this year by an expected $6.4 billion above the estimate made in February, 1988.
The Budget faces this challenge firmly with actions to reduce program expenditures further and to strengthen revenues. Through the Budget the Government is building for the future instead of borrowing from it.
Debt control reduces the burden of debt imposed on future generations. It provides Government with increased fiscal flexibility to respond to priority needs. It enables a better balance of fiscal and monetary policy, setting the stage for sustained economic growth, reduced inflationary pressures, lower interest rates, lower debt servicing costs and even lower deficits. It helps ensure a better future and higher living standards for all Canadians.
As a result of the measures of this Budget, the public debt as a percentage of our national income will stabilize next year and decline over the immediate term, the first such decline since 1974-75. By 1993-94, our financial requirements are projected to be only $3 billion.
The Government has demonstrated its commitment, Madam Speaker, to bringing the debt under control. It is a major long-term challenge that will require the efforts of all Canadians for many years to come.

May 1, 1989
Borrowing Authority
After talking about the debt, I have to turn now to outline for the House the terms of the Borrowing Authority Bill for 1988-89. In looking at the Bill, subclause 2(1) requests borrowing authority in the amount of $24.8 billion for fiscal 1989-90. This amount is equal to $21.8 billion of borrowing requirements, $20.5 billion of which are the Government's estimated net financial requirements from the Budget and $1.3 billion of which relate to the forecast exchange fund account earnings. The exchange fund earnings have grown very rapidly in recent years as a result in the increase in Canada's official reserves reflecting the strength of the Canadian dollar. Even though the exchange fund earnings are reported in the public accounts as budgetary revenues, they give rise to additional Canadian dollar borrowing requirements because they are retained in the exchange fund account and are not available for general expenditures.
As in recent years, the borrowing authority requested in the Bill includes a $3 billion reserve to cover contingencies such as a further build-up in official international reserves in 1989-90.
In previous years, exchange fund earnings were not large enough to warrant being explicitly included in requests for borrowing authority. For example, five years ago these earnings amounted to about $300 million. By contrast, in 1988-89 exchange fund account earnings grew to $1.7 billion. At this level of earnings, it becomes necessary to explicitly recognize these additional borrowing requirements in its request for borrowing authority.
The $3 billion reserve requested in the borrowing Bill is the same as was granted in the previous two years. However, this reserve was not large enough in 1988-89, forcing the Government to use Section 47 of the Financial Administration Act in late March when statutory borrowing authority ran out.
The reason the Government ran out of borrowing authority in 1988-89 was because of the strengthening of the Canadian dollar and the consequent build-up in Canada's international reserve assets. This amounted to the Canadian dollar equivalent of about $4.8 billion, adding substantially to the Government's Canadian dollar financial requirements. Canadian dollars used in purchasing these assets were borrowed in the domestic market. Thus, while we are seeking only $3 billion as a
reserve, we hope this amount will be sufficient in 1989-90.
In subclause 2(2), the Government is asking for $750 million of statutory borrowing authority in order to refinance borrowings pursuant to Section 47 of the Financial Administration Act undertaken in fiscal
1988-	89, actually on March 31, the last day of the fiscal year. Funds borrowed under this section cannot be rolled over in the regular way under authority provided by Section 46 but require new statutory authority. In effect, this request for $750 million of statutory borrowing authority covers the short-fall in statutory borrowing authority in the last fiscal year.
Clause 3 of the Bill states that all unused borrowing authority granted by the Borrowing Authority Act,
1989-	90 to the extent that the unused authority exceeds $3 billion will be cancelled on March 31, 1990. Thus, this clause preserves the Government's non-lapsing reserve into the next year to accommodate the possibility that new statutory borrowing authority is not provided before the 1990-91 fiscal year begins.
For the information of Hon. Members, I would like to briefly review for you the Government's debt operations in 1988-89. The domestic debt program increased the unmatured domestic debt outstanding by approximately $27.7 billion to $264.7 billion. The domestic debt program financed approximately $23.7 billion of borrowing requirements, including the exchange fund profits referred to earlier, other foreign exchange transactions, and a small build-up in cash balances.
I should point out that the domestic financial requirements for 1988-89, excluding Exchange Fund profits, are now estimated in the fiscal plan at $22 billion, about $300 million lower than forecast in the February, 1988 Budget.
Of the total net new debt issued in 1988-89, $11.8 billion was in the form of marketable bonds. As well, the Government increased the emphasis on selling bonds by auction, which was found to be a cost effective form of issuing debt. Auctions now account for 60 per cent of all marketable bonds issued, up from about 50 per cent in the previous fiscal year.
Treasury Bills were used to raise $21.6 billion of new funds in 1988-89, up sharply from the amount issued in the previous fiscal year. However, approximately $5.7 billion of the amount issued was to replace the decline in the stock of Canada Savings Bonds.
May 1, 1989

The fall 1988 Canada Savings Bonds campaign, with a coupon of 9.5 per cent, generated total sales of $15 billion. The net amount raised in the campaign, after taking account of Canada Savings Bonds which matured in 1988, and other maturities which were redeemed during the campaign, was $6.5 billion. However, rising interest rates in late 1988 and early 1989 led some investors to redeem their Canada Savings Bonds. As a consequence, the Canada Savings Bond rate was increased to 10.5 per cent for four months effective March 1, 1989. Nevertheless, with the redemptions, the stock of Canada Savings Bonds outstanding is estimated to have declined by $5.7 billion to under $47 billion.
In closing, I would like to remind Hon. Members that they have all the necessary information before them to deal with this Bill expeditiously. The Bill is related to the borrowing requirements set out in the Budget and the estimates have been tabled.
The fiscal plan and other documents provide background information on the fiscal stance of the Government. Also, Annex 7 of the fiscal plan provides background information on the debt operations of the Government.
Finally, Part III of the estimates which deals with debt charges has been amplified this year to provide additional information on the debt program. With all this information readily available to Hon. Members, I trust that the second reading of Bill C-ll will proceed most expeditiously, and I look forward to discussing the borrowing Bill in more detail at the appropriate committee.


Mr. Len Hopkins (Renfrew):: Madam Speaker, when we had the Throne Speech in the first week of April, the Government ended its Throne Speech by saying, "May divine providence guide your deliberations." I think as we hear the financial statements of the Government today we will indeed be using that divine guidance for our deliberations.
The Government is today taking yet another step to officially borrow more money. We had a Throne Speech in April, as I mentioned, and we have had a Budget in April. Now on May 1, after all the talk we have heard about deficits and the national debt, we are starting off the month with a borrowing Bill.
The Minister of Finance (Mr. Wilson) with the approval of the Government is allowed to raise money under
Borrowing Authority
the Financial Administration Act. Under this Act the Minister of Finance has the right to raise money either by way of a loan or by sale of securities in Canada, and we have just heard the Minister go into that.
The reason for this Bill this morning was that in March, 1989, the Government borrowed $750 million pursuant to Section 47 of the Financial Administration Act, and these borrowings must be refinanced in 1989-90. Thus, additional statutory borrowing authority to refinance these borrowings must be included, bringing the total authority requested from Parliament to $25.6 billion.
When talking about borrowing $750 million in Bill C-ll and also talking about the billions of dollars of our national debt and the fact that the Government is borrowing $25.6 billion in total, one is reminded that just 32 short years ago the Right Hon. John Diefenbaker fought and won an election campaign on the Right Hon. C.D. Howe's question in this House of Commons: "What's a million?" I am sure that Mr. Howe must be looking down on this Government today and shaking his head.
We also know that at the time the Government used that $1 million slogan to dupe the people of Canada once again, $1 million in those days did not go very far either, it worked for tactical purposes in the election campaign. We saw the money campaign, too, in the last election as well.
We know that the Government of Canada has a deficit this year of $30.5 billion. We know that when this Conservative Government took office in 1984 the national debt of Canada-and this is important because the message must be made very clear as to where all this debt came from-was $170 billion when this Government took over. Today, just four and one-half years later, the national debt has skyrocketed to $320 billion, an increase of almost 90 per cent. That is what the Government calls great and wondrous financial management.
Before this year is over, the national debt will have more than doubled in five years. This is the financial management of a government that travels around this country, stands up in the House of Commons and says, "What a great job we are doing in the financial administration of this country" while they have succeeded in doubling the debt in five years. This is what the Government calls sound fiscal planning.

May 1, 1989
Borrowing Authority
The Government's objectives, "to make expenditure control and good management the primary focus of fiscal restraint" has failed dismally to materialize, let us face it. That is why they are so desperate today to get down and do something about it and hit everyone with a sledge hammer. There is, therefore, great reason on the part of all Canadians to be concerned about the financial management of our country. The situation does not seem to be improving even though the Conservative Government has imposed on Canadians the highest tax increases we have seen in Canadian history.
Let me lay this out before the House and the people of Canada in simple but accurate terms. It took Canadian governments from Confederation, from 1867 to 1984, 117 years, to build the national debt up to $170 billion. But it will take this Government only five years to add another $170 billion from 1984 to 1989.


Some Hon. Members:: Hear, hear!


Leonard Donald Hopkins: That is the message that we want to get out to Canadians, because this Government is still dumping on the previous government, still blaming the previous government for this, but it is their administration that at some point in 1989 will have succeeded in doubling the national debt of this country in five years or less. It is clear that the high interest rate policy of this Government is one of the problems. Indeed, the Minister mentioned it this morning. He listed it as the problem the Government has.
The deficit does not increase drastically because the Government has spent too much on post-secondary education. That is not the cause. The cause is not retraining. The cause is not social programs and the cause is not regional development. But these are the items that paid the price because the Government wants high interest rates.
It is clear from the Government's own estimates that were tabled in this House last Friday that one of the major causes of the deficit has been the excessively high interest rates, to the extent of $6.4 billion. Imagine, $6.4 billion in interest rates because of the high interest rate policy of this Government, and then it is blaming everyone else for its problems. Imagine, because of the Government's high interest rate policy it is costing $6.4 billion more to service the national debt.
The Government seems to be fuelling its own inflation but it is blaming post-secondary education, Medicare, unemployment insurance and other social programs. It is also blaming regional development-


An Hon. Member:: International money markets.


Leonard Donald Hopkins: An Hon. Member mentions the international money markets. Certainly, the International Monetary Fund which is located with its headquarters in Washington, did send a message to the Government during the winter and told it that it was time it got the financial management of the Government of Canada in place because they were getting concerned about the Canadian debt. That came from the IMF, the International Monetary Fund. It gets pretty serious when the IMF must send a message to a national government. It sent the message to the Government because it realized it would be doubling the national debt in less than five years.
Higher taxes on the people of Canada is also a form of inflation. This type of inflation can be had even when the economy is weak. Higher taxes can still be imposed. Therefore if there is a downturn in the economy down the road, people will still be saddled with high taxation.
As a result of the Budget an average income family will pay $700 more in taxes annually. The over-all truth of the matter is that the same family is now paying $2,000 more in taxes than when the Conservative Government was elected.
1'his morning we are talking about a borrowing Bill and the financial management of the Government. The real financial managers will have to be the people of Canada, those who are being taxed. After the Government is through with them they will have to manage their affairs very carefully. They will have to manage their incomes in such a way as to keep their heads above water. They will have to manage their affairs carefully in order to stay above the outgoing financial tide that is flowing into the Government of Canada as a result of high taxes.
In order to even touch the surface of the financial management of the Government there are many other items about which we must talk. Let us take a look at the agricultural industry which has been having a very tough time for some time now. The Government has cut $399 million out of agricultural services and subsidies. One of these is crop insurance. The federal Government is trying to change the sharing of the cost of crop insurance between the federal and provincial Governments. In Quebec and Newfoundland the fund is split 25 per cent
May 1, 1989

federal, 25 per cent provincial and 50 per cent producer. In other provinces the split is 50 per cent federal, zero per cent provincial and 50 per cent producer with the provinces paying the administrative costs. The federal Government expects to shift $90 million this year and $110 million in 1990-91 on to the provinces. What is new? Nothing is new. The Government is trying to cut down its deficit by passing the expenditures on to the provincial Governments in a whole range of areas. I mentioned in this regard post-secondary education and the transfer payments, including Medicare transfer payments.
Where does this place the provinces? They have to go to the municipalities and cut funds from them. The municipalities will then have to decide what they will do to cut back on their people. They will have to do the dirty work right on their own doorsteps.
The dairy export subsidy program was created in 1979. It provided a direct subsidy for milk exports. The federal Government reduced the amount of milk eligible for this subsidy by one-half in 1984. The elimination of the other one-half of the subsidy is proposed in the Budget. The savings are expected to be $7 million annually. That is another $7 million taken from the farmers of Canada. There will also be changes to the Canadian Dairy Commission, as well as to other organizations.
I would now like to move on to the long-time tradition of rural Canada. I like raising rural issues in the House because everyone is used to looking at the bottom line today and talking about big things. They often forget that there is another world out there. The Budget states that Canada Post will be required to pay some $300 million in dividends to the Government of Canada over the next five years. To allow the payment of dividends the Government is transferring the Canada Post Corporation from one schedule to another schedule in the Financial Administration Act. It is doing this to make everything nice and legal.
As a result of Canada Post recording a profit in 1988-89 for the first time in 30 years, and anticipates further profit years, the Government has decided that some of these profits will be paid to the Treasury in the form of dividends, a kind of reverse subsidy. Where is the incentive for any organization, such as Canada Post, to produce a profit? Every Government wants to see its
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agencies producing a profit and doing good work. However, as soon as they do make a profit the Government takes it away. At the same time, the Government may be attempting to improve the financial image of Canada Post Corporation to render it more attractive for privatization. In addition, the $300 million being paid back to the Government in the form of dividends will not be used to improve the service of Canada Post, equipment and machinery. Nor will the money go toward speeding up the mails or restoring rural post offices. The Government will use the money wherever it sees fit to the best political advantage.
This will be done at what price to rural Canada? We would like to see those profits remain with Canada Post in order to improve and speed up its service. We do not think it should be done so the Government can come along and say: "Now you guys are making the profit, we want the dough". That is wrong.
Other Crown corporations are being sliced and cut. VIA Rail is one. Even if it were making a profit, it would probably have to pay it back to the Government as well.
Unemployment insurance came into being in 1940 as a statute of Westminster, an amendment to the British North America Act. Because the provinces could not afford to pay UIC, the responsibility was transferred to the federal Government. It was felt that it was the one Government in Canada which could tax anything it wants to tax, something which this Government is doing. The provinces are limited in their areas of taxation. Thus it was agreed, as a result of the Rowell-Sirois Commission report that started off in 1937, that the unemployment insurance program should be passed on to the federal Government. The appropriate statute was passed at Westminster in 1940.
What is happening today in 1989? Some 49 years later the Government is getting out of the unemployment insurance business absolutely. It will not pay one cent toward it. That responsibility was imposed upon Governments of Canada by a statute of Westminster, an amendment to our very Constitution. By getting out of the unemployment insurance business, by making small businesses and employees make bigger contributions to it, the Government is reneging on the Constitution of Canada. Undoubtedly, we will see more of that.

May 1, 1989
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Another area in which the Government is reneging is in terms of industry. I refer to a long-time traditional industry of Canada, the softwood lumber industry. We have been telling the Government for the last couple of years that this has to change. As a result of the Memorandum of Understanding that the now retired Minister for International Trade signed in great glee and glory just prior to signing the so-called free trade deal with the United States in late December, 1986, she agreed with the American producers who said that Canadians were being subsidized. The Minister did not even let the matter go to the courts for a decision but said: "Yes, we agree. We will sign. We want to get the Free Trade Agreement tonight. We don't mind making the softwood lumber people of Canada a sacrificial lamb in order to get this Free Trade Agreement".
As a result, on that dark night in late December of 1986 the Memorandum of Understanding was signed. It was decided the Canadian industry would be taxed 15 per cent, all because the Americans wanted that before they would sign another deal. However, the Minister for International Trade at that time said: "Don't worry, you guys will not have to collect it. We will penalize our own industry. We will put the 15 per cent export tax on ourselves. Don't worry about it, we will look after it". A number of members from northern Ontario and myself travelled this province throughout the east and the north having hearings on the softwood lumber issues with the people in the field. We went into the sawmills, into their offices and into their communities for discussions. We had discussions in municipalities where a sawmill is the only industry to support the whole village or town. Their message was the same no matter where we went: The Government has made us the sacrificial lamb in order to get a free trade agreement with the United States. That is a fact of life.
There are mills in Ontario that sold softwood lumber as far south as Tennessee, lots of it, and they could compete favourably. The construction industry in the United States likes our softwood lumber because it does not warp all out of style like some southern softwood lumber does. The construction industry in the United States would love to be getting our lumber again, but this Government has put the softwood lumber people of this country in a position where they cannot compete.
We all remember the Minister of State for Privatization (Mr. McDermid), who led off this debate this morning, standing up in this House time and time again on the free trade debate and saying: "Canada can compete. We are not worried about that. Canada can compete in any industry in the United States. We have faith in our Canadian people." Then the Government turned around and put a 15 per cent export tax on softwood lumber. It brought in a policy of high interest rates which upped the costs still more for our producers. Then the exchange rate on the Canadian dollar improved and threw the whole thing out of whack.
Today the softwood lumber producers in this country cannot compete with those in the United States. When the United States saw this market going their way, they went out with glee and upgraded their mills, something they had not done for years. They improved their operations. As a result, today they are serving the eastern markets in the United States that our Canadian mills have served for many, many years, and made a good profit on them as well. That is a sad story coming out of the operations of this Government. If you want to talk about financial management, there certainly is not any financial management in that agreement. It is absolute mismanagement right through, as the Hon. Member says.
The softwood lumber producers are in a state where they cannot compete and are now laying off workers all over northern and eastern Ontario and in other areas of Canada. I want to say to the Minister for International Trade that when I spoke in the trade debate in this House in December, he told me that he was going to meet with the producers on the softwood lumber issue. I don't know whether he has met with the actual softwood lumber producers or not, but I know that the softwood lumber producers have been in to see the Minister of Forestry. The Minister State for Forestry (Mr. Oberle), as far as I am concerned, is simply a buffer zone between the softwood lumber industry and the Minister of Finance and the Minister for International Trade. When delegations come to Ottawa on this very touchy issue they are shifted off to the Minister of Forestry. They have met a Cabinet Minister, and are expected to go back home happy. But the Minister of Forestry is going to have a tough time persuading the Minister for International Trade and this Government to back off on this Memorandum of Understanding on softwood lumber.
May 1, 1989

There is a clause in there which says that one party or the other can give thirty days notice to cancel the agreement. But the Government is not doing that. It knows that we are in the right on the softwood lumber issue, but it does not want to back off on it because it is going to annoy the United States. As far as the softwood lumber people are concerned, they are saying: "Look, go ahead, cancel the Memorandum of Understanding. We will take our chances in the courts. We would rather take our chances in the courts than take our chances with this Government." That is what they are saying.
The softwood lumber issue is growing day by day. This Government is going to have to make a decision on it. It is saying to us: "Why don't the provinces do something about it? Why don't the provinces raise their stumpage fees? Let them do it." I have a message for the Hon. Member for Mississauga South (Mr. Blenkarn) who is the expert in finance and the expert on who is going to get what in eastern Ontario. Last fall after the election he described eastern Ontario as an area that should be penalized. I don't think he has much hope of being heard in this House this morning, although he does sound much better from the seat of his pants than he does in front of a microphone.
The export charge on softwood lumber is so poorly designed to be almost unworkable. This is the answer that I want to give to the Hon. Member for Mississauga, that the original 1986 Memorandum of Understanding indicates the Government's intention to ultimately replace the export charge with higher provincial stumpage rates.
The Province of Ontario is getting about $25 or $30 million a year in earnings from stumpage fees across Ontario for softwood lumber. In order to get it to the stage that the United States wants to see those stumpage rates at under the Tree Trade Agreement, the Province of Ontario would have to increase stumpage fees by three times. It would have to triple those stumpage fees in order to satisfy the United States. So what is the sense of tripling the stumpage fees and then removing the 15 per cent export tax? The industry will still be loaded down for years to come with those higher stumpage fees because you cannot change them. If you do, you are going to be in trouble with the United States.
So, don't tell us to go off to the provinces. Don't blame the provinces. This Government signed the Memorandum of Understanding. Only it can remove it. It should
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do it in order to save the industry, an industry that has been the heart and soul of this country in many ways since before Confederation days.


Some Hon. Members:: Hear, hear!


Leonard Donald Hopkins: I want to talk about another industry, the Crown corporation that the Government has taken sums of money out of because it was able to have some in the bank. Let me say a word about Atomic Energy of Canada Limited which again is under attack today. If anything happens to Atomic Energy of Canada Limited, and we get out of the nuclear energy business or impair it in any way, then what is really going to happen is that this country is definitely going to have a shortage of power in years to come. This year AECL research and development has taken another reduction from $130 million down to $112 million, a reduction of $18 million. It is told at the same time by the Minister of Energy that it can maintain last year's spending levels, but it is missing $18 million. The Minister says to them, well, take it out of your reserves. In 1985, when this Government cut ACL by $100 million in research and development, it also took $70 million out of its reserve fund. Since then this Crown corporation has put $30 or $40 million back into the reserve fund.
But now the Government is saying, use your reserve fund to keep your expenditures up to that level. We are not going to give you any money to do it. We have a fantastic science community. I ask the Government today to consider its actions very carefully, and to get on with the job of research and development. Research and development is the driving force of our industry and, without it, there is no capacity to compete internationally-
Today in the Province of Ontario 50 per cent of the hydroelectric power and the jobs related to that industry are dependent on CANDU reactors which have proven to be the safest in the world. This technology is established in industrialized Canada.
Without those CANDU reactors in industrialized Canada, in order to generate the same amount of electricity as they have produced over the years, it would have been necessary to buy more than $7.5 billion of coal from Pennsylvania for coal-fired furnaces. Of course, today everyone screams about pollution. There would have been $7.5 billion more in coal-produced acid rain floating around Ontario. Imagine what the Parliament Buildings would look like under those conditions.

May 1, 1989
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The Government has given an ultimatum to Atomic Energy of Canada Ltd. It must either pay its way or it will get no money in the interim. The Government has already implemented cut-backs, has taken money out of the reserve fund of AECL and states that AECL must pay the Government back for the money it loaned.
More than energy is involved in this matter. There are two subsidiaries of Atomic Energy of Canada Ltd. One is Nordion International Incorporated. It is a radio chemical isotope plant. Canada produces 60 per cent of the world's supply of radio medical isotopes, and this is a very profitable organization.
Let me tell the Minister of State for Privatization and Regulatory Affairs (Mr. McDermid) that I wrote a letter to the Prime Minister (Mr. Mulroney) and the Minister of Energy, Mines and Resources (Mr. Epp) some time ago, suggesting that the Government should retain these two subsidiaries which are making money and put the profits into the parent company for research and development. In that way the whole organization will be regenerating its research funds.
Instead, the Government has already taken steps to sell Nordion International Incorporated. The other company, Theratronics International Ltd., has not been as successful as the other Crown corporation but produces a tremendous product which can be very successful. For example, it manufactures the cobalt therapy units for the treatment of cancer. The units built as a result of this high-class medical discovery are produced by Atomic Energy of Canada Ltd.
There are many wonderful things that AECL does in the medical world but which are unknown to the average individual because of the difficulty in giving that message out. As soon as one mentions atomic energy or nuclear power, many people hide because they are afraid of those terms. We have a serious educational problem in this respect.
Let me quote from the Congressional record in the United States, when a member of the U.S. Congress said: "-a new source of power, beginning a new era in the history of civilization. Never in history has a society been confronted with a power so full of potential danger and at the same time so full of promise for the future of man and for the peace of the world". That person was talking about the invention of gasoline. That speech was delivered in the Congress of the United States in 1875.
More than 100 years later we have a facility that produces CANDU reactors and medical radio isotopes, and produces the cobalt therapy unit for the treatment of cancer. Yet people only consider the horrendous possibilities. There is an anti-nuclear community which gets much coverage in the media. I ask the media to give some balance to this question.
Even when Christopher Columbus left to find the New World, people were worried that he might fall off the end of the earth. We must open our minds and have some vision for the future of this country. The only way to have vision for the future is to open up the minds of those sitting opposite so they may proceed with research and development and assist our scientists and leading organizations in this country. We have world-class laboratories and world-class facilities. There should be encouragement to find new ways of manufacturing new products and to work for industry. That can be done by a Crown corporation that is owned by a Government. If it is privatized it will only work for private industry, keeping secrets to itself.
Organizations like Atomic Energy of Canada Ltd. and the National Research Council should be open to everyone so that the results of their good work can be spread to industry and the public, like the medical world. That is the way to build Canada. We should not hide that information from anyone.
I implore the Government to reconsider what it is doing. Making the nuclear option available to all Canadians requires continuing federal leadership in nuclear technology. I ask the Government to provide that leadership. Everything costs money at one stage or another, but the returns will come in and the Government will be glad it had invested. It will be able to say it did something useful.


An Hon. Member:: Borrow more.


Leonard Donald Hopkins: I gave the option of putting research and development funds back in from the subsidiary corporations and to use the reserve funds for themselves rather than for Government purposes. If the Government followed that course, there would be less investment necessary.
Canada is the world supplier of radio isotopes for use in nuclear medicine. Quebec Members should note that CANDU reactors in Quebec and Ontario produce 85 per cent of the world's supply of Cobalt-60 used in cancer treatment. Surely no one is against programs like that.
May 1, 1989

Research and development in Canada produces spinoff technologies and businesses, including Aerospace, CAE, Spar, small sized robotics, medical operations and others. All of these have developed over the years because people had faith in what was being done. No other country has such a complete world-class package of peaceful nuclear assets and capabilities as Canada.


Some Hon. Members:: Hear, hear!


Leonard Donald Hopkins: The Candu reactors continue to out-per-form the competition, consistently placing in the top ten. There are research reactors in Ontario, Quebec, New Brunswick and in universities across the country.
The slowpoke reactor is an item that will open Canada up to modem conveniences for many people. It produces both heat and energy. It can be used to produce hydroelectric power and heat for an entire community. It is an ideal way to go for communities in the North. It is an ideal way to go for new discoveries of mines and service communities. Here is your product. It has almost been perfected. Much of the work is being done at White Shell, Manitoba.
I implore the Government: do not cut off the tap when we are moving on to success. The bottom line will always be there, but if the Government destroys its basis for research and development in the energy sector in this country, it will destroy its future. This makes things difficult for competition in industry. We cannot afford to do that. We talk about vision of the North and Canada as a whole, but we must also have vision in innovation. No highly organized or advanced country in the world cuts off its public commitment to research and development. Every advanced country in the world has a strong public commitment to research and development. Canada's record in this regard is going in the other direction. We have A government saying: "Pay your own way". "The bottom line is important". "Boy, we are going to balance the Budget". Balancing the deficit and the national debt is important.


An Hon. Member:: How important?


Leonard Donald Hopkins: All right, just listen to this. If you go with your research and development, new ideas and facilities, better products, and market those aggressively in the
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world, you will have a new source of taxation. You will have a product that nobody else has and everyone will want. Hospitals around the world want the cobalt cancer therapy unit. Countries around the world want radio medical isotopes. Open up your minds. If we are innovative we can compete with the world.
We will do so, however, only if we support our research and development in this country. If we tell our researchers we have a problem in a particular area let them solve it. Don't cut them off and say: "Look, we are worried about not getting an immediate return. The public will get worried if they do not see another dollar coming in tomorrow morning". You cannot operate that way. You must look at the longer term. That is where you will get your tax base. You will produce efficient industries in this country. You will produce new products in this country that will be in demand world-wide. You will get your tax dollars on those. The more you hold your country back, the less you have faith in your science community to bring in research and development and new ideas. If you have no faith in them, you will have a brain drain from this country. Researchers will go south of the border. They will go to Britain. They will go anywhere in the world because they have an international product to sell; their skills and knowledge. They will be producing things there and competing against Canadians. The entire issue boils down to faith in ourselves. We must have faith in ourselves and in our science community.
Let us talk about commitment. We can only have commitment if we know what is going on around us and what these things mean. You could give the softwood lumber people a break today if there was a will and a commitment to do it, but there doesn't seem to be any will on the part of this Government to do it. There does not seem to be any will on the part of this Government to push for new research facilities in this country, to barge ahead and produce electrical power.
Let us take a look at another facet of this issue.


An Hon. Member:: Do we really have to?


Leonard Donald Hopkins: I know you do not like hearing this because it is too positive. We in the Liberal Party want to put forth positive ideas for you.


Some Hon. Members:: Hear, hear!

May 1, 1989
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Leonard Donald Hopkins: If the Government did not have all the energy that is out there in Ontario, Quebec and New Brunswick, it would not have the tax base it has today because energy would not be there for industry to use. Central Canada has expanded rapidly because of the basic source of energy that was present.
What has the off-shoot of that been? The off-shoot of this solid base of industry has been a great source of taxation to the Government of Canada, the provinces and the municipal Governments. As a result, we will be able to put into place-


The Acting Speaker (Mrs. Champagne):: It is with deep regret that I must interrupt the Hon. Member who has gone quite a few minutes over the allotted time.


Some Hon. Members:: More, more!


Leonard Donald Hopkins: Just one sentence that I wish to add.


The Acting Speaker (Mrs. Champagne):: The Hon. Member may complete his comments. There is unanimous consent.


Leonard Donald Hopkins: I will make my final comment a very pleasant one. With the tax money that will be generated by the good base of industry across this country and our capacity to sell new products around the world, we receive the tax dollars to finance the social programs of this country with respect to medicare, old age pensions and unemployment insurance. That is the route we must take. If we have the faith, the will and the commitment, we can do it.


Some Hon. Members:: Hear, hear!


Mr. Lome Nystrom (Yorkton -Melville):: Madam Speaker, what we have before us today is a Bill to borrow billions of dollars. The Canadian people may be interested to know that we have been asked to borrow an amount not exceeding $24.8 billion by way of loan and sale of securities in Canada. In addition the Government is saying that this year we must borrow an additional $750 million. The grand total is $25.55 billion. That is what the Government of Canada is asking us to borrow. I suggest that is an awful lot of money. At what interest rate will this money be borrowed? What will be the cost in the future? This is a serious debate.
Every year borrowing Bills come before Parliament. Every year they seem to go up and up. It is sad that the Government is usually way off in its forecast about
where the economy will go. If you look at Mr. Wilson's Budget of a year ago, he said interest rates this year would be 7.8 per cent. The average annual interest rate is much higher than 7.8 per cent. The bank rate today in this country sits at over 12.5 per cent.
It is interesting to note in the Budget speech delivered last week the Minister said that Budget measures would cut the annual deficit in half to $15 billion by 1993-1994. We cannot even predict what will happen to the bank rate on Thursday. How do we know that in five years the deficit will be $15 billion? I say that we should stop misleading the Canadian people by making those types of projections in the Budget of Canada.
If one looks at one of the Budget papers entitled Canada's Economic Prospects in the 1990s, it is very clear that the Government knows that we are going into a recession very shortly. What we have before us is a borrowing Bill for more than $25 billion at one of the highest real interest rates since the Great Depression of the 1930s. This Budget will not only increase interest rates, but it will increase the national debt, unemployment, and the welfare rolls of the countiy. In many ways, this Budget will mandate a recession.
Members of the House should look at the budget papers tabled last Thursday by the Minister of Finance (Mr. Wilson). In Table 2 on the Canadian economic outlook it states that expenditures of Gross Domestic Product in 1988 grew at 4.5 per cent. By 1990 it will be down to 1.7 per cent. In 1988, consumption was 4.3 per cent. By 1990 it will be down to 0.9 per cent. In 1988 residential investment was 4.8 per cent. By 1990 it will be minus 8.6 per cent. In 1988, business non-residential investment was 17.8 per cent. By 1990 it will be down to 3.8 per cent. In 1988, machinery and equipment was 21.6 per cent. By 1990 it will be down to 5.6 per cent.
If all those are added together, final domestic demand in 1988 was 5.9 per cent and in 1990 it will be 0.7 per cent. In 1980, housing starts were 223,000. By 1990, despite the expanded population, it will be down to 170,000 housing starts in Canada. In 1988 the Canadian Price Index was 4.1 per cent. In 1990 it will be down to 4.4 per cent.
One of the most important indicators of all, the unemployment rate, was 7.7 per cent in 1980. In 1989 it was 8.2 per cent. In 1990 it will be 8.5 per cent.

According to all the forecasts we are seeing, there is going to be a recession that will start later in 1989. In part, that recession is the responsibility of the Government of Canada because of high interest rate policies and tight money policies. In part, that recession is because the Government did not have the foresight over the last number of years to build a strong economy, come up with new ideas to create wealth and to create additional jobs, to create wealth in Newfoundland or in the outlying reaches of the country in order that people can get off the welfare rolls and the dole and start adding to the productivity of the country. We are borrowing more and more money because the country is less and less productive.


John Horton McDermid: Borrowing less and less money.


Lorne Edmund Nystrom: The Bill before us today is borrowing more than $25 billion. The Minister himself stated that the payments on the debt this year will be $39 billion. One of the big culprits and the reason the debt is so high, or the deficit is so high, is the Government's policy of high interest rates.
Every time the interest is increased on the bank rate by 1 per cent, and sustained over a period of one year, $1.5 billion is added to the deficit; 1 per cent interest in the bank rate, $1.5 billion to the national deficit. If that interest rate of 1 per cent is sustained for one year, it is $1.5 billion. If it is sustained over two, three, or four years it is compounded each and every single year.
In the last two years bank rates have skyrocketed. In March, 1987 the bank rate was 7.14 per cent. On May 1, 1989 it was 12.62 per cent. That is an increase of approximately 5.5 per cent. Over two years the bank rate has gone up by some 5.5 per cent. If a 5 per cent increase in the bank rate is sustained over one year it adds an extra $7.5 billion to the national debt.


John Horton McDermid: Six point four billion dollars.


Lorne Edmund Nystrom: The Minister states the precise figure is $6.4 billion. The high interest rate policy continued over two or three years is a large part of the problem that we are facing today.
The number one challenge of the Government is to find a way to lower interest rates. The Government must realize that a tight-money policy and a high interest rate policy hurts the farmer of Saskatchewan, the worker of Newfoundland, the person tiying to build a house in Toronto or British Columbia, and in particular it hurts small business.
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The real interest rates are among the highest they have been since the 1930s. During the Great Depression, and I do not have the figures with me, it was very seldom that real interest rates went above the 8 per cent mark. In 1981 and 1982 there was a recession. Today, the real interest rate is higher than it was every single week in 1981, except for one week in August, 1981. Today, the real interest rate is 8 per cent. By "real interest rate" I mean the difference between the bank rate and the cost of living. Today, the bank rate is 12.6 per cent. The cost of living is 4.6 per cent. The real interest rate is 8 per cent. That is the highest real interest rate except for one month in 1981 when the bank rate was 21 per cent, the cost of living was 12.7 per cent, and the real interest rate was 8.3 per cent.
We are in serious trouble in this country when real interest rates are at that level. The Government has been timid in terms of instructing the Bank of Canada and the Governor, Mr. Crow, to roll back interest rates. I believe there is some flexibility. The interest rate in Canada is approximately 3.5 per cent higher than that in the United States, comparing our bank rate with their bank rate. The Bush administration does not seem to fear talking to Mr. Greenspan at the Federal Reserve and ordering him to hold down the interest rates. If that can be done in the United States, why can we not do it in Canada? We could roll back interest rates by a couple of points without hurting the economy in terms of the outflow of Canadian dollars. If the dollar is lowered by two or three cents it would be a stimulus to our exports.
Every single provincial premier has called upon the federal Government to talk to Mr. Crow to attempt to lower bank rates in the country. My friend, the Hon. Member for Mississauga South (Mr. Blenkarn) knows that. Mr. Getty has said that, as has Mr. Vander Zalm. The great supporter of the Conservative Party Robert Bourassa has also stated the same thing.

And on the weekend I saw Mr. Bourassa, who likes the Prime Minister of Canada very much. He was very negative towards the Budget of Canada and I know that my friends, the Hon. Members from Quebec here, agree with Mr. Bourassa that the Budget will be hard on Quebeckers. I think that Mr. Bourassa is right: interest rates are too high in Canada and it will be a problem for the Canadian economy for a long time.

May 1, 1989
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The only way we are going to bring down the deficit in the long run is by building a strong economy, strengthening the Canadian economy, creating jobs, bringing down the interest rate, and by putting people back to work. That is not being done in this Budget before the House today. The borrowing Bill is really part of the Budget, just like the Estimates are a part of the Budget. Instead, what we have seen is a high interest rate policy and the biggest tax attack in the history of this country on ordinary Canadians by the Conservative Party across the way. This big tax attack, which takes over $700 out of the pockets of ordinary Canadians, is put on top of the huge tax increases from 1984-88 which cost the average family $1,000. On top of that, we will soon have a national sales tax which will add another $1,000 to the taxes of ordinary Canadians.
Never in the history of this country have we seen a political Party that has taxed, taxed and taxed the ordinary Canadian people as much as the Conservative Party across the way. This big tax attack will hit ordinary Canadians. It will not hit the friends of the Government, the rich, the millionaires or the corporations.

And my friend the Hon. Member for Levis (Mr. Fontaine) agrees with me that his Party is a Party for the rich and big corporations. That is why his friend Mr. Bourassa has now criticized Mr. Mulroney's Conservative Government. It is the biggest tax impact in Canadian history!

I say to you, Madam Speaker, it will not be long before Canadians will say, "We are not going to take this any longer", and we will see the beginnings of a tax revolt in this country. How long can you have ordinary people just paying, paying and paying because the Conservative Party across the way has no imagination in respect to creating jobs and generating wealth in this country, a Party that is afraid to take on the whole question of interest rates and bringing down the bank rate because they are trying to let their friends, the corporations, get off scot-free?

Madam Speaker, I saw many Hon. Members from Quebec on the other side of the House and my friends
from Quebec are aware of the regional development situation. The Budget of the Minister of Finance (Mr. Wilson) is another reason we are now prepared to discuss a bill for $25-billion borrowing authority. But the Finance Minister's Budget we have here reduces regional development expenditures for the Atlantic provinces in 1988-89. We spent $461 million. But in two years, only $410 million will be spent on the Atlantic provinces, the poorest in Canada, a reduction of $41 million for Newfoundland, Nova Scotia, Prince Edward Island and New Brunswick.
Madam Speaker, these are the poorest provinces with an unemployment rate that is too high, but regional development expenditures are reduced. Even in Quebec, where the most recent unemployment figures are still much too high, federal expenditures are cut. In 1988-89, the Government spent $352 million, but in two years, Madam Speaker, your Government will spend $260 million. This is a drop of almost $100 million for the Province of Quebec. Many regions of Quebec have an unemployment rate above 12 or 13 per cent.
Where I come from, western Canada, there is also a reduction of $12 million. This year, the Government will spend $362 million, but in two years, it will be $350 million. Madam Speaker.
And the same goes for Ontario. Ontario is often considered a very rich province, with a lot of money, but I know very well that my friend from Timmins-Chapleau (Mr. Samson), in northern Ontario- It is not a rich region. There is a lot of poverty and unemployment. That region is quite poor. Our country needed programs for northern Ontario and some regions in eastern Ontario. But look at the figures! Even here in Ontario, there is a reduction of nearly $50 million for regional development.
In two years, Ontario will get $59 million, but this year, it was $107 million, Madam Speaker.
And I think of Sudbury and Timmins in northern Ontario and places like Hawkesbury in eastern Ontario. There will be a negative reaction against the federal Government for regional development budget cuts.
Despite this, we have many millionaires here in the Conservative Party who agree with a Budget that increases taxes for corporations by only $1 billion but by $8 billion for individuals.
May 1, 1989

Madam Speaker, it is time to have a government for ordinary Canadians.

It is the same thing with social programs. They are under attack. We have the beginning of the end of universality in social programs in this country. It is the old Chinese proverb: A journey of a thousand miles begins with a single step. What we see now is the beginning of the end of universality in social programs. In fact, with family allowances, some 535,000 Canadians will see either part or all of their family allowances taxed back by the federal Government. Some 132,000 old-age pensioners will see either part or all of their pension taxed back.


Mr. Blenkarn:: Those earning over $50,000.


Lorne Edmund Nystrom: The Chairman of the Finance Committee is always accurate. He is a very honest and open guy. He is very frank. He said Canadians would pay an extra $10 billion in taxes if the Government was elected, through the national sales tax. He says the cut-backs- they call it a claw-back in the Conservative Party by the big Conservative tiger across the way-will apply to people that make over $50,000 a year. And he is right.


Donald Alex Blenkarn: This is taxable income.


Lorne Edmund Nystrom: Suppose we take a family with a couple of kids with one person working making $51,000 or $52,000 a year.


Donald Alex Blenkarn: He won't get clawed back.


Lorne Edmund Nystrom: You are going to have some of that money clawed back if you are making over $50,000.


Donald Alex Blenkarn: That is taxable income.


Lorne Edmund Nystrom: Okay. If you have taxable income of $51,000 a year where one person is working, some of that money will be clawed back.


John Horton McDermid: That means he is making about $85,000.


Lorne Edmund Nystrom: That person might be making a fair amount of money. But what about another family with two wage earners, both making about $48,000 in taxable income. They are making about twice as much money as the first family, yet none of their money will be clawed back. That is not fair. The Chairman of the Finance Committee knows that is true. Where is the fairness, Madam Speaker, when you compare those two families? Do you think it is fair that one family making almost twice as much money would not have any of its income clawed back? If the determination is $50,000 today, how long will it be before that amount is $40,000, or $30,000,
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or $25,000? How long will it be before the social policy in this country becomes the welfare policy and we will have a means test that will hurt ordinary Canadians?

But Madam Speaker, it is not only family allowances, not only old age pensions, not only that, it is unemployment insurance.
The federal Government is now privatizing unemployment insurance by withdrawing from it. Imagine, Madam Speaker, the Unemployment Insurance Commission-

Imagine, the Unemployment Insurance Commission run by Canada's big companies. The Government wants to save hundreds of millions of dollars by withdrawing from unemployment insurance. It will save money by withdrawing from promises made for child care.
You will notice the chairman of the Finance Committee did not talk about child care in the campaign because he knew that once elected the Prime Minister (Mr. Mulroney) would not keep his word and would cut back on promises and commitments he made to the women and mothers and fathers of this country to spend more money on child care.
The Government is cutting back but it is cutting back on social programs. The Government is cutting back but it is cutting back on universality. The Government is cutting back but it is cutting back on unemployment insurance. The Government is cutting back but it is cutting back on regional development. It is cutting back on programs for ordinary people. What it is taxing under this borrowing Bill are ordinary Canadian people right across the country.
I also say to you that what we are seeing now for probably the first time in terms of a budgetary measure is the real Conservative agenda, which is to harmonize our policies and our programs more and more with the programs of the United States. Step one was the free trade deal-


An Hon. Member:: I prefer Argentina.


Lorne Edmund Nystrom: -and they got the free trade deal. A Member across the way said he prefers Argentina. Step one was the free trade deal, free trade with the United States of America where we lose a lot of Canadian sovereignty. Despite the fact that the overwhelming majority of Canadian people vote against that idea, vote against the Conservative Party, because of the quirks in our electoral system we now have free trade.

May 1, 1989
Borrowing Authority
We are now seeing stage 2, that is to harmonize our programs with the Americans, because over the next five to seven years there will be negotiations going on about subsidies and what a subsidy means. What about unemployment insurance? Is that a subsidy? Are our social programs unique subsidies in this country? What about the family allowance, unemployment insurance and workers' compensation, are these unique subsidies in Canada? What we are seeing is the harmonizing of our programs, like unemployment insurance, our social policy and our regional development policy with programs in the United States. What you are seeing is more and more privatization and deregulation in this country because once again that harmonizes our economy with that of the United States of America.
In terms of this borrowing Bill, we cannot support a Bill to borrow money with this kind of economic vision. What the Conservative Party wants to do is to load more and more of the tax load on the ordinary Canadian, and less and less on the rich and wealthy. It is making forecasts and predictions about the future that are probably going to be totally off-base.
We cannot support this borrowing Bill. I do not think the House should support this borrowing Bill. I think the House should vote no to the borrowing Bill. What we have here is a Government with a fiscal vision that gives Canadian people higher and higher borrowing, higher and higher interest rates, higher and higher unemployment, with more and more people living in poverty.
What we should be doing instead is coming up with ideas to create more wealth and more jobs for ordinary Canadians. What we should be doing is lowering the interest rates in this country. We have that flexibility with the United States to lower our interest rates. We could also take more leadership in the G-7 in terms of the international problem of high interest rates. These are the kinds of things we should be doing. We should be helping the farmers and small business more. We should be making sure that the regions of this country that suffer the most in a recession are the regions that are helped.
Instead, what we are seeing is a repetition of 1981-82. In 1981, with high interest rates, the Liberal Government of the day with Mr. MacEachen brought in a recessionary budget. They kept interest rates high. They taxed ordinary Canadians. They cut back on services and expenditures by the federal Government. Those measures by the Minister of Finance speeded up the recession and made the recession deeper for most Canadians.
I come from a region of Canada that has not yet fully recovered from the recession of 1982. Many Members of this House come from a part of Canada that has not recovered from 1981-82. Yet we have a Government that is intent on making the same mistake as 1981-82, some seven or eight years later. What we have in the Minister of Finance is the clone of Allan MacEachen.


An Hon. Member:: What an insult.


Donald Alex Blenkarn: Not really.


Lorne Edmund Nystrom: The chairman of the Finance Committee is not sure. He says not really but there is a certain amount of uncertainty right there.
What people should do, if they want to take the time, is look up the quotes in the House that were made back in 1981-82 by the chairman of the Finance Committee, the present Minister of Finance, the present Secretary of State for External Affairs (Mr. Clark), and by several other Cabinet Ministers and long-time Conservative Members of Parliament. What they were saying to Mr. MacEachen back in 1981-82 was: "Bring down interest rates in this country. They are too high. You can intervene with the Bank of Canada. You can talk to Mr. Bouey. You can bring down interest rates. They are hurting ordinary Canadians." What they were saying at that time was that the national debt was too high. Now the debt in this country has pretty well doubled from what it was four years ago.
What they were saying at that time was to cut back on social programs and cut back government expenditures that would hurt the poor ordinary Canadian. What they were saying at that time was that the regions that would be hurt the most would be the Atlantic Provinces and parts of Quebec and parts of western Canada and northern Ontario. They were right. Yet seven years later the same Party is now on the Government side of the House and they are doing exactly what they said they would not do in 1981-82.
May 1, 1989

It is no wonder that more and more Canadians are treating politicians and politics with cynicism. It is more and more believable that Canadians out there think this is probably the only institution in the world that is run by its own inmates, because we seem to be at times so insane in terms of what we do and what we say.
I remind Members on the opposite side to go back to 1981-82 and take a look at the speeches they made, and take a look at the advice they were giving to Mr. Trudeau and Mr. MacEachen. We were saying similar things back in 1981 that we are saying now. We were saying that Budget would provoke a recession, that Budget would deepen the recession, that Budget would make the recession last longer. We were right. The Conservative Party was saying the same thing.
I see my friend from Halifax is now getting up and leaving his seat with big crocodile tears rolling down his cheeks. He was saying the same thing in those days. He in his heart of hearts knows that his Prime Minister is doing the wrong thing. But he is out there lobbying for a Cabinet post. He does not want to alienate the Minister of Finance and the Prime Minister. He does not have the courage, as has the Member for Portage-Interlake (Mr. Holtmann) who said last night about the closure of the base at Portage la Prairie that if there is any evidence that it is a case of east against west, I will stand up and I will vote against Mulroney in the House of Commons.


An Hon. Member:: Where is he?


Lorne Edmund Nystrom: He does not have the same courage as that lonely soul on the Prairies from Portage la Prairie, that intellectual heavyweight of the Conservative Party who is going to take on the Prime Minister.
I say to my friends across the way, why do they not start the tax revolt in this country? Why do they not start the revolt that says, "This Budget will induce a recession in Canada"? Why do they not become the heroes of this Parliament by standing up and saying, "Look, what we said in 1981-82 was right, and we are going to say the same thing today". The Prime Minister has them on a short leash. They are all afraid of him. There is a good guy sitting across the way, the Member for Cambridge (Mr. Sobeski). I know he is ambitious. I know he wants to be a Cabinet Minister. He knows what I am saying is right. He knows that Joe Clark was right in 1981-82. He knows Michael Wilson was right in 1981-82, but he does
not say a word today. He does not dare say a word today because the Prime Minister has him on a short leash. All these politicians, if they do not make the Cabinet, they can still get some patronage. I notice that Mr. Hamelin, the former Member, has stepped aside for the Prime Minister in Charlevoix so he could represent Baie Comeau. He got another patronage appointment.
These people across the way are afraid to bite the hand that feeds them. That is why two or three years down the road the Canadian people are going to say no, and say no decisively, and throw out this gang across the way and elect a Government that cares for the ordinary people of Canada.


The Acting Speaker (Mrs. Champagne):: Order! It being one o'clock, I do now leave the chair until two o'clock this day.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Hon. Warren Allmand (Notre-Dame-de-Grace):: Mr. Speaker, Canada must support West Germany in its attempt to reduce short-range nuclear weapons in Europe. In this respect Canada must join with other NATO allies to convince the United States and Britain that this is the best option for peace and stability. To pursue the modernization of these weapons, which was targeted for the mid-1990s, will jeopardize seriously the prospect for successful arms reductions in Europe, and undermine the possibilities for phasing out the cold war. The call by the West Germans for the reduction of these weapons would bring us at least one step closer to this goal.
I urge our Government to join with those allies in NATO who seek to curtail these weapons and put an end to the arms race. Canada should take a strong stand right now.

May 1, 1989



THE ENVIRONMENT


Mr. Alex Kindy (Calgary Northeast):: Mr. Speaker, three years ago in April of 1986 a major nuclear disaster occurred in Ukraine. The first hint of a nuclear nightmare reached Scandinavia on a southeast wind. Swedish monitoring devices began to detect abnormally high levels of radiation. Only two days later the Soviet Government admitted that a nuclear accident had occurred in Chernobyl in Ukraine some 100 kilometres north of Kiev.
The fall-out of this accident reminds us of the atomic explosion in Hiroshima. Recent reports indicate that 25 villages around Chernobyl have had to be evacuated because of the nuclear fall-out. There has been significant increase in illnesses, including anemia and breakdown of the immune system, since that accident.
Some 200,000 babies were born in the vicinity of Chernobyl. We should urge the Soviet Government to be open about the medical follow-up of those children so that we know really what effect this explosion has had on their development.
This nuclear disaster should remind the world that we need international co-operation and controls on the proliferation of nuclear devices.



BEATIFICATION OF MARIE-CATHERINE-D E-SAINT -AUGU STIN

Mrs. Suzanne Duplessis (Parliamentary Secretary to Minister of State (Science and Technology)):: Mr. Speaker, last Sunday on April 23, I had the pleasure of attending the beatification of Sister Marie-Catherine-de-Saint-Augustin in Rome, where I represented the Canadian Government at the ceremony led by His Holiness Pope John Paul II.
In 1648, Sister Marie-Catherine-de-Saint-Augustin arrived by ship in Quebec City. An exceptional woman, she directed the construction of the first hospital in Quebec City. She also founded a congregation and devoted her entire life to the destitute.
Mr. Speaker, on behalf of the Canadian Government, I wish to congratulate the communaute des Hospitalieres de Saint-Augustin on receiving this great honour which is also an honour for all Canadians.
Mr. Speaker, I also had the pleasure of meeting His Holiness the Pope, and I must say it was a truly unforgettable and extremely moving moment, and I hope that all Canadian Catholics will some day have a chance to meet His Holiness.



THE BUDGET


Ms. Joy Langan (Mission -Coquitlam):: Mr. Speaker, the Government's campaign to sell its Budget is entitled "Of consuming interest". What is really of consuming interest to Canadians is the cost to us of the current multi-media blitz the Government has launched to sell its tax grab Budget.
Canadians are interested in knowing that the creative and media buy agencies, the radio ads, the TV ads, the print ads and assorted brochures and bumf will cost Canadian families a grand total of about $2.7 million. There can be little doubt that Canadian families would be much happier to see 2,600 new child care spaces created for the children of working families who so desperately need child care. That $2.7 million would have paid for close to 3,000 child care spaces.
Glossy ads are a poor substitute for action by the Government. It has once again demonstrated it is more concerned with image than with the very real problems facing Canadian children.




Mrs. Edna Anderson (Simcoe Centre):: Mr. Speaker, I rise before you today to give my support to the Minister of Finance (Mr. Wilson). He showed courage and farsightedness in addressing our deficit. It was not an easy decision, I am sure, but one that had to be made for the good of our future generations.
The responsibility for the present state of our finances cannot be passed on to successive generations with impunity. We must act now to ensure our children are not burdened with the debts of their forefathers. It is in our interest and their interest to start now rather than later.
May 1, 1989

The Minister has shown the kind of leadership that has earned him the respect of not only his colleagues and fellow citizens but also of people around the world.



TRANSPORT CANADA


Mr. Mark Assad (Gatineau -La Lievre):: Mr. Speaker, the facts must be known. Does the Minister of Public Works realize that the Government's reversal of its decision to transfer Transport Canada to the Outaouais region is a flagrant injustice?
This was an opportunity for the Outaouais to demonstrate its competence and its determination to pursue its economie development.
Representatives from the Quebec side of the National Capital Region have taken a professional and calm stance, without making inflammatory or exaggerated statements. They stick to the facts, and they believed that the Government would stand by its decision.
Why was Transport Canada's lease cancelled? It was certainly not because capital expenditures would be necessary, although the Budget says otherwise.
What is the cost of renting from Campeau Corporation, with repairs? Won't this involve capital spending right away for the Government, expenditures that will require immediate payment?
Finally, and most importantly, when and by whom were senior officials at Public Works ordered to negotiate with the Campeau Corporation?



TRIBUTE TO ALMA WALKER


Mr. Bill Attewell (Markham):: Mr. Speaker, Alma Walker, the great lady of Markham, celebrated her seventy-fifth birthday on April 28.
Last Saturday I attended a reception, along with Alma's relatives and friends, to pay tribute to her. Born in East York, her parents George and Irene Maynard had 13 children, seven girls and six boys. Alma has a daughter Judith, a son Jerry and 11 grandchildren.
In paying tribute to Alma, I want to focus on her over 45 years of public service in elected office in Markham. Alma has achieved many firsts. She was the first woman councillor for the Village of Markham in 1952. She was the first woman mayor of the Town of Markham in 1969. She was the first woman president of the Markham Fair. Alma has also served as a commissioner for Markham Hydro for 33 consecutive years.
Alma, thank you, from the residents of Markham who wish you many more years of health and happiness. God bless.



CANADIAN ARMED FORCES


Mr. Derek Blackburn (Brant):: Mr. Speaker, last week the Government made it clear that it is not willing to act in the best interests of Canada. Nowhere is this more clear than in its wrong-minded plans for the Department of National Defence.
I never thought I would see the day when Canadian troops would be asked by their Government to retreat from Canada. That is what is happening. Seven bases are being closed and seven more are being gutted while we are asked to spend $1.2 billion per year to maintain Canadian Forces in Europe.
Fourteen Canadian communities are under attack from their own Government. This comes at the same time as the Government has laid waste to the very regional development and retraining programs that these communities now need more than ever before. There is concern, confusion and even fear among those who serve in our Armed Forces.
The defence White Paper is in disgrace. The Defence Department is without direction. It is time to reassess all our priorities and ensure that our Armed Forces have the opportunity they need to properly serve the country and to protect its sovereignty. We owe it to those in our Armed Forces to produce a new White Paper.

May 1, 1989



NATIONAL MENTAL HEALTH WEEK


Mr. Guy St-Julien (Abitibi):: Mr. Speaker, I would like to remind the House and the public that this week, May 1 to 7, is Mental Health Week.
For 30 years, the Canadian Mental Health Association has been coordinating activities intended to make Canadians more aware of this field in order to reduce the stigma associated with mental illnesses and to encourage the community to accept those among it who need mental health services.
The Department of National Health and Welfare is glad to take part with the CMHA in this worthwhile effort to draw attention to the importance of all these issues. This year's slogan for Mental Health Week is: Mental health-keep it in mind. We have to find a balance.
Mr. Speaker, all Canadians are invited this week to give their full support to the activities planned by CMHA local offices in their own communities.



CANADIAN ARMED FORCES


Mr. Joe Fontana (London East):: Mr. Speaker, from first to last Michael Wilson's leaked Budget is a national disaster. It is Hurricane Wilson and London has been devastated by it. Each and every person will be hurt by it. CFB London has been slated for closure beginning 1990. The Wolesley Barracks is the home of the 1st battalion of The Royal Canadian Regiment and they have been part of the history and soul of London for more than a century. The killing of CFB London is surely one of the least understandable measures in the Budget. The Minister of Finance (Mr. Wilson) claims that this measure has been taken for the good of the economy, but the loss of the Armed Forces base represents a loss of about $50 million a year to the London economy and hundreds of Londoners are going to be thrown out of work. Yet the Minister's own Budget admits that the annual savings to the Canadian Government in wages, operations and maintenance will be small because the regiment will incur the same operating costs at Petawawa where the regiment is slated to move.
I am calling on this Government to rescind this economic blow to the City of London. All that London asks is to be treated fairly. For the next several days I will be asking all Londoners to sign petitions to keep the base open. I implore the Minister to keep all lines of communication open to us to make our case as to why CFB London should remain open.


Some Hon. Members:: Hear, hear!




Mr. Bob Wood (Nipissing):: Mr. Speaker, last week the Minister of Finance (Mr. Wilson) announced major cuts to the Canadian Forces base in North Bay. If flying activities cease at CFB North Bay, this will mean the movement of at least 400 jobs from my riding to Ottawa. This is totally unacceptable. Why is this Government centralizing at a time when our provincial Ontario Government has demonstrated the sound basis and cost effectiveness of decentralization? This move will cost $20 million to build new hangars in Ottawa. These hangars have already been built in North Bay, and are being used right now. It will also cost approximately $5 million to move the families. We are now up to $25 million, and have not even moved the office equipment and machinery. This $25 million would have to be paid right now.
The Government's rationalization for this is to save $35 million 15 years from now. At the rate this Government is going, it will not save one cent. But this move will have a devastating effect on the economy of North Bay, not to mention the impact on the 400 families. North Bay needs the jobs. This move is just another example of this Government's gross insensitivity to the families and smaller communities of this nation. There is no commitment to the north except to close it down, or maybe there is a hidden agenda. If so, we would like to know about it.



THE BUDGET


Nelson Andrew Riis: Mr. Speaker, the latest Budget makes any person with children and with an income in excess of $50,000 ineligible for family allowance. Does this Minister realize how unfair and discriminatory this provision really is? If you happen to be a single parent or the sole wage earner in a family and receive more than $50,000 a year, you will not be able to collect family allowance. However, if a working yuppie
May 1, 1989

couple both make $49,500 a year, they can collect family allowance. With a combined yuppie income of $99,000 a year, they will be able to keep their family allowance cheque, but the family with only one wage-earner with an income of $50,000 will lose its family allowance cheque. This Budget provision clearly discriminates against single parents and those families where a spouse stays at home to care for the children. This exemplifies the discrimination and unfairness inherent, not only in this Budget but in too many programs and policies of this Government, and it must not be tolerated.



IMMIGRATION

Mr. A1 Johnson (Calgary North):: Mr. Speaker, I rise today to speak on a matter of grave concern to my constituents in Calgary North. They and I are very disturbed that those who have claimed refugee status in Canada, have been afforded due process under our very generous immigration system and have been rejected and deported, are then permitted to immediately return to Canada and begin due process all over again. This manipulation and harassment of our immigration system has put into question its credibility. This abuse is also a great expense to the Canadian taxpayers.
I support an immigration system that takes the time to assess the legitimacy of refugee claims and which demonstrates compassion toward real refugees. However, I believe that once a person has gone through due process, has been found not to qualify and is returned to the country of origin, that the same due process should not be afforded him again. I recommend legislation that is consistent with the need to protect people's rights and at the same time allows Canada to prevent illegal re-entry and immediate removal by the authorities of those who do so.



THE BUDGET


Mr. Robert D. Nault (Kenora-Rainy River):: Mr. Speaker, this Government's plan to further erode passenger rail service in this country is a threat again to Canada's unity. The railway industry built this nation from coast to coast. Further cut-backs to VIA Rail will
Oral Questions
severely affect the future of passenger rail service especially in the more disadvantaged regions of Canada, and more particularly in northwestern Ontario. Many small communities in my riding depend solely on the railway industry for transportation between communities. Areas such as Sioux Lookout, Minaki and Redditt will feel the effects of these cut-backs. A further reduction in the quality of service provided by VIA Rail will lead to the demise of this vital method of transportation in this country. Increased fares will lead to decreased ridership and remove the competitive edge. Lower and middle-income Canadians who rely on passenger rail service will once again carry the burden.
VIA Rail cannot survive in the transportation business under these circumstances. I urge this Government to reconsider its decision on the cut-backs to VIA Rail and provide the necessary funds to allow VIA Rail to modernize and enhance its existing equipment.


Some Hon. Members:: Hear, hear!



ORAL QUESTION PERIOD


Herbert Eser (Herb) Gray: Mr. Speaker, last Friday the Prime Minister, in answering questions about his disastrous Budget, quoted from the pre-Budget submission of the National Council of Welfare in a way that created the impression that the Council supported the Budget's intention to claw back from some Canadians 100 per cent of the old age pension and the family allowance. I went to take a look at that report and here is what it said, prior to the portion the Prime Minister quoted:
Here are some of the options the government could consider to pare more social spending and raise more taxes. The reader should keep in mind that these are not recommendations of the National Council of Welfare, but rather our guess as to some of the changes the Minister of Finance may be contemplating.


Some Hon. Members:: Shame, shame!


Herbert Eser (Herb) Gray: The Council did go ahead and make a specific proposal, and here it is:

May 1, 1989
Oral Questions
There is a fairer alternative, a fairer tax system that protects the poor and collects more tax from the well-off.
So I want to ask the Prime Minister, will he apologize to the National Council of Welfare and all Canadians for his deceptive use of the Council's pre-Budget submission? Will he explain to Canadians, if he was interested in the Council, why he did not adopt the recommendation of the Council and create a fairer tax system with more taxes being paid by better-off Canadians?


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, the Opposition House Leader indeed misleads and distorts today in referring to a response that I gave on Friday. I will ask the Deputy Prime Minister to review Hansard quickly, but I think what he will find is that I referred to this document, Social Spending and the Next Budget, presented by the National Council of Welfare in which they make a statement. I never said it was a recommendation.


Some Hon. Members:: Oh, oh!


Martin Brian Mulroney: The statement is:
The advantage of the clawback 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 benefits should be distributed in a progressive fashion -i.e., the higher your income, the less you should receive, and vice-versa. The clawback does no damage to universality-old age pension and family allowance cheques still would go out to all pensioners and parents, regardless of their income-but it does reduce the net value of benefits to upper-income recipients.
The object of the exercise, as I understood it, was to try to do more for the poor and less well off in Canada. That is exactly what we will do.


Herbert Eser (Herb) Gray: Mr. Speaker, the Prime Minister has not explained why he did not draw to the attention of the House the words that preceded the quote he read, that the quote he read was specifically stated not to be a recommendation to the Government but rather a guess as to what the Government might do.

It is obvious, Mr. Speaker, why La Presse in its April 28 editorial said, "A bad budget, a bad Minister" because we do not have a budget that treats all Canadians the same.


TAX INCREASES
Herbert Eser (Herb) Gray: Mr. Speaker, tax increases on individuals through this Budget in the form of personal income taxes, sales taxes and excise taxes have been increased by $2.6 billion in 1990, and in contrast, corporations face only $410 million in increased taxes.
How can the Prime Minister, his Minister of Finance and this Government try to say to Canadians that this is a fair Budget for all Canadians when there is such an unequal distribution of the tax burden created by his Budget when it comes to corporations and middle and lower-income Canadians?


Martin Brian Mulroney: Mr. Speaker, 1 refer my hon. friend to page 1070 of Hansard on Friday, April 28, 1989, where I am quoted as saying:
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 -
I quoted that statement from this particular report.
I did not say that it was the only statement in a complete report, I said it was a statement from the report. What I have said and what I have quoted is completely on all fours with the statement there.
I specifically said that I refer him to recent statements, not a recommendation, not a suggestion that we should follow, but a statement made by them. That is a complete and absolutely fair quotation.
If my friend is dealing with quotes, perhaps he should refer to a statement made by a guest speaker at the Liberal convention on the weekend, where Adam Zimmerman is quoted as saying the Liberals should stop blindly criticizing and carping about the Government, which he said in some cases is still cleaning up the Liberal legacy.


Some Hon. Members:: Hear, hear!


STATEMENT BY SENIORS NETWORK OF CANADA
Herbert Eser (Herb) Gray: Mr. Speaker, the Budget that was announced last week creates a total increase in taxes since 1984, including the increases through this Budget, of 108.3 per cent for a family with one income earner and two children at the poverty line income level of only $23,639. This is not a Liberal legacy, it is a crime committed by the Conservative Government.
May 1, 1989


Some Hon. Members:: Hear, hear!


Herbert Eser (Herb) Gray: If the Prime Minister wants to know that our comments and criticisms are not blindly carping, let me ask him if he is aware of the official statement of One Voice, The Senior's Network of Canada, the major group of seniors in this country, which said in a statement on April 28:
If we want to maintain true universality, we shouldn't tax benefits through the back door.
It goes on to say:
One Voice would prefer the Government to increase the top income tax rate rather than taking away benefits.
Does the Prime Minister not realize that we are not blindly carping, we are speaking on behalf of Canadians generally, including seniors. Does he not realize that?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, I believe the Hon. Member has been saying that he is looking for a fairer tax system. I want to draw to his attention what we have done over the course of these past four and a half years.
He referred to the increase in personal income tax revenues. I remind him that 80 per cent of that increase is because we have had a healthier economy, only 20 per cent because we had an increase in tax rates.
Let me also remind him that measures such as the elimination of the scientific research tax credit, the minimum tax, the elimination of a number of tax shelters, including yachts, houseboats and hotels, the carve-out provisions for the oil and gas industry, are all steps designed to provide a fairer tax system in addition to the large corporation tax and the high income surtax in this budget.
Let me expand on what Adam Zimmerman said: "Rather than wasting your time hurling insults in Parliament and elsewhere, why not study and really learn about the issues".


Some Hon. Members:: Hear, hear!


CUT IN SOCIAL PROGRAMS
Mr. Douglas Young (Gloucester):: Mr. Speaker, my question is directed to the Prime Minister. We have heard versions of what was said at the Liberal convention on the weekend with respect to cleaning up the mess. However, I suspect that many of us have heard a lot of things over the weekend about trust and the Budget.
Oral Questions
We have seen the day care program dumped, unemployment insurance slashed, medicare benefits cut back, family allowances and old age pensions taxed. I ask on behalf of many Canadians who have heard much about this whether social programs and universality in Canada are still sacred trusts.


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member, in posing that question, is ignoring the essential motive behind the Budget. The essential motive behind the Budget is to get the debt under control, to pay particular attention to the fact that since 1969 our interest costs on that debt have grown from 12 cents of every tax dollar to the current level of 35 cents for every tax dollar. If we do not get this under control, that 35 cents will go higher, and those social programs that the Hon. Member talks about will be squeezed out.
Our commitment on this side of the House is to maintain those social programs and take the actions now that will maintain those social programs.


M. Douglas Young: Mr. Speaker, I guess trusts are not as sacred as they used to be.


CUT IN ESTABLISHED PROGRAMS FINANCING
M. Douglas Young: Mr. Speaker, last fall during the election campaign we heard a lot of talk about good management and good managers.
My supplementary question is directed to the Prime Minister. In view of the fact that there has been a $2.9 billion cut in EPF funding and medicare and post-secondary education will fall increasingly under the responsibility of provincial Governments, is the policy of the Government with respect to management to switch the responsibility for maintaining essential programs to provincial Governments across the country because the federal Government cannot fulfil its responsibility?


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member neglects to say that there will be a substantial increase in Established Programs Financing, in the order of $25 billion for the next five years, relative to the last five years. We are maintaining our commitment to these important programs.
The Hon. Member has to realize that if we do not get this debt problem under control, because our interest costs as a percentage of our revenues are far higher than the provinces and the impact they have on interest rates is so much higher, we will leave a mess to our children, which we believe is not the right thing to do. We must get this problem under control and we are committed to doing that.

May 1, 1989
Oral Questions NATIONAL REVENUE


INCOME TAX DEDUCTIONS
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is directed to the Minister of Finance. Fie knows that today is the last day for Canadians to send in their income tax return. He also knows that probably the most offensive aspect of his Budget is the hypocritical claim that Canadians are being asked to pay fairly, that the burden is being distributed fairly.
Will the Minister admit that since the Conservatives were elected in 1984, the richest 1 per cent of Canadians, those who drive around in their BMWs, will have an income tax reduction of $905, including this Budget? That is a $905 tax cut while the average family has had an increase of over $500 in income tax since the Conservatives were elected.
My question is directed to the Minister of Finance. Is it fair that with this Budget the rich will pay much less and the average family pays much more once again?


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member is using very selective information. If he looks at this Budget, he will see that a single person under 65 will pay $2,175 as a result of personal income tax changes. That applies to an individual earning $200,000. If that person is earning $30,000, the increase is $80. That is a significant difference. To put it in terms of percentage of income, it is .3 per cent for the lower income levels and 1.1 per cent for the upper income levels.
I ask the Hon. Member to remember what we have done in removing a number of tax loopholes, some of which I referred to in my previous answer. We have taken many measures, and I have yet to hear any acknowledgement from the NDP that we have done these things. I have also yet to hear any suggestion from them for new measures.


CAPITAL GAINS TAX
John Edward Broadbent: The Minister of Finance's nose should grow a foot in length after that statement. He has received all kinds of suggestions from this side of the House. He did not admit that the richest 1 per cent of Canadians are paying over $900 less tax since this Government was elected in 1984. I say to the Minister of Finance, that is a disgrace.
My question is directed to the Minister of Finance. He was meeting his constituents on the weekend. I see in a newspaper report that one of them had the audacity to ask him why the Government was continuing with a complete exemption of capital gains tax up to $100,000. In the United States, Americans pay taxes on capital gains. In the Minister's riding, as elsewhere, if you make $100,000 in capital gains, you do not have to pay one cent. The Minister said: "We don't think it is appropriate to close that gap. It is a principle we want to establish into the future". Is the principle that the rich will continue to get a free ride?


Michael Holcombe Wilson: I want to tell the Hon. Member what the principle is. The principle is that we want to encourage growth and investment in this country. We have narrowed the gap significantly between normal income tax rates and investment tax rates designed to encourage investment and job creation.
I ask the Leader of the New Democratic Party, is he against that particular provision going to farmers and small business people? It is directed to those people. That is how jobs are created in this country.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: I say to the Minister, don't give us that stuff. The rich are paying less than when you were elected in 1984.

But the Minister mentioned taxes on small businesses. The Minister knows very well that in the United States, there is a minimum tax on profitable corporations. Instead of imposing a minimum tax on profitable corporations here, the Minister of Finance increased taxes on small businesses.
Why this unfairness? Small businesses will pay more with this Budget, but many profitable corporations will not have to pay a cent. Is that the Conservative justice?


Michael Holcombe Wilson: Mr. Speaker, let me summarize some tax changes in this Budget. There is a new tax for high corporations that will increase the total amount of corporate tax revenues by over 7 per cent. We have increased the personal income tax surtax, including a high income surtax. Those taxes have been increased by 2.3 per cent, a good deal lower than the increase on corporations. We have also increased substantially, in fact doubled the refundable sales tax credit to help those people in lower income brackets.
May 1, 1989

We have increased the tax rate on small businesses from 12.4 per cent to 12.8 per cent. It is not a large increase, but one that asks small businessmen to share in the burden of fighting the problem of our national debt. That is the direction in which we are headed. We must share and spread the burden so that people who are capable of paying more will pay more.


PRESENCE IN GALLERY OF DELEGATION FROM EUROPEAN PARLIAMENT
Mr. Speaker:: I wish to draw to the Members' attention the presence in the gallery of a delegation from the European Parliament led by Mr. Roberto Costanzo.


Some Hon. Members:: Hear, hear!


PRESENCE IN GALLERY OF SECRETARY-GENERAL OF NATO
Mr. Speaker:: I also want to draw to Members' attention the presence in the gallery of Doctor Manfred Womer, Secretary-General of NATO.


Some Hon. Members:: Hear, hear!


NATIONAL DEFENCE
Mr. Fred J. Mifflin (Bonavista-Trinity-Conception):: Mr. Speaker, my question is for the Minister of National Defence. We saw on television over the weekend the shock, disappointment and even disbelief of hundreds of military and civilian people in Portage La Prairie over the abruptness and suddenness of the announcement to close their Armed Forces Base. As we have heard here today, many others share the same boat. Can the Minister give this House the military and economic rationale behind the plans to close the base in Portage La Prairie?


Hon. Bill McKnight (Minister of National Defence):: Mr. Speaker, as the Hon. Member knows, there are three ways of reducing expenditures and putting dollars forward to acquire the necessary equipment. The socialists on my right are suggesting we should cut the bases in Europe. I want to say that will not happen. Our continued commitment to NATO and the people there
Oral Questions
at this time and the numbers in Europe will be maintained.


Some Hon. Members:: Hear, hear!


William Hunter (Bill) McKnight: In reducing operation and maintenance costs and in reducing capital and bringing into balance expenditures in the Department of National Defence, to personnel and capital, we can then provide the equipment that is necessary for the men and women who serve Canada.


CALL FOR ALTERNATIVE ECONOMIC MEASURES
Fred J. Mifflin: I want to zero in on the original question. I want to ask the Minister, in view of studies that have been carried out, what alternative economic measures are being considered by the Government to compensate the 13,000 people of Portage La Prairie for the devastating effect this loss of $120 million will have?


William Hunter (Bill) McKnight: Mr. Speaker, no one takes pleasure in closing military bases. The necessity of those actions are when $2.74 billion are reduced from a Department. We must look at operation and maintenance, capital, and personnel.
The Portage La Prairie Base is used for preliminary training. That base will maintain itself until we have an opportunity to explore the options of contracting that training to commercial enterprise. They may very well choose Portage La Prairie for an operations base if that is the direction the Department takes.


THE BUDGET
Lorne Edmund Nystrom: Mr. Speaker, my question is directed to the Minister of Finance. "We are in the process of building two Canadas, one which is rich and promising, and another which is underdeveloped and underemployed". Those were the words of the Prime Minister on March 17, 1987. In light of the Prime Minister's words two years ago, I wonder how the Minister of Finance can justify a cut-back of 21 per cent in spending on regional development from this fiscal year to next fiscal year? How does he justify the slashing and cutting of 21 per cent in the poorest parts of Canada?

May 1, 1989
Oral Questions


Michael Holcombe Wilson: Mr. Speaker, first of all, the facts state that over the last four years regional spending has increased by 50 per cent. The facts also state that as a result of this Budget there will be an increase of a further 35 per cent on top of the amount of spending that we have had over the last five years.
In terms of improving a better balance of economic activity across the country, surely the Eton. Member will agree, because he has stated it on a number of occasions, that we must get interest rates down. The only way that we can get interest rates down is to get the annual deficit down and get control of the national debt.
The Member has to stop speaking out of both sides of his mouth. If he wants to get interest rates down, he has to get the annual deficit down as well.


JUSTIFICATION FOR CUTS IN SPENDING
Lorne Edmund Nystrom: Mr. Speaker, the facts also state in his own Budget papers on page 68 that there will be a 21 per cent cut between fiscal year 1989-90 and fiscal year 1990-91.
Will the Minister explain to the people of Canada how he can justify a cut in the next fiscal year of $90 million in regional development funding for Atlantic Canada? How can he explain a cut of $109 million in Quebec? How can he explain a cut of $28 million in Ontario? How can he explain a cut of $66 million in western Canada?
How can the Minister justify those cuts to the poorest and most disadvantaged parts of Canada in light of the fact that the Prime Minister recognized it as a problem two years ago?


Hon. Harvie Andre (Minister of Regional Industrial Expansion and Minister of State for Science and Technology):: Mr. Speaker, as the Minister of Finance pointed out and is clearly evident in the documents, regional spending will continue to go up as it has.
I find it passing strange that members of the New Democratic Party state that we should cut support for business, and then state that we should spend even more than we are spending in terms of contributions to business through our regional development programs.
Are members of the NDP in favour of more support to business regionally? If so, that will be factored in in terms of the next Budget. If Members opposite are opposed, why are they complaining?
In any event, if Members opposite look at the numbers objectively, and not from the perspective of class warfare which the NDP seems to be locked into, they will see that there was an increase.


FREE TRADE AGREEMENT-DISMANTLING OF PROGRAMS
Mr. Bob Speller (Haldimand - Norfolk):: Mr. Speaker, during the election campaign the Prime Minister stated that the Free Trade Agreement would have no effect on regional development programs, would have no effect on agricultural subsidies, and would have no effect on the supply managed sectors.
My question is directed to the Minister of Finance. Will he now stand in the House and say that the Prime Minister and his Government have once again deceived the Canadian public? This Budget is only the beginning of dismantling all the unique programs that we have in Canada, the programs that make agriculture and our farmers so great.


Michael Holcombe Wilson: Mr. Speaker, there is absolutely no connection, no association whatsoever between the measures that we have taken in the Budget and the Free Trade Agreement itself.
Many times during the election campaign I pointed out that, if we do not get our deficit and our debt problems under control, that will totally undermine any benefits that will come from the Free Trade Agreement. The debt and the deficit problems are there standing very large and must be dealt with, with or without a Free Trade Agreement.


AGRICULTURE SUBSIDY PROGRAMS
Robert (Bob) Speller: Mr. Speaker, Canadian farmers are good people and they do not deserve an answer like that.
On Friday we found out that the United States Government has accused Canada of restrictive trade practices. One of the areas the Americans mentioned in their hit list is that of freight rate subsidies.
Surprise, surprise, Mr. Speaker. What do we find in the Budget? We see that the At and East grain and flour
May 1, 1989

subsidy program is being cut. There are also other agricultural cuts that the Americans demanded. There are cuts in crop insurance, cuts in the Canadian dairy export subsidy program, cuts in the Prairie Grain Advance Payments, and a partial termination of fuel tax rebate programs.
Why does the Minister of Finance not admit that his office did not make up the Budget, but in fact the office of the Minister for International Trade made up the Budget, and that he had already given up negotiations on agricultural subsidies before they even began.


Hon. Don Mazankowski (Deputy Prime Minister, President of the Privy Council and Minister of Agriculture):: Mr. Speaker, the premise of the Hon. Member's question is absolutely false.
We are now seeing a bit of what the Liberal finance critic talked about when he said that every sparrow that falls is going to be blamed on the U.S.-Canada Free Trade Agreement. Here is a good example.


CRIMINAL CODE
Bill Attewell: Mr. Speaker, my question is for the Minister of Justice. When the election was called last fall, one of the important Bills that died was C-54, an Act to amend the Criminal Code regarding pornography. The Government has talked repeatedly about the vital role of family life in our nation, and the need to bring in tough legislation to at least deal with the publication of certain despicable types of pornography. I refer to the sexual exploitation of young children.
Is the Minister really sensitive to the concerns of thousands of Canadians on this issue? If he is, how soon will he bring in legislation?


Douglas Grinslade Lewis: Mr. Speaker, my colleague is correct. Bill C-54 died on the Order Paper. Before it did, it provoked a great deal of public discussion. Two of the areas in which there was a general consensus were child pornography and pornography depicting violence. Those two areas are being actively studied by the Ministry at the present time.
Oral Questions THE BUDGET


LEAK OF DOCUMENT
Mr. John Nunziata (York South-Weston):: Mr. Speaker, my question is directed to the Minister of Justice and it concerns the cause of the Budget leak.
Last week the Prime Minister referred to the leak as "a crime". The Finance Minister referred to it as "a wilful criminal act". The Solicitor General referred to it as "a very serious theft". The Justice Minister himself referred to it as "a theft".
My question to the Minister of Justice is the following. Is it still the position of the Government of Canada that the Budget leak was caused by a criminal act?


Douglas Grinslade Lewis: Mr. Speaker, the House will know that this matter is presently being investigated by the RCMP. The charges, if any, which are laid, will obviously have to await the outcome of that investigation.


POSSIBLE CRIMINAL ACTION
John V. Nunziata: Mr. Speaker, last Thursday and Friday Canadians were led to believe, in fact they were told by Ministers of the Crown, that the Budget leak was caused by a criminal act. Today the Government is not so sure.
Can the Minister of Justice indicate to the House and to Canadians what has changed? What has caused him and his Government to change their minds?


Douglas Grinslade Lewis: Mr. Speaker, in all discussions surrounding this event one has to be very careful as to who said what.


John Edward Broadbent: You said one thing and the Prime Minister said another.


Douglas Grinslade Lewis: That is absolutely false. During the telecasting of the evening the comment was made by someone on one of the telecasts that it was a crime. That has been taken up in the vernacular. There will be no discussion on this event until the criminal investigation is finished.


SECURITY AT PRINTING BUREAU
Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, my question is for the Minister of Supply and Services. It also concerns the leak of the Budget, in particular the security at the main printing plant in Hull.

May 1, 1989
Oral Questions
Last Thursday, the Minister of Supply and Services in response to being asked why extra security personnel at the main plant had not been hired this year, as was the case for previous Budgets, said to the House "all precautions that have been taken in previous years were applied again this year".
Can the Minister of Supply and Services tell this House why he made that statement when, in fact, no extra security had been hired this year contrary to what was done in previous years? In addition, why was this less than accurate information provided to the House?


Hon. Paul Dick (Minister of Supply and Services):: Mr. Speaker, it is unfortunate that the Hon. Member does not know what he is talking about. The facts are that five years ago the Budget level of security then in place was applied on a 365 days a year basis. It has been fully in place for the last five years up to the exact period of two and a half weeks ago. When we published this year, there were ten extra security personnel.


SAFETY NET-GOVERNMENT'S POSITION
Don Boudria: Mr. Speaker, I wish to direct my supplementary question to the Minister of Supply and Services. Last week, he said categorically that the same amount of security was provided for the Budget this year as in other years. Today again, he gave us an answer. He still has not told us whether it was the same amount. Is he ready to admit that the extra security provided in other years was not provided this year? Yes or no? Can he tell us once and for all instead of skirting around the issue?


Paul Wyatt Dick: Mr. Speaker, if the Hon. Member is talking about the number of people, I said there were ten more this year than there were last year. That is an increase. That is an improvement.
I would also like the Hon. Member to know that over a period of time, five years, three years, different techniques are used. Two years ago we had security specialists in. We have adopted some new methods. But we have had the same overall strategy and method used in the last three and four years. This year we had even more people.


AGRICULTURE
Mr. Vic Althouse (Mackenzie):: Mr. Speaker, last November 10 during the election the Minister for Grains and Oilseeds announced a $850 million National Drought Program and wheat producers were told to expect between $40 and $45 per acre in aid. Four days later the Minister said that there was no cap on the money, that if the $850 million was not enough there could be more.
Since then we found out that the provinces were never consulted and were not to be part of the funding. Yet we see in the Estimates $425 million or half of the amount. What happened to the program? Where is the money? Will farmers still get $40 or $50 an acre?


Hon. Charles Mayer (Minister of Western Economic Diversification and Minister of State (Grains and Oilseeds)):: Mr. Speaker, what is happening? The program is well under way. As of the beginning of this week we have over 50,000 cheques in the mail which amount to approximately $200 million to farmers.
If the Member is wondering about what is going on as far as the Estimates are concerned, he should know that some of the money went out in the previous fiscal year. The Hon. Member shakes his head. Perhaps it would be better if he shook his hand because it wouldn't rattle quite as much as when he shakes his head.


Some Hon. Members:: Oh, oh!


Charles James Mayer: The Hon. Member should know that part of the money went out in the previous fiscal year. Some of it is going out now. If supplementary estimates are required, that will happen. But essentially nothing has changed from the time that we announced the program last November 10 and nothing at all has changed since the Estimates last Friday.


TIMING OF PAYMENTS
Victor Fredrich (Vic) Althouse: We have checked with officials, Mr. Speaker. The $425 million takes into account all of the moneys from the previous Budget and the previous allocations. There will only be $425 million allocated for this program. The next set of supplementa-ries never come until September or October. The Minister has assured us time and time again that this payment would be out before the end of June. Where will the money come from?
May 1, 1989


Charles James Mayer: Mr. Speaker, there were consultations with the provinces, contrary to what the Hon. Member says. There are still ongoing consultations and the program is one on which we are still working with the provinces. The money will come and when farmers get it they will be very grateful for receiving it. It is something that they need and they are going to find useful in June and July. The Hon. Member is a farmer. He is one of the only farmers on the other side of the House. He will know that in June and July farmers need money to pay fertilizer bills and that money will be there. As I said, nothing has changed from last November when we announced the program and nothing at all has changed since the Estimates were announced on Friday.

[Translation \


SPACE AGENCY
Hon. Andre Ouellet (Papineau - Saint-Michel):: Mr. Speaker, my question is directed to the Prime Minister. I don't have to remind the Prime Minister that the decision to locate the Space Agency in Montreal came as a result of broad consultation, after seeking a consensus throughout the province of Quebec.
Could the Prime Minister give the House the assurance today that the Space Agency will be built in Montreal? Otherwise, how does he intend to explain to contractors, unions, academics and the media that once again, the Tories failed to keep their promises?


Harvie Andre: Mr. Speaker, I made an announcement in Montreal, on March 1. I quote from the announcement of that day:
Oral Questions

Canada's Space Agency will be located in the metropolitan area of Montreal, a centre famous for its excellence in the aerospace industry.

That was a decision I announced, and that decision remains.


POSITION OF PRIME MINISTER
André Ouellet: Mr. Speaker, the Minister's reply is a clear indication there was a fight about this in Cabinet. It seems that the Minister for the South Shore won and the Minister responsible for Montreal's economic recovery and development lost. I would like to put the following question to the Prime Minister. Since his Minister who was formerly responsible for Montreal was labelled as insignificant by Laurent Picard, what is the Prime Minister going to do to ensure that the Minister of Labour, who is now responsible for Montreal, is not labelled as a weakling?


Martin Brian Mulroney: Mr. Speaker, first of all I think these comments are rather unusual, coming from a gentleman like the Hon. Member. As far as I know, Laurent Picard never made that kind of remark about anyone.
Second, the Minister went to Montreal. He held a press conference, and he indicated the Government's intention to locate the Space Agency in the metropolitan area of Montreal. That was exactly what he said at the press conference. To us, Montreal is Greater Montreal, the metropolitan area. Is the Hon. Member trying to say that the people on the South Shore or the North Shore or west of Montreal are not allowed any hope of prosperity? To us, Montrealers and Quebeckers are first-class citizens. All of them.


Mr. Speaker:: A single question for the Hon. Member for Lambton-Middlesex, please.


AGRICULTURE
Hon. Ralph Ferguson (Lambton-Middlesex):: Mr. Speaker, my question is directed to the Minister of State for Grains and Oilseeds. I want to remind him that he was the one that made the announcement on November 10 of $850 million in drought and crop assistance for Canadian farmers.

May 1, 1989
Borrowing Authority


An Hon. Member:: Do you have a speech. Ferguson?


Ralph Ferguson: The Minister included $30 million in Governor General warrants. There is only three hundred and some million dollars in the Estimates for 1989-90. Can the Minister come clean and tell Canadian farmers when they will be getting their final payments and how much they will amount to?


Charles James Mayer: Mr. Speaker, let me say again that the program was announced on November 10 and nothing has changed. The program is well under way. Some of the Member's neighbours are getting cheques. I think when he goes home and talks to them he will find that out. Nothing has changed as far as the Estimates are concerned, tabled last Friday by the President of the Treasury Board.
Let me also remind the Hon. Member that this is the Government that provided $1.1 billion worth of assistance a year ago because of low prices and this is the Government that provided $1 billion two years ago to assist farmers.
Again, if the Member wants to go home and talk to some of his neighbours who participated he will learn that they very much needed the assistance, and we were happy to be able to provide it for them.
We are on record as being able to provide assistance for farmers when they need it and the same applies concerning this program, Mr. Speaker.


Mr. Speaker:: The Hon. Member for Vancouver East, a single question please.


THE BUDGET
Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, my question is for the Minister of Finance who promised to protect those in greatest need.
Why has the Government cut $16 million from Secretary of State programs for new Canadians, women, native Canadians, and minorities, when their advocacy groups have no other source of funding and they are absolutely essential to work for equality?
In particular, why has there been a punitive 50 per cent cut over three years for the National Action Committee on the Status of Women? Is this fair?


Hon. Gerry Weiner (Secretary of State of Canada and Minister of State (Multiculturalism and Citizenship)):: Mr. Speaker, as everybody else in this Government has been saying, and I concur entirely, the debt had to be controlled.
There has been some restraint. We have seen our program funding curtailed by some $10 million over the next program year, but indeed we will still have $450 million to assist groups working toward equality and social justice in the areas of multiculturalism, citizenship and official language programs. That is an increase of over 23 per cent over the last year.


Some Hon. Members:: Hear, hear!
* *


CRIMINAL CODE
Mr. Girve Fretz (Erie):: Mr. Speaker, my question is about the value of life. I would like to direct my question to the Minister of Justice.
When will he introduce legislation to protect the lives of the unborn?


Douglas Grinslade Lewis: Mr. Speaker, the Borowski decision by the Supreme Court cleared the way for active consideration of this matter.
I can tell the House that that consideration is taking place and that we are working toward cabinet and caucus decisions in the near future in order that this matter may come to a decision and be brought to the House.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson (Etobicoke Centre) that Bill C-ll, an Act to provide borrowing authority, be read the second time and referred to a legislative committee.
The Acting Speaker (Mrs. Champagne):: Order. When the House rose at one o'clock, the Hon. Member for Yorkton-Melville had the floor.

May 1, 1989


Lorne Edmund Nystrom: Madam Speaker, I only have about two minutes to go. I want to reiterate to Members of the House that we have a chance here to stop this borrowing Bill. This borrowing Bill is part of the Budget of Canada, which we all know as that big tax attack on the ordinary Canadian people. An increase of $700 for every average Canadian family is being imposed by this Government across the way.
We have a chance to say no in terms of the Budget, and a chance to say no in terms of the borrowing Bill. It has been the most massive tax attack, the most massive tax grab in the history of this country, imposed by the Conservatives on ordinary people.
Second, the Government does not have the courage to bring down interest rates. We are now at the highest real interest rate in this country since the 1930s, and the Conservative Party with its high interest rate policy is hurting ordinary Canadians, driving up the national debt, and throwing more people onto the unemployment rolls. It is about time that we know.
There has been one Conservative Member for Portage-Interlake who has had the courage to get up and say that he may lead a revolt of back-benchers. I hope more Conservative Members of Parliament will join him and lead a revolt against this Party across the way that is raising taxes, raising interest rates and throwing people out of work.
As I mentioned in Question Period, in regional development spending alone, for the net fiscal year the cut-back will be 21 per cent, or $293 million. This is a penalty on the poorest and the most disadvantaged people of this country. It is a penalty imposed on northern Ontario, the Gaspe, Newfoundland, and western Canada. The time has come to say no, and to say no massively to the Conservative Party across the way.


Donald Alex Blenkarn: Madam Speaker, I do not know how many times I have risen in this House and spoken on a borrowing authority Bill. It is before us again in this Parliament with roughly the same kinds of moneys that we have been faced with far too many times.
It would be good if we could get some common sense from the Opposition. It would be good if we had some suggestions on what to do. My friends on the other side speaking on this Bill say that you cannot have the money and that you have to spend more money. Presumably they do not understand the facts of life. The fact is that
Borrowing Authority
despite many, many cut-backs in this Budget, the amount that we are going to wind up short on a budgetary basis is $30.5 billion.
We have done some work on the national accounts, and of course that determines the amount of money we really must borrow. Because of money coming into the Government through pension deductions and other funds that the Government has, the Government will really only have to have a total of $20.5 billion as a borrowing requirement for further borrowing for this year.
On top of that we need a contingency allowance. We need some money to replace the money that will be coming in as revenue in the balance of things in the exchange account. We need some money to pay for the money that has already been borrowed this year on Governor General warrants. The effect of this Bill is a requirement to authorize the borrowing of up to $25.55 billion.
Let us say some things about the financing of any country. When we have a Budget we have to determine from where we are going to get the money. We can do that by taxing more, but we have been told that the people of the country are to have a tax revolt and that historically we are the Government that has taxed the most. We have been told that we cannot tax any more. Perhaps we are being told that we cannot even tax what we have taxed.
We have also been told that the other way of handling it is to spend less. However, every single bit of spending program where there has been an iota of cut in this Budget has been attacked by the opposition Members. Every single bit of spending, where there is an iota of cut, has been attacked. They do not have the common sense to say: "You did not cut enough". They do not say that we should cut more. They say that somehow, somewhere, a little bird will come down and give us the money.
I suppose there is another way. We could print it. That is really the suggestion that comes from the Hon. Member for Yorkton-Melville (Mr. Nystrom). He stated that we have to cut interest rates. He states that how we do that is as the Governor of the Bank suggested. We print the money, we have the problem solved, we pay our bills and the growth of the economy will cure the debit. To cure the debit, we just go ahead and print it. He says that we will cut interest rates that way.

May 1, 1989
Borrowing Authority
Has he ever look at the interest rates of countries where they in fact handle their debt that way? Has he looked at the interest rates in Argentina, Brazil, Israel or Yugoslavia. That is how they did it there. That is the mess they are in. He would have us pay our bills with the printing press because that is the only other way. We either tax it or we spend less or we print it unless we borrow it. I do not like borrowing any more than he does. I wish we were not borrowing any money. We are borrowing far too much money. I do not think that there is a Member in this House who can proudly stand up before his or her family and say: "I have been part of a House of Commons that has put the country in the hole by $321 billion, and I am going to put you in the hole by another $25 billion by the time I am finished this year". Are Hon. Members opposite really happy about that?


Some Hon. Members:: No.


Donald Alex Blenkarn: None of us are happy about that. We have an obligation as Members of Parliament to do something about it. We do not do something about it by saying: "Oh, I am not going to bother worrying about mathematics. I am not going to bother worrying about the facts of life". Something can be done about it by cutting the appetite we have for government programs. We can do that.
We have a series of committees in this House, some 21 of them, that have Estimates referred to them. Those committees could sit down with the bureaucrats and the Ministers involved and go over those budgetary costs line by line. They could say: "You can get rid of this, or you can get rid of that. Cut it down". Where are the resolutions of members of the Opposition that can be placed right now on the Order Paper to cut down government expense? We do not have to vote the Estimates the way they are presented. They could be cut back. If some good reason could be shown as to why they ought to be cut back I am sure there are all sorts of people on this side of the House who would say: "Aye, aye. Let us do that". Do Members opposite say that? No, no, no. Listen to them, Madam Speaker.
The Member from Pembroke, who is a member of the Liberal Party, talked about the Post Office this morning. He said: "You should not take any money out of the Post Office. Let it keep its $300 million. Cut postal rates or something like that but spend more". With respect to UI he said: "It is terrible, you are being unconstitutional.
Spend more". With respect to VIA Rail he said: "The heart of the nation is at stake here. Spend more". Concerning Atomic Energy of Canada he said: "Keep your corporations. Do not privatize them. By golly, do not sell good assets to the private sector where they really will make money. Spend more and keep them in the control of the Crown".
Let us turn to what the Hon. Member for Yorkton- Melville (Mr. Nystrom) said. He said: "My goodness, it is an attack on social programs. We are going to tax back, claw back, money paid to pensioners who have over $50,000 of taxable income. My goodness, we can't do that. By George, we have to protect the rich no matter what in terms of universality. We are going to borrow the money to pay it to them. We are going to print the money to pay it to them. But they will be universal". Members of the New Democratic Party believe in social justice for the rich. The other day the Leader of the New Democratic Party stood up and asked a question of the Minister of Linance (Mr. Wilson). He asked about teachers on pension. Presumably, there are teachers who receive pensions in excess of $60,000. Some of them are going to lose some of their old age pension. Is that not sad? Is it not sad that we have to say that we cannot afford all the things we would like to give and all the things we would like to take?
When will members of the Opposition come back to us to say: "It is about time we gave for Canada. It is about time we did something for Canada. It is about time we did not grab everything we could". The job of a Member of Parliament is not to take, take, take and to pretend to one's constituents that somewhere behind Parliament Hill there is an orchard where money can be picked off the trees. It is time we had an honest Opposition.


Some Hon. Members:: Oh, oh!


Donald Alex Blenkarn: It is time we had the view of members of the Opposition with respect to what is fair to make the country grow.
We have a problem with our debt, but it is not as bad as it was when we took office in 1984. The amount of our borrowing requirement was 6.7 per cent of the Gross Domestic Product. In other words, we had to go out in the marketplace to borrow 6.7 per cent of the Gross Domestic Product just to break even. This year we will have to borrow 3.2 per cent of the Gross Domestic Product. That is less than one-half of the borrowing we had in 1984 in terms of the burden on the economy. The dollar amounts are not that far different. However, they are not what is concerning us.
May 1, 1989


Peter Andrew Stewart Milliken: It should be.


Donald Alex Blenkarn: The dollar amount borrowed in 1983-84 was $24,700,000,000. In 1984-85 it was $31,850,000,000. In 1985-86 it was $30,200,000,000.
The fact is that we have reduced the requirement in absolute dollar terms. We have reduced the requirement as a percentage of Gross Domestic Product to less than half of what it was. However, that is no answer. The debt gets bigger and the amount of money required to carry it gets bigger. If we add $25 billion to the gross this year at 10 per cent interest it will amount to $2.5 billion. At 12 per cent interest it comes out to $3 billion in additional interest. This means that right now our debt is reaching what amounts to a critical mass. The country has to grow and taxes have to grow by just $3 billion more in order to cover the additional interest on the additional debt. That is a real problem for any government.
We are in the position of having to come to grips with that problem. In the Budget we hope to be able to reduce the demand to 0.3 per cent of the Gross Domestic Product in the 1993 borrowing authority Bill. We hope in 1994 not to have a borrowing authority Bill. We hope then to pay back some of what we have borrowed.


Nelson Andrew Riis: Hope, hope, hope!


Donald Alex Blenkarn: My friend says that if one hopes enough it will go away.


Nelson Andrew Riis: Do something.


Donald Alex Blenkarn: We have been doing something. However, we have not had the co-operation that we should have had, particularly from a Party that claims that it is trying to build a country. It is not easy to solve the various problems and demands in this widespread country.
I have a colleague who is really upset by the fact that military cut-backs may wind up closing his base in Portage. I have colleagues who are upset because perhaps the train will not go through their constituencies any longer and that perhaps VIA Rail will have to close. I have colleagues who are concerned that perhaps we have to sell more corporations. I hope we do. What we have to do is get rid of the debt. We have to get the country to the point at which we pay our bills as they come due with the taxes we take in. We cannot go any longer and forever and ever extend the obligation on to our kids, our grandchildren and our great grandchildren. That seems to be the attitude of my friends opposite.
Borrowing Authority
Every time we try to cut back an expense or do something to conserve, they complain. Every time we increase taxes, they howl. When we present a borrowing authority Bill, which I think is a terrible Bill, they say they do not like it either. Somewhere along the line we have to take our medicine. We can either print more money, tax more money, spend less, or borrow. They do not want us to tax more, and they do not want us to cut our spending even to the extent that we have.
Perhaps we should go and print it. I do not know. If we print it, we will wind up without an economy at all and all our savings and our futures will be gone. Or, we can borrow it, gradually reduce our borrowing needs and bit by bit get our country back in shape. There is no easy answer to it.
We could follow the example of New Zealand. It had the same problem in 1983 when its Labour Government took over. It had a deficit of 8 per cent of its Gross Domestic Product.
In four years New Zealand pushed its Government into surplus. It had unemployment of 1 per cent when it took over. Now it has unemployment rates of 12 per cent and 13 per cent.
When David Lange, the Prime Minister of New Zealand, was here last week and was questioned about it, he said: "We decided that we would pay our bills and that our population would have to pay the penalty. We knew when we did what we did with our cut-backs and our hard action that they would. We are not at all surprised about the level of unemployment. Frankly it will be there for some short period of time".
I do not know what is his idea of short, but the fact is that that is another answer. We have decided not to take that route. We have decided to continue on with a whole host of programs to assist agriculture, to assist regional development, to assist the creation of new industries and businesses in remote parts of the country.
If we take a look at the Estimates, we will find that in almost every case the amount of dollars spent next year is more than the dollars spent last year. The fact is we are spending that money. Perhaps we should not be spending it, but we are spending that money because we do not want to create the kind of situation that Mr. Lange created knowingly, with malice aforethought, the way the Labour Party operated in New Zealand.

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My friend says that the Labour Party did that deliberately, with malice aforethought. Perhaps that is what we ought to do, or perhaps this Labour Party would have us do what the Labour Party has done in Israel. That Labour Party turned on the printing press. It made it so that its currency is not worth anything. In Mexico- there is another Labour Party-you do not quote the price of a house in pesos; you quote it in American dollars. Nobody will take their money.


An Hon. Member:: A Labour Party in Mexico?


Donald Alex Blenkarn: I believe it has socialist in its name. I am sure my friend does not like it, but the fact of the matter is that we are trying to build a solid economy. We do not like borrowing. We wish we did not have this Bill. We think we must unfortunately present this Bill. We want to say that this Bill is a solid, fair answer to the problems that the country faces.


Some Hon. Members:: Hear, hear!


Jean-Robert Gauthier: Madam Speaker, in Bill C-ll before the House today, the Government is asking for the authority to borrow $24.8 billion, as may be required for public works and general purposes.
Madam Speaker, we know that a substantial part of the $321 billion debt which Toiy Members like to blame on a previous Government- We know that this debt has doubled in the past two years. We know there is a lot of rhetoric about this debt. I want to ask the Hon. Member who is, after all, a man to be taken seriously, a Member who is known in this House for his understanding of economics- There is a substantial part of this so-called debt which is caused by the Government's borrowing of public monies. I am referring more specifically to the Canada Pension Plan which represents about $49 billion of this debt. I am also referring to public service pension plans, including the RCMP and the Armed Lorces. This is another borrowing authority regularly used by the Government, and one that it must record in its accounts.
There are aspects of this so-called accounting that need explaining, and I would take the Hon. Member at his word and ask him quite simply, in public, to explain to the House which part of this public debt he so deplores. So many of us do, but I want to know which part he deplores more specifically as chairman of the Finance Committee? What part of this public debt is really money received by the Government in the form of
contributions from so many Canadians who work for the Government, including the Armed Forces and the RCMP, and the contributions we all have to make to the pension plan? What proportion of the debt is the result of accumulating these debts over the years, money that is owed to Canadians?


Donald Alex Blenkarn: The $320 million is the amount of money owing by the Government of Canada to bring into good standing the pension advances made. One of the reasons this borrowing authority Bill is not for the deficit of $30.5 billion and only for $20.5 billion is those particular situations the Hon. Member speaks of.
Those are obligations of Canada and are included in the $320 billion. They represent something in the order of $80 billion of the outstanding amount. About $50 million, unfortunately, is owed either to foreigners, the balance to Canadian pension funds, life insurance, Canadian individuals and savers. That is a very great sum. The whole amount is owing. The whole amount eventually must be available. What we are talking about in this Bill is money borrowing from the street, not from ourselves so to speak.


Nelson Andrew Riis: Madam Speaker, Bill C-ll is a Bill to borrow $24,800 million. If we listen to the exciting speech of the Chairman of the Finance Committee, he talks about the need to reduce the debt and the deficit. Everyone agrees.
I have two specific questions to put to the Member. First, there are not many things that we look to the United States and say: "Listen, that is not a bad idea; maybe we should adopt that in Canada". I know the Government thinks that we should adopt almost anything American, but there are some good items.


John Horton McDermid: Your Leader keeps suggesting that.


Nelson Andrew Riis: Yes, the Leader of the New Democratic Party today said that maybe there was a lesson we should take.
I want to ask a question of the Member. Down in the United States when one makes income from capital gains by speculating on the stock market or in land or whatever, one pays tax on it. As a matter of fact, almost every country in the world taxes capital gains as income, but not this Government. Oh, no. As a matter of fact it says that if one speculates on the stock market or on anything and make $100,000, one does not have to pay a single penny in income tax.
May 1, 1989


An Hon. Member:: That is not true.


Nelson Andrew Riis: Let us just say that one has a $100,000 capital gains tax-free, whether or not one likes it. We are one of the few countries in the world that does not consider capital gains as regular income but privileged income. Of course, that is to be expected from that Government.
Second, why is there a provision in this country whereby 89,000 large profitable corporations do not pay a single penny in income tax? Will the Hon. Member identify one other country that would allow this for tens of thousands of large profitable corporations, including for example the Bank of Montreal for some years, the Royal Bank for some years, General Motors for some years, and Mobile Oil? Why would we not tax these companies when they make hundreds of millions of dollars in profits but do not pay one cent in income tax? Can he identify another countiy that would allow this to take place?
If he wants to reduce the deficit in a fair and just way, perhaps it is about time we started asking the large corporate sector to pay their fair share. Right now they pay nothing, in many years. As well, the Government should start taxing capital gains as regular imcome.


Donald Alex Blenkarn: Madam Speaker, I will answer the second question first and the first question last. He will be pleased with the Budget. Large corporations with over $10 million in assets will now pay a minimum corporate tax.


Nelson Andrew Riis: What rate?


Donald Alex Blenkarn: The rate is not as large as it might be, and maybe the tax has to be altered. We will be dealing with that matter in the Finance Committee.
I want to point out to the Hon. Member that we are now in a situation where every corporation with over $10 million in assets, whether it makes money or loses money, will be paying some form of corporate tax. That is even if it is losing money.
Most people normally say one should not pay tax if one does not make any money. But even if the company loses money it will be paying this minimum corporate tax. For that reason, I am surprised that the New Democratic Party has not stood on their chairs and cheered, instead of walking out.
Borrowing Authority
Let us deal with the capital gains. The Member will know that the United States is the only industrial countiy in the world that taxes capital gains at the full rate. He will also know that the United States will probably alter its rate almost immediately to reduce substantially the capital gains taxation it has.
In Germany, if the gain is over 10 years it does not tax it. The United Kingdon indexes capital gains at the rate of inflation. A year ago the Finance Committee suggested that capital gains tax be indexed to the rate of inflation. The Hon. Member will know that advisers to the NDP agreed to that. He will know that this position has been put forward to the Government. There may well be some changes in our system.
In any event, what we do right now is tax all gains this year at 66 per cent of the gain as taxable income. Next year it will be 75 per cent of the gain as taxable income.


Nelson Andrew Riis: There is $100,000 tax-exempt.


Donald Alex Blenkarn: There is an exemption over the entire lifetime of a person of $100,000, which makes it possible for the ordinary sensible young Canadian to buy a cottage or something of that nature and not have to worry about paying tax on it. It makes it possible for that ordinary Canadian to buy a share in a small business and if it goes up he can get away without paying tax on it. The ordinary person can be exempt from some minor amount of taxable income in his lifetime.
I do not know what ordinary people are, but it seems to me that is ordinary help for ordinary people.


M. Douglas Young: Madam Speaker, I welcome this opportunity to take part in the debate today on a bill to provide borrowing authority, a very important piece of legislation.

I think there is a great deal of justice in the House that perhaps happens accidently. I was interested in listening to the hon. chairman of the Finance Committee. I am not surprised why he sits so far to the right.
The chairman of the Finance Committee said that we should make suggestions, that the Opposition was very negative, that we opposed everything in the Budget and could not find anything that was appropriate. One of the advantages to that is that it puts us in with a majority in this country.

May 1, 1989
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As the Budget unfolds, whether in the House or outside the House, we recognize more and more that big business, small business, labour, people on low income, people in middle income brackets all seem to be unhappy with the steps the Government took.
The suggestion I would venture to make to the Minister of Finance (Mr. Wilson) and the Government with respect to their spending and revenue plans is that they respect the people of Canada enough now that the election is over to tell it like it is. I find it extremely difficult to listen to people suggest that the Opposition should explain to Canadians how to play the fiscal and monetary game. Government Members tell Canadians through their elected representatives that we should be explaining how we would tax, what we would tax, what we would not tax, what programs we would cut and what programs we would expand.
The problem with this spending request by the Government and its Budget is not just the leak and the fact that we are dealing with a lot money, it is that Canadians pay billions of dollars into the coffers of this country on the basis of trust and credibility. Every year around this time people are much lighter in their wallets and bank accounts. Many people fill out their income tax returns on their own, and voluntarily send money to the Government. The problem is that those people who are expected to be honest in dealing with their revenue and expense matters are not at all convinced that the Government is dealing with its finances in the same way.
The reason I have great difficulty listening to some Members opposite when we get into these discussions is that it is very difficult to tell what their position was last fall. For them to ask people on this side to explain how we would go about it is a real conundrum. Last fall members of the Government had access to the books and knew the situation. The Minister of Finance told us last fall that everything was rosy and well managed. We were told that they were the people who could really take care of the finances of this country, that the Government had a proven track record.
What has become of that rosy forecast? How dare those Members suggest to us that we are being irresponsible when in the space of five or six months we have gone from a Government that says it can spend $15 billion or $20 billion on election promises-


Mrs. Sparrow:: That is better than the $26 billion you were talking about.


M. Douglas Young: What was that?


Herbert O. Sparrow: $26 billion.


M. Douglas Young: The fact of the matter is that what we said last fall did not wash. That is why we are sitting over here.


Herbert O. Sparrow: That is right.


M. Douglas Young: You should be forthright enough, courteous enough to excuse yourself to the people of Canada for having misled them last fall. That is what you should do.


The Acting Speaker (Mrs. Champagne):: I am sure the Hon. Member will speak through the Chair. It would be appreciated.


M. Douglas Young: Certainly, Madam Speaker. I hope anyone intervening would do likewise.
The situation we are faced with not only concerns borrowing money or spending money, but misrepresentation. Some want us to believe and want Canadians to believe that the Minister of Finance (Mr. Wilson) and the Prime Minister (Mr. Mulroney) last fall did not know how bad things were. Otherwise, they misled us.
The chairman of the Finance Committee said earlier that we cannot have it both ways. Our problem in dealing with Canadians and making sure that we can maintain some trust and integrity in the system is that the Government must be far more forthright than it has been. The Prime Minister and the Minister of Finance have often talked about the question of fairness when answering questions about the Budget. People in this country are prepared to face the reality of what the deficit and the debt are doing to Canadians. They have great difficulty, however, in believing people who try to misrepresent that some time this year, in 1989, our total debt will have doubled in the period of time, Madam Speaker, Members to your right have sat in government.
Within five years, the total debt will have doubled from $170 billion, yet over and over Members ask Canadians to trust them. The Minister for International Trade two weeks ago in the House said that last fall in Newfoundland-and he was absolutely correct-there would be no changes to the UIC legislation that would be detrimental to workers in this country.
May 1, 1989

In effect we are asking Canadians today to write a cheque. That is what it comes down to. Senior citizens and people at home, people who have to manage nickels and dimes and dollars, tens of dollars and hundreds of dollars, have great difficulty grasping the idea of $28 billion. It is unfortunate that people administering those funds are not as careful as our senior citizens and single-parent families in managing their funds. They are not as careful as students at university who are hardly able to get through because of cut-backs in post-secondary education.
To continue to ask Canadians to share this burden, they must believe that the burden is being shared equally and fairly. They also must believe that the money they are paying into the Government or the money the Government is borrowing is being well spent. I think that is where we are falling down on the job.
It was interesting to hear people speak of universality being preserved in this Budget. Sneaking in the back door and attacking anyone who raises the question of the threat to universality on the basis that we are defending people who make between $50,000 and $70,000 a year is a neat trick. The fact is that once the threshold is set in, it can be and will be changed just as a result of inflation. Those programs are threatened. It is not fair to say that people making between $50,000 and $70,000 a year are being protected. The question is: When will the Government change it?
What will we do with the national sales tax? When the sales tax was introduced, accompanying it was the term "revenue neutral". The Government will implement this new national sales tax on January 1, 1991. The Government undertakes that the tax will be revenue neutral. In the meantime, put the taxes on Canadians: excise; gas; cigarettes; alcohol. Better than that, institute an increase in the manufacturers' sales tax. Billions of dollars are being added in 1989 and 1990 to make sure that when we get into revenue neutral, we have squeezed the well so dry there will be nothing more to take no matter what type of tax is brought in. That is what happens to trust and credibility when people begin to fathom and look through all the rhetoric, thick books, the Estimates and the rest of it. That is what people are beginning to grasp. It is not a question of whether one program should be cut or expanded, whether this tax should be raised of that one reduced, or whether low-income families are being hit harder than middle-income families, or whether high-income families are getting away unscathed. There is a fundamental breach of trust here.
Borrowing Authority
We have heard much talk about Ministers of Finance who should resign or who should not resign or who did resign or who did not resign, depending on the circumstances. In this particular situation, I believe the exercise in terms of the budget leak is one that may be of some interest. It shows up a problem of abuse if insiders were able to take advantage of the leak because they were able to get to their brokers or able to get involved in transactions that helped them out and put them in a position to profit by the leak.
I must give the Minister of Finance the benefit of the doubt. He must have believed what he said last fall about how good things were in Canada. If, after four years of holding the portfolio, he did not know any better last fall than what he was saying, compared to what he is doing to us this spring, that is why he should resign, not because somebody walked out with a Budget or left one somewhere or somebody found one. The problem for the average Canadian is what to do with a leaked Budget that will be passed by this Government? That is the problem for Canadians, not how it happened, who did it or why they did it. It is the attack on the universality of programs. It is the attack on regions of the country.
I was sorry to see the Chairman of the Finance Committee leave. At the very outset, he exhibited an attitude that some people in government have, that we punish people who did not do the right thing on November 21. People in Chatham, New Brunswick, believe that today. People in Summerside, Prince Edward Island, believe that today, that they are being punished. People in Atlantic Canada believe they are being punished because we did return more Members to the left than to the right, more Liberals than Conservatives. We will pay a price because of the attitude of some people who feel that Government and its largess should be directed to those who have supported them.
All of us collectively should find a way to have Canadians believe that there is a commitment to telling them the truth, to telling them what is really happening. Why is it that Canada cannot balance its Budget? Why is it that a tax system appears to be unfair? Why is it that politicians say one thing in September, October and November and then do something else four or five months later? Individuals that I spoke with last weekend were not worried about why the Budget was leaked but, rather, why Parliament did not sit in January, February and March. They wondered if it was specifically arranged to leave as big a gap as possible between the big lie and the harsh reality. That is what it comes down to. Canadians are getting wise. It is not to our advantage to

May 1, 1989
Borrowing Authority
have them become any more cynical than they already are.
When we deal with the Budget and this particular Bill, we must recognize that it is not just an exercise to discuss our own petty grievances. We are in a position to discuss matters that Canadians are talking about more and more. Eveiy Canadian has had to deal with what the Finance Minister has brought before us. We are dealing with a Bill that will provide borrowing authority for the Government to pick up some $24.8 billion. I am sure it is just coincidental but that is roughly the amount the Finance Minister hopes will be the deficit next year. It is beyond the wildest imagination of every Canadian to deal in real terms with this figure of $28 billion. They deal with hundreds of dollars and thousands of dollars. They deal with buying groceries. They deal with the uncertainty of those people who cannot buy a home. What will the sales tax do to them? What is the impact of this Budget on their daughters and sons? What will the impact be in regions of the country where any type of reduction or slowdown in the economy will be disastrous?
I do not believe for a moment that the Minister of Finance (Mr. Wilson) or the Prime Minister (Mr. Mulro-ney) had any intention of telling us that they were wrong last fall in the promises that were made, for example, to elect the Minister of the Environment (Mr. Bouchard). It is amazing that hundreds of millions of dollars could be committed and in part spent last summer as though the bank vaults were open and there was no problem at all, because we have to get my friend into the House of Commons and into the Cabinet.
However, when we are talking about UIC benefits and the privatization of the Unemployment Insurance Program then there is no money from the Government at all. There is not a reduction, there is no money at all-unless, to be fair, there is a major catastrophe or a tremendous sense of urgency. If we continue with high interest rates, with deficit financing, and this type of borrowing, and the slowdown that many people are predicting in the economy, that urgent and emergency
situation will undoubtedly come about. It is not something that anyone looks forward to.
In closing, I hope the Government will recognize, as we all do, that there is not much choice in the matter. Canadians have not become totally acquiescent. They understand that it has gone a long way. The chairman of the Finance Committee suggested that someone might start a tax revolt. Politicians do not start tax revolts. They cause them.


John V. Nunziata: I wish to congratulate my colleague on an excellent speech. I would like to indicate to him and to the House my serious concerns with respect to the Budget and the money the Government wants to borrow in order to meet its commitments. I am also concerned with what the Budget will do and what it has done to the social safety net that has taken years and years to develop. That social safety net makes Canada unique. For example, I am speaking of the Old Age Security Program, the Unemployment Insurance Program, the Family Allowance Program, the day care system, and the transfer payments that go from the federal government to the provincial governments. I am shocked that the Government should break its solemn commitment to the people of Canada with respect to the social safety net. I am also very concerned in terms of the impact it will have on Canadians and Canada generally in the years to come.
If we could turn the clock ahead a few years, perhaps to the years 2000, I shudder to think what the country will be like in the year 2000 and the years beyond with respect to those least able to help themselves. For example, what will happen when there is no longer an effective Old Age Security Program, or an effective Family Allowance Program, both of which are no longer universal? What will happen when the Government pulls out its funding with respect to day care, education, and health care? Those programs make Canada unique and make it the envy of the world.
I would like to ask my colleague about his concerns and his predictions in terms of that social safety net, and what may or may not be left of that safety net in the years to come, and the impact that it will have bn future senior citizens, future single-parent families, and on future unemployed in Canada.
May 1, 1989


M. Douglas Young: The point I am trying to make, which many of us will have to look at seriously, is the whole notion of trust and credibility. Canadians are prepared to share the burden, if they think it is being done fairly. Unemployment insurance, family allowance, and old age pensions are a sacred trust. We must not allow the trust of Canadians to deteriorate to a point where they become cynical. I have listened to people talk about New Zealand, the United States, and about other countries and how they do it. This country is very special in how it deals across the board with men and women in every part of the country. There are basic standards, basic programs, universal programs, and programs that allow people to deal with their future with some degree of security.
In answer to my friend's question, I would say that the biggest danger we face is that Canadians may lose confidence in the country and its ability to provide programs for the young, the elderly, and people with less opportunity. That is the beginning of what we are seeing now. There are thresholds of $50,000 to $70,000. The manner in which universality is being attacked is disguised. UIC is privatized. Regional development programs are cut back, which makes it tougher for regions in some parts of the country.
With the experience of deindexation of family allowance, selling off Crown corporations, and the types of things we see in the Budget, all Canadians will become more concerned about that net of support that has been out there for so long.


Mr. Karygiannis:: I want to congratulate my colleague for bringing up some important points to the House. I am sure he will recall that back in 1984 the debt was $170 billion, and now it has almost doubled. The Government is asking us to pay for it.
The Hon. Member across the aisle is laughing. This is not a laughing matter, Sir.


John Horton McDermid: Who else is going to pay for it? Don't be so silly.


Jim Karygiannis: You are going to turn around and tax us at 9 per cent. Your mismanagement, Sir-


The Acting Speaker (Mrs. Champagne):: The Hon. Member should go through the Chair in his comments, please.
Borrowing Authority


Mr. Tobin:: I rise on a point of order, Madam Speaker. I support what you are saying. The Member is a new Member, but he is a very wise and intelligent one. I am sure you would want to make clear that all Hon. Members, including Ministers on that side of the House, ought to go through the Chair with their comments.


The Acting Speaker (Mrs. Champagne):: I am sure the Hon. Member has understood what the procedure is, and I am sure he will be careful.


Jim Karygiannis: The Government's mismanagement, and my hon. colleague across the aisle happens to be part of the Government-


John Horton McDermid: And proud of it.


Jim Karygiannis: The Government is proposing a 9 per cent tax on small business. Would my hon. colleague advise the House how this will affect the small business community in his riding? How will they be able to bear this 9 per cent, and how will they be able to manage it?


M. Douglas Young: The proposed federal sales tax will be a boondoggle for small business. We understand the unsuccessful efforts by the Government to try to arrange a program with the provinces where the points of collection and the bureaucracy involved would be far simpler. The fact that the federal Government has decided to move unilaterally will make a morass of the whole collection system. It is to be put in on top of the provincial programs, with the exception of Alberta, where there is no provincial sales tax. How is the Government going to collect it? How much red tape will there be? How much more time will be spent by small, medium, and big business is something no one looks forward to.
I am sure there will be a great outcry from the private sector to make sure that in whichever manner the Government proceeds it does it a little more efficiently than some of the other things it has been doing in the last few weeks.


John Horton McDermid: I have a couple of questions for my hon. friend. First, he made a comment on the 9 per cent sales tax. It is the intention of the Government to introduce draft legislation early this summer in order that those businesses and those individual Canadians will have an opportunity to comment before legislation is brought into the House. There will then be a period of one year to adjust before the tax is put in place. He says that businesses will object to it. It is just the opposite. I did one-third of the pre-budget meetings. Businesses, without exception, encouraged us to change the 12 per cent, now 13 per cent, federal sales tax and to get into a broader based sales tax.

May 1, 1989
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Mr. Manley:: Did they encourage you to raise it?


John Horton McDermid: I would just leave that comment with the Hon. Member. He will have plenty of opportunity as will the public to participate in that program as he has had over the last two years in discussing tax reform which his Party supported.


Robert Daniel Nault: I thought you were going to ask a question.


John Horton McDermid: Yes, I did, but this is comments and questions so the new Member can understand how it works.
The Hon. Member was talking about the safety nets and the programs that we have and we want to protect. Yet, at the same time, he is saying that everything should remain as the status quo, that we should not tackle this deficit problem. I understand he has a great deal of experience in the provincial Government and as he is now elected to the federal House perhaps he could give us the position of the Liberals on how they would, in fact, tackle the deficit problem?


Mrs. Campbell (South West Nova):: We are not the Government. You are the Government.


John Horton McDermid: Here is a former Minister saying "We are not the Government. It is not our problem''. What I am saying is that it is everybody's problem, every Canadian should be concerned about the debt. She sits there and says, "We are not the Government. We are not going to tell you how to do it." What an irresponsible statement from a Privy Councillor. I cannot believe it.


Some Hon. Members:: Oh, oh!


The Acting Speaker (Mrs. Champagne):: The Hon. Member for Gloucester.


M. Douglas Young: Madam Speaker, I am very pleased to get an opportunity to respond.
The one thing I would say to you and to my hon. friend through the Chair-


An Hon. Member:: Honourable friend?


M. Douglas Young: I think all Members go through enough in here that they deserve to be called honourable no matter how they behave.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


M. Douglas Young: The thing that I want to make clear to my friend is that the tackling of the deficit and the huge debt in Canada is serious.
The Minister of Finance did not recognize the problem last fall in October and November because he did not say much about it and was still planning on spending a lot of money. However, the one thing the Liberal Party will never do is eliminate the debt on the backs of the elderly, the kids in universities, and the UIC recipients. Nor will we cut back on medicare and EPF funds to the provinces. That is one thing we will never do.


Some Hon. Members:: Never!



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mrs. Champagne):: It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the Hon. Member for Kingston and the Islands (Mr. Milliken)-Canada Elections Act-Chief Electoral Officer's Report/Composition of Commission of Inquiry; the Hon. Member for Thunder Bay-Nipigon (Mr. Comuzzi)-Air Safety-Pearson International Airport-Effect of recent government mea-sures/Testing of measures prior to implementation; the Hon. Member for Dartmouth (Mr. Macdonald)-Unemployment Insurance-Unemployment in black community-Effect of changes to system/Expenditure of funds-Request for affirmative action stipulation.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson (Etobicoke Centre) that Bill C-ll, an Act to provide borrowing authority, be read the second time and referred to a legislative committee.
May 1, 1989
Mr. Murray W. Dorin (Edmonton Northwest):: Madam Speaker, I appreciate having the opportunity to speak on this important Bill today.
Bill C-ll, as has been noted by other Hon. Members, provides the Government with the authority to borrow $25.5 billion to meet its requirements for the next fiscal year. That is an absolutely frightening number. Most Canadians and probably people in the Chamber can hardly comprehend that in any significant way because it is a number which is beyond anything that most of us would deal with on a day to day basis.
However, we have to consider when we are looking at the borrowing requirements of the Government in what kind of situation the finances of the country are and the budget squeeze that has brought this requirement about, to realize just why we require these funds.
What are the alternatives? Very few or none have been provided by the opposition Parties, even though they have criticized this measure. People must understand what we are doing to work ourselves out of this problem, so that within the next three to four years we can come here following a federal Budget and not be required to present a Bill like this one and continue borrowing.
On this side of the House we are not prepared to dismiss the fiscal position of the Government and to ignore the problem as if it did not exist. If we take a look at government expenditures, and I would like to consider two or three of the larger expenditure areas of government, we can clearly see why it is that we are driven to this additional borrowing as well as putting in place the tax measures that we have.
Senior citizens' pensions represent the largest single expenditure of the Government, in the neighbourhood of $15 billion a year.
Those pensions are indexed so that every year the amount we spend on them will increase by the amount of inflation, running currently at about 4 per cent, so we have an approximate 4 per cent increase simply as a result of that.
Second, the population is growing older. There are more and more people turning 65 and entitled to those pensions.
The result of inflation and people turning 65 will require the Government to find an additional $1.5 billion
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this year, just to maintain the existing program, not to improve it, enhance it or increase it.
Let us take a look at a similar situation, the transfer payments to provincial Governments. This is money the provinces use for such things as health care and education. Those amounts are indexed or driven by a formula that provides the provincial Governments an amount each year increased by more than the rate of inflation.
A third element is the interest that the federal Government will pay on the debt. I will speak more on this later. That interest will increase this year by an estimated $6.5 billion. Just to stay where we are and maintain the fiscal position of Government, we need to find an additional $9 billion because of the changes to those items. This means no change in government policy, no growth, nor any increases. This is just to stay where we are to continue with seniors pensions, support for health care and education that most Canadians believe are fundamental requirements of any Government.
Where do we find that $9 billion and any additional amounts that might be required for any other demands placed upon the Government? We have three alternatives. We can cut or reduce other programs, we can increase taxes, and we can borrow additional money to finance the expenditures of government.
The current Budget has all three. I am not going to stand here and pretend to suggest that these are popular measures. I am not even going to suggest that I am particularly happy about any of them. I am somewhat embarrassed to say that we will borrow $25 billion to continue the operation of government. I find it incredible that the opposition Parties would not recognize this situation and offer anything more constructive than we have heard from them today.
We on the government side are prepared to take the necessary steps, even though some may be unpopular. I heave heard there is a sign over the door in the Department of Finance. On the way in it says "Watch Your Step". On the way out it says, "Watch Your Language". Some of us may need to put a similar sign above our doors, because I expect that we are going to face a fair degree of criticism over the next few months as we explain to Canadians why these measures are necessary.

May 1, 1989
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Some people say that we should put more emphasis on expenditure reduction. I have just mentioned three areas of government expenditure that represent over three-quarters of the Government's spending. Only 16 per cent of government spending is directed toward the operation of government salaries for civil servants and paper for them to shuffle. When most people talk about cutting back on expenditures, they are not talking about pensions nor transfers to provinces. What they are generally talking about is that area of operations of government where they believe there are large sums of government waste.
While I do not believe for one moment that we should discontinue our vigilance, which has been duly noted by the Auditor General in his reports in the previous years whereby he has suggested that the Government recently has made a lot of progress in this area, I think we have to realize that when 16 per cent of government spending represents all of those operations, we are not going to be able to find the kinds of sums we need just by reducing expenditures.
There is also a criticism that has been made that taxes represent too large a share of the requirements we have found, and expenditure reduction is not enough. I would like to say two things in that regard. First of all, taxes show up immediately in the government's finances. Taxes show up immediately the day they are implemented, such as the gasoline tax, which can begin to be collected right away. Spending reductions take longer. Even though we may make certain adjustments with regard to military expenditures, Crown corporations and other operations of government, the fact of the matter is that the announcement today does not translate into the reduction tomorrow. As all Members understand, it takes a considerable period of time to wind down these various operations before any cost savings are achieved. So these measures we have taken on the expenditure side do not have their immediate impact tomorrow, but we will see them over the months and years ahead.
I would also like to make mention of one other area, and that is the question of some of the claw-backs in government expenditures. Again, these measures do not show up directly as a reduction to government expenditures, even though the net effect is the same. The reason for that is that when we use this claw-back procedure, what essentially happens is that the people receive the
payment, whether it is the family allowance payment or the pension cheque from the Government, on one side, and then we turn around and tax back some of those benefits for people with incomes of over $50,000 a year. What that results in is an increase in both numbers. We show up an expenditure on one side and a reduction on the other, whereas if we were to take the net difference only and report that on the expenditure side, the picture would look somewhat different. I think Members should be aware of that when hearing suggestions that perhaps we have not done enough on the expenditure side. In reality, there have been a lot of expenditure reductions that will only come into fruition over the next months and years. As well, some of these measures will show up on the tax side rather than on the expenditure side.
I would like to make mention of one of the comments made earlier by the opposition Parties. They have suggested that we should be doing more in terms of taxing large corporations. We have increased taxes for large corporations in this Budget to the degree that I have not heard any of them suggesting that they think they are particularly happy about this Budget. I would like to deal with one particular number that we keep hearing in this Chamber-we heard it this afternoon, and that is the suggestion that there are 89,000 large corporations in Canada that pay no income tax. That is absolutely false. First of all, there are not 89,000 large corporations in Canada to begin with. There are, in fact, 2,208 large corporations in Canada if we use the definition set out in the Corporation and Labour Union Returns Act.


An Hon. Member:: An exaggeration.


Murray Dorin: We have an example of an exaggeration once again from the socialist Party, where rather than recognizing that there are 2200 large corporations in Canada, they suggest there are 89,000. This serves to assist them in perpetuating the myth that somehow there are vast numbers of people with great amounts of money that we could find, and somehow ignore the fact that all Canadians really must share in what we are trying to do.
I would like to address another matter briefly. The reason I would like to do that is that I see the Hon. Member for Nanaimo-Cowichan (Mr. Stupich) is in this Chamber. He and I, I must say, have something that we share in common, although it was amazing to me last week to discover this, and that is that we are both chartered accountants. I did not believe there were any chartered accountants in that party.
May 1, 1989


An Hon. Member:: What a shock.


Murray Dorin: I was shocked, I must admit.
One of the other myths that we often hear propagated by the socialist Party, the NDP, is the suggestion that somehow there are deferred taxes around that corporations have not paid and that we should collect those, and if we did we would have no deficit. The fact of the matter is that unfortunately my profession is responsible for using some language in the preparation of financial statements and financial accounts that is not entirely correct, in my view. I have protested this and made that suggestion, because in fact what are commonly called deferred taxes have absolutely nothing to do with taxes payable to the Government. They have nothing to do with current taxes owing on that corporation's financial statement that they should be paying. What they are is a suggestion or a provision by companies that somehow there may be some tax payable in the future. Therefore they feel that they should record something just in case that time might come, whereas in reality there is no actual tax liability outstanding.
I know that the Member from Nanaimo-Cowichan understands that, and I am hopeful that he will correct those other Members in his Party who continue to put forward this suggestion that there is someone out there who owes this amount to the Government. In fact it is not true. Even if we were to take that as true and snap all that revenue immediately from those corporations, it is still an amount that is less than $30 billion, which would not eliminate the deficit and certainly would not have anything to do with the debt in this country, which is over $320 billion. Even if we accepted what is totally incorrect and is untrue but is a myth that is being suggested by that party, there would in reality be very little impact on the situation we find ourselves in today.
I would like to make a couple of comments with regard to the progress we have made so far and what we can hope to see over the next two to three years. The fact of the matter, as was pointed out earlier by the chairman of the Finance Committee, the Flon. Member for Mississauga South (Mr. Blenkarn), is the borrowing requirements for this year have been reduced down to approximately $20 billion per year this year. That is considerably less than the deficit, and there are reasons for that.
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By 1990-91, by two years from now, following along with the various measures that have been provided in the Budget presented by the Minister of Finance (Mr. Wilson) last week, we will have managed to contain the growth of the national debt to less than the growth in the Gross National Product. That is a very important step and a very important point to reach. If a Canadian has a debt of $10,000 and a salary of $20,000 on which to service and pay that debt, he will find himself in a very difficult situation. That is the situation of the Government of Canada today. But if they are able to get to a position whereby their income is increasing at a more rapid rate than the debt they owe, they will find themselves with room to pay the debt, to reduce it, and eventually work themselves out of the situation. Within two years under the measures that have been provided by the Minister of Finance in this Budget, we will be in that position.
By 1993-94 we will be in the position, all other things being equal, that the Government of Canada will no longer have to borrow money to finance its expenditures. On the basis of accounting similar to the United Kingdom and the United States, if we measured it the same as they do, we would have no deficit at that point in time.
I think I can say that while I am unhappy that we have to do this today, that we have to present this Bill and ask again for the Government to be provided with an additional $25.5 billion, this will hopefully be one of the last three or four times we will have to do this before we can come back and report that in fact the Government will be receiving more money than it is bringing in and we are reducing the national debt.
There is one final point that is worth making. It is that the Government is now receiving more in revenue than it is spending on programs. If we did not have the legacy left to us by the former Government, a situation which has forced us over the last three to four years to borrow these large amounts of money, then we would no longer have to present the kind of Bill that we have here before us.
We are paying our own way as a Government now. We are addressing the question of the debt that was accumulated over the last 20 years, most of those years being the responsibility of another political Party. What I recommend to the Members of this House is that, reluctantly, we should support this Bill. We should support the request of the Minister of Finance. If we stick with him, in three or four years we should no longer need to borrow these large sums of money. That will be a day which we will all welcome. I certainly look forward to it.

May 1, 1989
Borrowing Authority


Mr. Keyes:: Madam Speaker, I have some difficulty with a problem that has arisen not only with a constituent in the great riding of Hamilton West but one which has probably been raised in other ridings. A constituent of mine came to me and said: "Why is it that I have spent many, many years paying my taxes and contributing to UI and, when I find myself unemployed suddenly and want to collect UI, something I have paid into for so many years, the Government's view is that I will have to be taxed back. However, I make $51,000 per year. I have paid my taxes in the beginning and now I will be taxed back on the UI benefits I wish to receive". Quite simply put the constituent wonders why he is being penalized for being a good financial manager, something which this Government is obviously not.


Murray Dorin: Madam Speaker, first, the constituent in question is not being penalized at all. If I understand the Hon. Member's question correctly, he is suggesting that someone who earns $51,000 per year is not eligible for unemployment insurance benefits, or that they would have them taxed back. That is simply not the case. There is nothing in the Budget that I am aware of that provides for anything like that. There is no taxing back of unemployment insurance benefits. However, I might have an opinion as to whether or not there should be. I might suggest that it should be looked at but the Budget does not do that.
I say to the Hon. Member that unemployment insurance is meant to be exactly that. Therefore what we have done is we have said that the premiums will be paid by employees and employers. The employees will receive the benefits should they become unemployed. Insurance is insurance. When one buys auto insurance or fire insurance for one's house a premium is paid. If one has an accident or one's house bums down then one collects the benefit. That is exactly the case with unemployment insurance. There is no taxing back provided for in the Budget.


Mr. Barrett:: Madam Speaker, I was interested in the comments made by the Hon. Member for Edmonton Northeast-


Murray Dorin: Northwest.


David Barrett: The Hon. Member's directions are about as confused as his economics.


John Horton McDermid: You are the one who is confused.


David Barrett: Is the Hon. Member aware that the Government does not charge any interest on deferred corporate income tax? I would like to know where one can borrow $30 billion and not be charged one penny of interest because one calls it a liability. Is the individual taxpayer allowed to do that? To assist the Hon. Member, the answer is: "No". If we are to take his figure of $30 billion owed by corporations in deferred corporate income tax and apply a simple 10 per cent interest charge-and money cannot be gotten for that amount today-there is $3 billion short just on interest payments alone. Canadian taxpayers are subsidizing those corporations for that amount.
If the Government wants to save money and if it is concerned about the welfare of the taxpayer, why is it giving welfare of $3 billion on $30 billion worth of deferred taxes to these corporations? Is that socialism? It certainly is. It is a perverse form of socialism for the rich and to heck with the poor. Just stand up in this Chamber and suggest-


John Horton McDermid: Let him answer.


David Barrett: I have a couple of other questions.
To try to lead the House to believe that the corporate sector of Canada deserves not only deferred taxes but a $3 billion hand-out because it does not pay a penny of interest is to suggest that the Canadian Government should label its whole debt as a liability and not pay any interest on it either. Is that not the system being used for the corporations? If it is good enough for the corporations, it should be good enough for those financial geniuses who almost doubled the debt in the four years they have been in power.
My next question for the financial geniuses over there who hand out money to the corporations is this. What is the Hon. Member's position on the Western Diversification Fund? I am from the West. The West has been shafted again. Yet there has not been a word uttered by that Member about the Western Diversification Fund. As long as it does not hurt big business then it is okay. However, the Western Diversification Fund is absolutely essential for people of the West to have at least a sense of fair play. What is his position on the Western Diversification Fund? Did he advocate that it be chopped? Let us hear him now. He can do it in front of the cameras. Then I can go into Edmonton Northwest or Edmonton Southwest and tell the people there how the Tories are fighting for the corporations here.
May 1, 1989

During the debate on cut-backs to unemployment insurance the Leader of the New Democratic Party and the Leader of the Official Opposition made the charge that this was the first move to harmonization to accommodate free trade. That was denied by the Government and by the Minister. The Minister said: "Oh, no, it is not the same. In the United States the federal Government does not participate". She defined the distinction and after her definition we learned that our federal Government was pulling out of the scheme. I have a question to ask the Hon. Member on this pull-out. Is this not harmonization, something that the Leader of the Liberal Party said was happening? Is this not the harmonization that the Leader of the New Democratic Party said was happening?
My questions are simple. I ask them so that I can explain to my constituents why welfare is being given to corporations without any interest being charged. I ask about the Western Diversification Fund. I ask him to tell us when the U.S. flag will be put up on UIC offices so that we will know harmonization is finally complete.


Murray Dorin: Madam Speaker, it is not particularly difficult to understand why the current Member from Esquimalt-Saanich-


David Barrett: Esquimalt-Juan de Fuca. Read the map.


John Horton McDermid: You got lost, too.


Murray Dorin: He was the former Premier of the Province of British Columbia. He left that province in the mess it is today. In four years he destroyed the province's economy.
I wish first to deal with the question that he raises on deferred taxes. He asks why there is no interest on deferred taxes. It is because there is no money owing to anyone. He asks about individuals. Let me tell him that any individual has the right to do the same thing if they would like to.


David Barrett: They have to pay interest.


Murray Dorin: Any individual has the right to do the same thing if they would like to.


David Barrett: If they pay interest.
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Murray Dorin: There is no question of interest because there is no tax owing. I would like to have a chance to answer.


Mr. de Jong:: You cannot depreciate your car and your house. Individual taxpayers cannot depreciate. That is why they do not have deferred taxes.


John Horton McDermid: That is because there is no capital gains on houses. If you want to put capital gains on houses then stand up to say so.


Murray Dorin: Madam Speaker, I would appreciate if Hon. Members opposite could sit quiet and allow me to answer the questions. I do not really want to engage in a battle of wits with unarmed opponents.
The Hon. Member asks why cannot individuals do the same thing. The answer is that they cannot. If one owns a Canada Savings Bond, or any bond, then one is required to pay tax, not necessarily every year but, for example, every third year. If one wishes, there is nothing preventing one from making a note for this year's income tax, even though one does not pay it or owe it because it does not have to be paid for three more years. One can make a note that one owes that tax out of this year's income and therefore be prepared and ready for it after the three years go by. There is no law saying that you have to pay it in advance or pay it now, but you know that three years from now there will be an amount owing. If you want to record that in your books at home, in your family accounts, in your cheque book, on the back of an envelope, however you record such things, you are perfectly free to do that. The fact of the matter is that you have free right to do that if you would like to make those provisions. However, nobody normally scrutinizes an individual's personal bookeeping. It is not normally a matter of public record.
The western diversification program will continue. In fact, it is continuing with increased funding. It is one of the programs that provide payments to businesses to allow them to expand, grow, and diversify the economy. I am not sure why the Hon. Member would suggest that on the one hand we are not supporting the corporate sector and on the other hand we are supporting it too much. I find it a very incongruous position.
Now the third question-I have to be very brief because I know my time is over-is with regard to UIC. The fact of the matter is there are only eight states that have unemployment insurance programs. They are all different. It would be foolish to suggest that somehow ours would harmonize with any one of them.

May 1. 1989
Borrowing Authority


The Acting Speaker (Mrs. Champagne):: The period for questions and comments is now terminated. Debate?


Mrs. Diane Marleau (Sudbury):: Madam Speaker, I am speaking today on Bill C-ll, which is a Bill to authorize this Government to increase our line of credit. This is the third part of our 1989-1990 fiscal trilogy. One should say tragedy. It started with the tabling of the Budget before the media-government by television at its worst-followed by the tabling of the Estimates, and now this third part. This is a very tragic time for Canada. This trilogy is being brought to us by the need to battle the deficit. The Conservative Government says it is battling the deficit. They certainly have not been too effective in that regard in the last four years.


Some Hon. Members:: Hear, hear!


Diane Marleau: Now the deficit-we are not talking about the national debt here; we are talking about the actual amount the Government overspends every year. It would be nice if some day we could tackle the debt, get rid of the deficit. I will read to you an excerpt of an editorial from our local newspaper in Sudbury on Saturday: "The Finance Minister has some explaining to do to Canadians on the Government's economic policies. He might well start with the discussion of the rise of the public debt under the Tory regime, years during which he has occupied his present office. When the present Government took over from the Liberals in 1984, this debt stood at $170 billion. It is now at over $320 billion, and after this year's exercise it will be well over $350 billion".


John Horton McDermid: Does it say what the deficit was when you took over?


Diane Marleau: They have doubled the debt, Sir, and that is very serious. It is not a joking matter. Before and during the past election campaign, the Conservatives did not talk about the debt or the deficit. No. They went around and they spread money everywhere, all across the country. They made all kinds of great promises and got re-elected. But now they are breaking most of their promises. You know what they are saying? Economics dictate that you can break promises. Where was this big deficit and this big debt? It is like a newfound religion. It was there then. Why did you not come clean and tell the Canadian people what you were going to do?


Some Hon. Members:: Hear, hear!


Diane Marleau: Now the Government has brought in measures to increase revenues. Doesn't that sound nice. What they have done is put forward a Budget that will create the biggest tax grab in Canadian history. They say they have brought in a wide range of spending cuts, but where? At the heart of our social programs. Despite that, we will still have a deficit of $30.5 billion at the end of this year.
I guess the biggest complaint I have is with the method they are using. They have not cut off the trough of pork-barreling funds. They are attacking the essential programs that are of benefit to the average Canadian. These cuts will hurt the average Canadian; they will hurt the average taxpayer far more than the corporate friends of the Conservatives. On the one hand the Government has reduced its cost by getting out of unemployment insurance. It is claiming a saving of $2.5 billion, which is at the expense of the people, I might say. Well, this does hurt. Not only are they cutting funding, but it is also harder to collect unemployment insurance now. They have made it harder for the average person to claim those UIC benefits. But what happens when the average person cannot collect UIC benefits? You know what happens? They end up on welfare. Who pays the bill for welfare?
The municipalities and the provincial governments. Who pays the bill for the provinces and the municipalities? The average taxpayer, the guy who saved all his life to buy that house, to clean it up and to make it look good. Maybe he does not have a whole lot of money in the bank because he spent that money on his home. He is the fellow who is footing the bill.


Some Hon. Members:: Hear, hear!


John Horton McDermid: It is the same guy who was footing the bill up here, too.

The week after the election, Madam Speaker, the Right Hon. Prime Minister (Mr. Mulroney) said: "It is now my duty to realize the aspirations of those who said yes. No Canadian anywhere in Canada will be left behind."
That is what our Right Hon. Prime Minister said right after the election. It seems that they had not yet quite discovered the debt and the deficit problem. I must tell you that children are left behind. The Government has decided not to keep its promise to increase the number of day care spaces.
May 1, 1989


An Hon. Member:: Where would we get the money?


Diane Marleau: Employees and employers are left behind. Ottawa is withdrawing from the unemployment insurance program and employers and employees will have to pay an additional $2.9 billion a year.
The provinces and those who live there are left behind. Transfers to the provinces are cut and the taxpayers will have to pay. What is even more serious is that Canadian families are left behind. They will have to pay higher taxes. They will have to pay more for gasoline and the new sales tax will add a huge burden, especially the additional costs families will have to pay to buy a house or for rent.

The changes in the UIC system are going to hurt the small businessman, the small entrepreneur, the average Canadian. It hurts everyone. But remember this: the Conservative Government is prepared to spend $1 billion, which they committed to the Hon. Member for Lac-Saint-Jean's riding to guarantee his seat, or should I say buy his seat in Parliament. That commitment is still going forward. They did not call that a promise because they had the money for it. On the other hand, they did say they would not touch unemployment insurance, but they certainly touched it. They leave in a commitment to benefit a few, and they cut out the ones that hurt every worker and every employer in this country. They said all along that the money is there. They said it during the campaign: this is not going to cost a penny. The money is only there when they want it to be.
I remind Hon. Members opposite that the Prime Minister made these promises personally. When Canadians had some difficulty believing him, he brought in the Hon. Minister of Finance who assured Canadians that the moneys were already set aside for these commitments. I guess this was a case of "don't worry, be happy". It turned out to be a case of vote now and pay later. They have insulted the intelligence of the Canadian electorate. The Canadian electorate will not forget it.
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One of the Government's commitments prior to the election campaign was the funding of the Lloydminster heavy oil upgrader and the Oslo tar sands plant in Alberta. When these announcements were made it was the general feeling in the business and energy sector that these projects were not viable at the current world price. Yet the Conservatives are going to honour this commitment and pump $1 billion into these projects. We do not see any mention of cutting back on these projects in order to reduce the deficit. It is hard to understand how the Government can cut back on essential social programs, which hurt the average person but will help its rich corporate friends.
I remind the House of some of the clauses in the Free Trade Agreement that the Government pushed forward. We are committed to selling our gas and oil to the United States at the same price as we sell it to ourselves.


Herbert O. Sparrow: That is right.


Diane Marleau: We will pour a billion dollars into subsidizing the development of oil projects for the benefit of our American friends. Personally, I think it is carrying friendship too far, especially when we cannot look after our own. Charity begins at home.
The Conservatives take away our child care and stop funding our unemployment insurance but guarantee better oil supplies for which our U.S. friends have a guaranteed push. That is ridiculous. I do not know where the Government sets its priorities, but it certainly is not with the interests of average Canadians.

We must say that the disadvantaged regions are even more disadvantaged. This Budget will have serious consequences for all provincial and municipal governments, disadvantaged regions and individuals. Cutting VIA Rail cuts services to those who need them most. And I can tell you that there are communities in our region that have no road, no air service, and depend only on rail transport. What will happen to these small communities?
Closing a military base like Summerside in Prince Edward Island kills a town, a region. That is serious! Cutting the budget for regional development condemns these regions to poverty. What do we want here in Canada? A country where only the rich in Montreal, Toronto and Vancouver have a chance for a decent standard of living?

May 1, 1989
Borrowing Authority


An Hon. Member:: You have the Schefferville syndrome.


Diane Marleau: Canadians have the right to live in all regions of Canada and enjoy a decent standard of living. With this Budget, the Conservative Government takes this right away from them.

We are being moulded by the Government to fit the demands of the Free Trade Agreement. We know that the only subsidy that has been defined in the Free Trade Agreement is the one dealing with energy. We know that for the remaining definition of subsidies the Government will not have to worry about unemployment insurance being included in that definition because it is out.
Regional development is crucial for my region. Again, funding is being tailored to fit the Free Trade Agreement. Right now, most of the projects that are being funded in my region deal with tourism projects. While I am happy that some of these programs are being funded, we need more than tourism. The forest industry is a good example of an industry that is in dire need of more help to survive. Will it get any help? No.
The Conservatives are giving up our subsidies even before we reach the negotiating table. They have also attacked the average Canadian by increasing the federal sales tax. It has increased the excise taxes on alcohol, tobacco, and especially on gasoline.
Let me explain what happens to those who live in the more remote areas of this country, and not just northern Ontario. For every penny a litre rise in the price of gasoline, it costs people that much more for every service and good that is purchased in northern Ontario. The cost is higher because it must be transported.
There is a double whammy. The sales tax is brought down and the tax is added to higher costs so that the poor must pay more. Is that fair?
It is no wonder the Minister of Finance lost control of his Budget. He must have been so confused about who he was helping and who he was hurting in this whole process that he forgot to watch out for the leaks. While the leak of the document is a serious problem, it is not as serious as the production of such a document. He should consider resigning over such a Budget. He is attacking and hurting all Canadians.
It is unconscionable to try to pass laws that hurt all Canadians while maintaining major subsidies for big business and indirectly for the American consumption of our natural resources. The Minister of Finance would have better served Canadians if the whole Budget had been lost and scrapped, and a new Budget struck, perhaps after listening to some of the feedback he will get. He may still want to get that feedback because I think there is still time.
Obviously he has not been in touch with the people but has been talking to his friends on Bay Street. If he knew what the people needed we would not have this kind of Budget.
Another indirect way the Government is taxing Canadians is by this so-called dividend it will get from Canada Post. While the idea that Canada Post will pay the Government a dividend sounds lofty, it only means that it will increase the price of stamps to pay the Government another tax. It is another form of taxation. Again, the average Canadian will pay for it.
We have dealt somewhat with the transfer of payments to the provinces. The people of my area will remember that last year there were cut-backs in the transfer payment. The province had to hold back on some of its payments to the municipalities. It is very difficult for the municipalities to derive these funds, as the people in northern Ontario know.
We also know that the province does not have a lot of choice. It either cuts back on medicare or cuts back on funds to the municipalities. Again, the average person foots the bill. It is another tax.
Is the Government really tackling the debt, or is it just harmonizing our economy to fit into the trade deal? When one considers our deficit and how it continues to increase, I suggest the Government is not going to deal with the deficit in this year. They are certainly not cutting their own expenditures. There is still plenty of money to fund some of the Prime Minister's pet projects. There is still money available to advertise how great the Government is and what a great job it is doing. I will give you one example of its skills. On tax reform, taxation was to be simplified. This was to be a new era in taxation. When you look at the Estimates and read down to taxation, the Government has increased person-years by 226. This is due to our new simplified tax. What a joke.
May 1, 1989

We must say that this is a bad Budget. Canadians are being asked to tighten their belts to reduce the deficit, but it is still going up to $30.5 billion this year.

The end does not justify the means. The end is not happening. We are not reducing the deficit; we are increasing it. The means are aimed at the wrong people.


John Horton McDermid: There were a number of issues raised in the Hon. Member's speech that I could debate at great length, but I will just mention a few of them. Let us start with the Post Office.
The Post Office this year will show a very slight profit. Four years ago the taxpayers of this country were paying a $400 million grant to the Post Office. Eighty per cent of their business comes from business, so it was an indirect grant to business. Now the Post Office is at a break-even position. That is saving the taxpayers' money.
The Hon. Member opposite makes it sound like the little guy pays the taxes at the municipal and provincial levels and somewhere in Canada there is a great big money tree where all this money comes from. The Hon. Member talked about energy and megaprojects and says that at today's current prices these are not economical. In the same breath, her energy critic is saying that we are not planning for energy self-sufficiency down the road. These megaprojects do not come on at the turn of a switch. They take years to bring onstream. The Hon. Member for Newfoundland knows that full well. I want him to stand up today and tell us that we should stop, cut off, and forget about the oil development fields, Hibernia and Newfoundland. No! He knows that we must go through this process so that down the road, when energy sources are running out, we have a plan. Is the Hon. Member opposed to that? I want to ask her that.
My next question would be on the lumber agreement. The Ontario Government had a windfall of some $50 million off the 15 per cent lumber tax in the last year and a half. Has the Hon. Member opposite made representation to Premier Peterson to take that windfall money and reinvest it in the lumber industry in northern Ontario?


Diane Marleau: Do you know what I am for? I am for telling the truth. Where was the Hon. Minister during the campaign? He did not tell the people of Canada what would happen. When we were debating the free trade bill, where was the Minister? Was he telling the people
Borrowing Authority
of Canada that we were selling out our energy supplies in the long run to the Americans?


Some Hon. Members:: Hear, hear!


Diane Marleau: He did not.


Brian Vincent Tobin: I know all Members of the House, regardless of their political stripe, would join me in congratulating the Member for Sudbury (Mrs. Marleau) for an excellent presentation to the House today.


Some Hon. Members:: Hear, hear!


Brian Vincent Tobin: The great passion that was evident in her remarks, the great skill with which she made her points, the way in which she stood up not for the vested interests of the corporate towers of Canada but for the interests of ordinary Canadians is to be commended. We do not see enough of it.


Some Hon. Members:: Hear, hear!


Brian Vincent Tobin: I want to say in posing my question to my colleague from Sudbury that I thought she went directly into the heart of the matter when she pointed out to our friend, the chartered accountant across the way, who said: "I have examined the deficit and the debt and these brutal measures that go beyond cutting into the skin, through the meat, down into the bone, and sucking the marrow out of the collective life of Canada. I have examined this Budget, and I want to tell you that these cuts are in order because the debt is indeed severe". The Member from Sudbury got to the heart of the matter when the Member opposite said the issue is not what the size of the debt is. We know the Tories have doubled the debt. The issue is why did you not tell the truth during the election campaign?
The Minister for International Trade (Mr. Crosbie) is like some new creature that crawled out of the primordial ooze and discovered something called the "deficit". For the first time during the election we had a Minister of Finance, a Prime Minister, and a Minister for International Trade who said: "Every nickel has been accounted for. The deficit is under control. These $17 billion in promises are not a problem at all".
Last November the Conservative Party said: "If you vote for us, we will give you $4 billion for day care. If you vote for us, we won't cut unemployment insurance. If you vote for us, social programs will be sacrosanct and protected. If you vote for us, we will not cut regional development". And when they get elected, they cut every damned one of them. I ask my colleague from Sudbury, is that violation of the public trust not far worse than a violation of Budget secrecy? Should this crowd not resign?

May 1, 1989
Regional Development


John Horton McDermid: What have you been eating, Sprung cucumbers?


Brian Vincent Tobin: No, only Tories eat those, and they now look like they were weaned on a pickle.


Diane Marleau: I couldn't have said it any better than my hon. colleague.


Some Hon. Members:: Hear, hear!


Diane Marleau: To be honest, this is not a laughing matter. I do not want to hear any joking about this. I do not know how many of you would have been touched by these cuts, but I can tell you that all of the working women, single mothers, working families who have problems with day care and money, the Government has done nothing for them. The Government has not guaranteed their future, because it has not cut the deficit. It has not even started tackling the debt. Some day the Government must consider the fact that it has to be more responsible in what it says to Canadians. Canadians do not believe what the Government is saying. They have said they would not mind so much the cut-backs if the deficit were being cut.


Herbert O. Sparrow: Madam Speaker, I wish to remind the Hon. Member for Sudbury (Mrs. Marleau) that this deficit did not just occur overnight; it has been growing for over 20 years. People that live in glass houses should not throw stones.
Let us go back to October 1968, when Edgar Benson was the Minister of Finance. The deficit was $400 million. The deficit jumped and jumped and jumped. When this Government took over in 1984, the deficit was $38.3 billion. We have brought that deficit down every year. We have cut our expenses every year. This is the first time since 1946 that any Party has ever done this.


Some Hon. Members:: Hear, hear!


Herbert O. Sparrow: The Liberal Government had the opportunity from 1968 through to 1984 to reduce the deficit and the debt. That Government did not. Its spending grew in the last few years by 24 per cent. No wonder Canadian people have mortgaged their lives away. There is no way Canadians can continue this way. The Budget brought down last Thursday morning by the Hon. Minister of Finance (Mr. Wilson) is the best one going. Canadians stand behind him, and we will not leave this on the backs of our children.


Some Hon. Members:: Hear, hear!


The Acting Speaker (Mrs. Champagne):: It being five p.m., the House will proceed to the consideration of Private Members' Business as listed on the Order Paper.


PRIVATE MEMBERS' BUSINESS-MOTIONS   REGIONAL DEVELOPMENT REQUEST FOR INCREASED SPENDING
Mr. Steven W. Langdon (Essex-Windsor) moved:: That, in the opinion of this House, the Government should consider the advisability of increasing spending for regional development, focusing this spending on regions with a demonstrated need for assistance and ensuring that such spending is dependent on investment planning and job creation that may not otherwise take place.
He said: Madam Speaker, it is unfortunate to have to move a motion of this type at a time like this, but it is also very appropriate that a motion such as this should be in front of the House of Commons in the course of the same week as the debate on the Budget. This Budget takes a meat-axe to regional development programs across the country. It backs away from commitments which were clearly put before the Canadian people during the free trade debate. It presents an approach to what should be the most important part of economic development priorities which, instead of being generous, balanced, and fair, is very mean-spirited and cruel to the people of many parts of the country, and which, most important of all, is completely negative so far as the future economic development of our country is concerned.
I wish to commence by talking very briefly about some of the things that have struck me as a Member of Parliament who has been fortunate enough to have had the chance in the last House of Commons to see a great many parts of Canada, in the course of a variety of the special committees that looked at the trade issue, but also in the context of the jobs action group which the New Democratic Party took across the country to try to see to it that regional development patterns and inequalities were given the type of consideration that they deserved.
May 1, 1989

One of the things that stands out most in my mind is meeting families in Cape Breton Island where the children of pensioners could not rely on themselves and the work that they could get for their economic livelihood, but had to rely on the pensions received by their parents who were over 65 in order to be able to survive. One found household after household in which there were three generations living under one roof and were not relying on what could be earned through employment because the jobs just were not there or were being cut or eliminated, but instead were relying on pensions given to their parents and their grandparents in order to survive economically.
I can remember having the opportunity to visit the interior of British Columbia, part of the country in which people had put tremendous work into building up a future for themselves based around the production of grapes and the production of wine. In the course of the trade deal negotiated by the Government they had simply been wiped out. Nothing was put in the place of this activity to give people a chance to survive and to thrive.
I can also remember parts of northern Ontario which were hit very hard by the ineptitude of the Government in trying to negotiate some settlement with respect to the softwood lumber attacks from the United States, which ultimately led to a 15 per cent export tax that made it impossible for many towns and communities in northern Ontario to be able to survive.
These are the parts of the country that we in the House must consider when we think about regional development. These are the parts of our country that the Government has not looked at with humanity, seriousness, and concern for an economic future that should exist in a country as well endowed with resources and with human skills. Yet these parts of our country exist. The regional underdevelopment of many parts of Canada continues. The inequalities persist. Those inequalities create official unemployment rates-unofficial unemployment rates are much higher-of more than 16 per cent. For instance, I was told by people in Newfoundland that unofficial unemployment rates were upwards of 40 per cent to 50 per cent of the population unemployed.
Regional Development
What has happened in the face of this? In the last House of Commons, a House of Commons committee of which I was a part brought forward quite a good report on regional industrial expansion. It was a report which specifically looked at the industrial and regional development program of the Department of Regional Industrial Expansion. It concluded with a number of important recommendations. One recommendation which was completely unanimous among all members of that committee was that the federal Government should continue to maintain a strong role in Canada's regional development efforts, while recognizing the contributions that provincial and municipal Governments can and should make in this effort.

Another recommendation, Mr. Speaker, is that economically disadvantaged regions should receive assistance to diversify and strengthen their local economy. This economic development assistance should be given to them according to local economic needs.

Another recommendation was that communities and local development groups should be encouraged by the Government of Canada to accept greater responsibility in the planning and implementation of measures designed to promote the development of their local economy.
Finally, the regional development elegibility criteria for prospective business investments should be broadened to include all forms of business activities in all sectors of the Canadian economy.
What happened, Mr. Speaker, when this Government was re-elected, despite the strong set of recommendations that had come forward from a committee very much dominated by Conservative Members in the past House of Commons? What happened was a Budget which came into this House of Commons and which despite the efforts of the Minister of Finance (Mr. Wilson) to suggest otherwise has in practice decimated regional development programs in Canada.
If we take, for instance, the regional development funding from 1988-89 through to the perioid 1993-94 it is clear first that the peak of that development spending will in fact come this year, and it will come because there have been earlier Economic and Regional Development

May 1, 1989
Regional Development
Agreements that have been signed with the various provinces across this country. The peak, and I quote here from page 68 of the Budget papers-it says it was tabled in the House of Commons on April 27, and we all know that is not quite true-indicates:
On a year-to-year basis, following a projected peaking of expenditures at close to $1.4 billion in 1989-90, annual funding provisions will be stabilized -
Stabilized is a nice word, is it not, Mr. Speaker? Unfortunately it is an inaccurate word in this case, because we read:
-annual funding provisions will be stabilized at somewhat over $1 billion a year.
In fact, in any kind of real language, as opposed to the newspeak that this Government puts into place in its attempts to sell the Budget, that is a reduction. That is a major reduction, a reduction of close to 30 per cent from 1989-90 to the following year and the years that will follow from that at which the expenditure pattern will be a billion dollars.
The Minister has come back and suggested to us that in fact if you compare the five years previous with the five years in the future there is a great increase. But if you look at the comparison and the sections of the Budget provisions which the Minister is using for purposes of his comparisons, he has taken out of the calculation the major program, the Industrial and Regional Development Program, IRDP, which this committee talked about in the past and which has represented the major mechanism by which funds for regional development purposes went to the provinces in the past. If you take that out and not even consider it you are going to look good over the next five years compared to the past five years. But the program itself is dead. The Government permitted it to die despite the tremendous benefits IRDP gave to communities across this country and despite the tremendous work this Conservative-dominated committee went through to try to improve IRDP for the future. Despite all of that, the Government let this important regional development program die.
The consequence, if you start to look at the Estimates for this coming year, is that contributions under IRDP, which will continue because some of the policies of the actual agreements made were multi-year agreements, will decline from $106 million in 1988-89 to just $68 million in 1989-90. At the same time, contributions made by the Regional Industrial Expansion Ministry to the various subagreements that are part of the economic and
regional development agreements with the provinces will also decline by $10 million between last year and this year.
That is why a motion such as the one I moved is so absolutely crucial. It has to be put to this Government that all of us who come from the non-metropolitan parts of this country, from parts that are far away from the Torontos, the Montreals, the Vancouvers, the Winni-pegs-


Mr. Halliday:: From Windsor.


Steven W. Langdon: Windsor is not a metropolitan part any more than Stratford is, as the Hon. Member knows. These parts of Canada demand a fair deal from this Government. They do not demand a special deal or special privileges. They quite rightly demand that they get fairness, equity, and a chance for their children and their communities to be able to have economic opportunities just as people do in downtown Toronto, those in the richer parts of Montreal, and in the more affluent parts of Vancouver.
We have to make a commitment. We have to get a message across to the Government through a motion such as this one, which says that the Government should consider the advisability of increasing spending for regional development. It should see to it that this increased spending is focused where it is needed, that it is planned so that what takes place is done in the most efficient, effective way possible, which does not waste money, which helps people and is done in a way that builds for the future.
We will not then be looking for simple, short term make-work kinds of band-aid solutions which have characterized our regional development efforts put in place both by Liberals and Conservatives in the past.
What must be put in place are serious regional development efforts, a commitment to regional development efforts. I hope that everybody who comes from parts of Canada that experience this inequality or unfairness which now exists will rise and participate in this debate to see to it that fairness is established as a principle for the future of our country.
[ Translation j


Guy St-Julien: Madam Speaker, I welcome this opportunity to speak to the House about the federal Government's innovative approach to regional development in Quebec.
May 1, 1989

The Throne Speech made in the fall of 1986 was quoted earlier in this debate, so I will not repeat what was said. However, I would like to stress that the present Government is determined to increase the effectiveness of regional development programs by directing the majority of its scarce resources to those regions that need them most, by adjusting its programs to local needs and circumstances and by increasing participation of the regions concerned in the decisionmaking process.
To that end, we are establishing, within Industry, Science and Technology Canada, a new organization that will be specifically concerned with Quebec's regional development needs.
If new federal programs are to be effective and fair, they must allow for the duality in Quebec's economy. The province, seen as a component of Canada's economy, has two distinct economic regions with two very different levels of development. First, we have industrial Quebec, centred in the Greater Montreal area and covering the entire southwestern part of the province. This economic region is satisfactorily integrated in the economy of North America, but its industrial productivity tends to lag behind that of southwestern Ontario and the northeastern United States, while a high proportion of jobs are in traditional industries.
Then there are Quebec's peripheral regions that depend on natural resources. These regions range from the east to the northwest, and the economic situation is similar to that in the Atlantic Provinces. The economy of these regions, with the exception of eastern Quebec, has received no special assistance under previous regional programs. I would like to add that in these peripheral regions, there are five major resource areas: Eastern Quebec, the North Shore, the Centre-North, Western Quebec and Northern Quebec.
Madam Speaker, comparisons with other regions in Canada make a clear case for the need for special regional development measures, both in the resource regions and the central regions.
A five-year economic development agreement for Quebec's regions was signed on June 9, 1988. It provides for funding worth $820 million, of which $440 million is to be provided by the federal authorities and $380 million by the province, money to be spent on the development of resource regions and the province's central regions.
Regional Development
Furthermore, $40 million has been earmarked for a private sector program in the forestry industry in Eastern Quebec, and $75 million has been allocated by both levels of government to refinance current ERDA subsidiary agreements.
The new development agreement for Quebec's regions has six objectives: to involve local entrepreneurs; to promote the exploration and processing of natural resources; to promote technological development; to strengthen the competitive position of local businesses; and to encourage economic diversification.
And finally, to promote integration with the Canadian and North American markets so that the regions can fully benefit from the Canada-U.S. Free Trade Agreement.
Regional consultations have made it possible to consider the local point of view in planning, so that the final version of the Agreement reflects the needs and priorities expressed by business people throughout the province. A consultation committee in each resource region, made up of the best-known business and community representatives, will ensure continuing local participation in decision-making.
The principles stated above, namely decentralization, consultation and emphasis on the most disadvantaged regions, are at the heart of the Agreement. The specific needs of each region will be defined, as well as the programs required to complement the national programs.
Furthermore, Madam Speaker, the special needs of the central regions of Quebec have been considered. A federal program to improve manufacturing productivity has been implemented. A joint innovation program is now being discussed with the province and the new agreement provides for an industrial adjustment program.
Also, a special program for Montreal and the disadvantaged areas of the central regions of Quebec is planned, in addition to the federal program to support restructuring in east-end Montreal, which is already established.
Madam Speaker, with these programs, Quebec can finally benefit from the type of regional development assistance that only an effective federal approach can provide.

May 1, 1989
Regional Development
I wish to restate that the present federal Government is determined to promote regional development in Quebec. They proved it by spending a lot of money to that end. From 1979-80 to 1983-84, federal expenditures on regional development in Quebec averaged $189 million a year. From 1984-85, when a new Conservative Government took power, to 1988-89, those expenditures increased to an average of $246 million a year. For the five-year period ending this year, they came to $1,231 billion, compared to only $944 million over the previous five years.
Those figures speak for themselves and, with the new approach I mentioned, Quebeckers will benefit from the measures taken by this Government for generations to come.


Mr. Francis G. LeBIanc (Cape Breton Highlands- Canso):: Madam Speaker, I would like to speak in support of the motion by the Hon. Member for Essex-Windsor (Mr. Fangdon). However, considering the Member's well-known and well articulated views on economic matters, I find the wording of the Member's motion rather limp.
I would like to requote from the motion where he states in particular:
That, in the opinion of this House, the Government should
consider the advisability of increasing spending for regional
development -
I would suggest that the House would be prepared to consider a much stronger motion than this one, particularly in light of the views which all Members of this House constantly express on the advisability of regional development and enhanced continuation of our commitment for regional development which goes back throughout our history.
I would like to suggest to the Hon. Member that perhaps his motion might be better expressed as follows: Not only should the Government consider the advisability of increasing spending for regional development, but it should make a firm commitment to regional development, and that increased funding for regional development should be the expression of that increased commitment.
I would just like to say that the Government's recent activity gives lie to the rhetoric we constantly hear from that side of the House about how important it considers regional development and how to could be trusted to maintain the expenditures on regional development that we have experienced in the past. We have seen in the last Budget and we have seen again in statements how false that commitment is.
I would like to highlight a few instances of this, particularly as they occur in Atlantic Canada and Nova Scotia. We have heard a great deal about the fact that the Economic Regional Development Agreements have not been renewed and have been allowed to lapse. However, it is worse than that. In some cases, and I speak in particular of one in my riding involving the Strait of Canso Development Agreement, not only have they not been renewed, but the federal spending does not even come close to what has been projected. I have read in the Estimates that the cumulative expenditure to March 31, 1988, which was to have been the expiry date of the agreement, was $7,511,000 when in fact the maximum federal share under the agreement was $19,600,000. Why has that money not been spent? I can think of all types of projects in my constituency that would have benefited from such an increase in federal spending, projects in infrastructure and in industrial development, projects in an area where unemployment is much higher than the national average.
Not only must the Government renew its commitment to regional development, it must re-establish its commitment to it. It must demonstrate to the House through tangible means, through some expression that we can see in terms of a commitment of funds to regional development, particularly in Atlantic Canada, that it is serious about this. What we have seen in the Budget, in the Estimates, and what we continue to see is that the Government preaches regional development and expresses the advisability of increasing spending on it and then does the reverse. I expect a motion with more teeth in it from a Member of the Hon. Member's calibre. I do not know if it is appropriate to amend the motion at this time. However, I would like to recognize that the motion should not only stress the advisability of increased spending for regional development but it should request on behalf of the House a tangible commitment to regional development in terms of increased funding earmarked for that purpose.
I would like to mention another area, which is not an ERDA but which has a different acronym. It is FRDA. FRDA is not a new kind of Canadian tree but an acronym for Forestry Development Renewal Agreement. I would like to direct the attention of the House to the fact that in the Estimates the FRDA in Nova Scotia has been allowed to collapse, as far as I can tell. There does not seem to be any commitment toward this agreement in the future in terms of spending. The forecast expenditure to March 31, 1989 for the Canada-Nova Scotia Forestry Renewal Agreement is $49,569,000. Yet the Estimates project only $794,000 for
May 1, 1989

the agreement in the future. This is appalling in view of the fact that our forestry resource is so vital to the future of Canada. It is a part of the resource base that we have in Canada, particularly in my riding of Cape Breton Highlands-Canso.
I wish to stress the importance of the debate and to encourage our Members who will participate in it to stress that we should not simply be considering the advisability of increasing regional development, we should be demonstrating our commitment to it through higher funding levels earmarked for that purpose.


Mr. Walter Van  De Walle@St. Albert: Madam Speaker, the study of the political history of regional development in Canada will reveal that successive federal Governments have for the most part failed miserably in their attempts to equalize economic opportunity and development across Canada. Such a study would show that since Confederation Canadians representing various and diverse regions of the country have regularly come to Ottawa to present their specific problems and to enlist Ottawa's assistance to resolve them.
Ottawa's response, while usually sympathetic, was never adequate, and the resultant regional disparity among Canadians has been perpetuated and in most cases aggravated. This is because Ottawa was never able to develop a comprehensive regional development philosophy. The result was a scattered shotgun approach to helping regional problems. There was also a tendency in Ottawa to believe that all policies should be implemented nationally. That is to say, what is good for one region of the country must be good for the other part of the country. That approach ignored regional needs because a deaf ear was turned to regional input. Economic sensitivity on Ottawa's part was virtually non-existent. While successive federal governments received the regions and heard their problems, these same federal governments would not really listen.
I am proud to say that I belong to a federal government that has changed this outdated Ottawa approach. Five years ago, in Prince Albert, Saskatchewan, the Prime Minister (Mr. Mulroney) made 52 specific commitments to western Canadians. All of these commitments, plus many more, have been fulfilled. These promises recognized the unique problems and needs of western Canadians.
Regional Development
The western diversification initiative is an integral part of these commitments to western Canada. It is structured to provide westerners with direct access to and participation in those federal decisions and the decisionmaking process that impact directly on their economy and social well-being.
The Prime Minister has said that from now on decisions affecting western Canada will be made not thousands of miles away but down the street, where they should be made. This is the heart of the Government's approach to regional economic development. It has three essential ingredients. They are policy influenced by regions, programs designed by region, and program delivery by region.
The regional realities of Canada have demanded that the Government create specialized institutions designed to fit specialized regional needs. This means that these institutions must be driven by the region rather than by Ottawa. In order to effect that purpose they need the resources to match.
In keeping with that philosophy the Government has established a special Northern Ontario Development Fund. It has established the Atlantic Canada Opportunities Agency, which delivers federal assistance to Atlantic Canada. On August 4, 1987 the Prime Minister announced the creation of the western diversification initiative and the establishment of the Department of Western Economic Diversification to be headquartered in Edmonton with regional offices in Vancouver, Saskatoon, Winnipeg, and a liaison office in Ottawa. The volume of requests for information and the number of submissions made to the various diversification offices far exceed any expectations the Government had for a program of this nature.
My colleague, the Hon. Minister of National Defence (Mr. McKnight) did a remarkable job in launching the Western Diversification Program. He has said that decision making about the West is decision making by the West. That philosophy was in effect reflected in the legislation brought down. The Bill itself reflects this Government's innovative approach to regional development.

May 1, 1989
Regional Development
It states that the Minister is to lead and co-ordinate the efforts of the Government of Canada, to establish co-operative relationships with the provinces, with business, with labour and with private and public organizations for the development and diversification of the economy of western Canada.
The legislation also talks about regional input into policy formation, tapping the views, experience and wisdom of western Canadians and calling upon westerners at every level to come forth with new ideas to help develop a policy.
The Minister is responsible for ensuring that the most significant contribution of the Western Diversification Program on the western economy will come from westerners themselves participating in the formation of federal economic development policies. That section of the Act ensures western Canadians have input and that westerners get to the cabinet table. The climate also eliminates antagonism and fosters co-operation that has to take place between the various provinces and interested parties.
We are creating a country where equality of economic opportunity exists for all regions of the land, and the Western Diversification Program is a reflection of this. Decentralization of decision making and knowing that the decision makers are in the West is key to the success of this initiative. Consultation with provincial Ministers and other westerners from all walks of life, who each contributed so much to the program in the first place, will continue to be ongoing on a sustained basis.
One of the difficulties with Regional Development Programs in the past has been what I call bureaucratic overload. The flow of paper has caused the plugging up of various programs. It was difficult for those Canadians affected by various programs to access these programs. Western diversification has built into its structure a policy of cutting through the red tape rather than creating it.
For example, in order to become involved in a western diversification project, one does not have to complete an elaborate application form; simply write a letter with a basic idea and one is automatically plugged into the system. If the project involves a new product, a new technology, new markets, productivity improvements or import replacements for western Canada, it has a good chance of being funded.
These five areas feed on one another. For example, a new product for the West often means new technology, new markets. It is about giving that extra push to new ideas which are in abundance in the West and which will reduce the West's dependence on the traditional sector.
As a westerner, I know the possibilities of the economic enhancement of western Canada. They are actually endless. There are tremendous opportunities there for business people if they are given the chance and the opportunity to develop their products.
As a truly national Government with strong representation from the West, we have changed the traditional approach to Regional Development Programs. The Western Diversification Program is administered in the West, with the best interests of western Canadians always being the priority.
This new approach of regional development has been undertaken by a Government that understands the West and is committed to addressing western concerns. In Alberta, across western Canada and throughout this nation, western diversification is working. The Atlantic regional agency is working in the Atlantic provinces. We have throughout Canada an opportunity to develop our potential.


Mr. Ron MacDonald (Dartmouth):: Madam Speaker, I rise today in debate to speak on this very important and thoughtful motion put by the Hon. Member from Essex-Windsor (Mr. Langdon). It is indeed timely that this motion comes up today, just a few days after the most disastrous Budget Atlantic Canada has ever had inflicted upon it.
Over the past four years, but more particularly over the past five months, we have seen the Tory Party and this Government set about to unravel the unique fabric built on trust, caring and compassion of Canada and respective Canadian Governments; a vision of a nation rich in resources that used its great wealth in a thoughtful and prudent manner to tiy to overcome the obstacles of geography; a nation where we believed that it was important to use these resources to equalize opportunity for those that live great distances from the centre of this country in Atlantic Canada, northern Ontario, eastern Ontario and western Canada; a nation that believed that one had the right to expect to be able to earn a living in the region of one's choice, not simply raise one's family to have them go down the road to Toronto.
May 1, 1989

Successive Canadian Governments have realized the important roles of economic transfers to ensure a vibrant national unity in this countiy. That is why wise Governments of the past introduced universal programs in health, education, and old age security. That is why past Governments of this country have introduced equalization programs, to take from those that have just a little so that those that have not have a better chance to realize their full potential in this nation. We have used the vehicles of established programs funding to help provinces like Nova Scotia, Newfoundland and New Brunswick to be able to deliver better educational programs at a high national standard.
In the 1970s, it was a Liberal Government that introduced a new program called the General Development Agreements whereby the federal Government, in co-operation with the provincial Governments, embarked on essential programs to make our industry sectors in Atlantic Canada and other regions of this country more competitive on the national and international market. Literally billions of dollars were earmarked for these "have not" areas to try to raise them from their perpetual economic slump, to give the people who live there a chance to participate fully economically in our nation.
In 1984, the Liberal Government again fine tuned its program and came in with Economic Regional Development Agreements which built on the foundation laid by the GDAs. The future held great promise in those days for Atlantic Canadians. However, from 1984 until today we have seen a dark cloud of despair gather over Atlantic Canada. We have seen this Government, by its lack of a vision of this country and its determination to serve its masters on Bay Street and more recently on Wall Street, dash the hopes of Atlantic Canadians.
During the election campaign successive federal Ministers came to Atlantic Canada to talk about the Government's commitments to Atlantic Canadians. We saw the Minister for International Trade (Mr. Crosbie) stand up in Atlantic Canada and say unemployment insurance programs would not be changed, that regional development programs would remain intact and that social programs in this country were not at risk with the election of another Tory Government.
Regional Development
What a difference a few months make. Last week we witnessed the abandonment of regional development as an essential tool in the Government's economic policy. We saw the Government come in and cut established programs funding to Atlantic Canada, cuts that will result in more hospital beds closing down and heightened crisis for our post-secondary educational institutions in Canada. We saw a Government that misled the people of Atlantic Canada with its so-called commitment to Regional Development Programs.
In Nova Scotia alone there are six agreements that have expired, worth millions of dollars and thousands of jobs in Atlantic Canada. We have seen the Minister responsible for the Atlantic Canada Opportunities Agency play smoke and mirrors with his Atlantic counterparts in the lead-up to the Budget. Just on Friday, the day after that disastrous Budget, he came out and said that the veiy future of these agreements are still up in the air, that if and when they are signed the matter of how much is paid by the provincial Governments and how much is paid by the federal Government is still up for negotiation.
On the one hand, the Government has cut badly into provincial revenues by the reductions in the EPF. On the other hand, it has cut regional development funding through the ERDA process. It tells those same provinces that they may have to come up with a bigger share if these agreements are indeed renegotiated.
What the Government has done is act like the bully on the block. To show how tough it is, it knocks them down. It picks the weakest one on the block and knocks him down. Once you knock him down, you put the boots to him.
It is interesting that at the same time the Government cuts development funding it is perpetually patting itself on the back for being around during the post recession recovery. It ignores the real disparity that its own policies have caused in the last four years.
It is interesting to note that if one looks at the unemployment rate as a measure of regional disparity, in Newfoundland, in 1983, the average unemployment rate was 55 per cent above the national average. That was shameful. In 1988 that same rate is 110 per cent higher than the national average. In Prince Edward Island, in 1983, the unemployment rate was 3 per cent higher than the national average. In 1988, after four years of Tory Government policies, that rate stands at 37 per cent above the national average unemployment rate. This,

May 1, 1989
Regional Development
before the Government put the boots to Summerside in closing down its base and throwing thousands out of work in that part of Prince Edward Island.
In effect, the Government's true agenda is to change the way Canadians think about themselves. It is turning its back on those people it has been elected to represent, the people in the regions of this country, the people in northern Ontario, eastern Ontario, the people in Atlantic Canada. They are the people who want to become full economic partners in this great country.
In closing, I support my hon. colleague's motion to increase funding in Atlantic Canada, but before funding is increased we must recover what the Government has already taken. We must stop the erosion of caring and compassion that the Government has exhibited over the past four years. We in Atlantic Canada have a right to be allowed the opportunity to become full partners in this great nation. Regional development funding, continued at historic levels, is the only vehicle for us to retain that equity.


Mr. Brian L. Gardiner (Prince George-Bulkley Valley):: Madam Speaker, in the few minutes remaining tonight I want to make some general comments on the very important motion we are dealing with tonight.
The House will also know that we are debating another important piece of legislation before the House in terms of its impact on regional development. It is Bill C-3, the legislation to create the Ministry of Industry, Science and Technology. At that time I said that it would have been nice to be debating legislation to create the forestry Department, which we have not yet seen from the Government despite its many pledges.
The motion today, moved by the Member from our Party, the Hon. Member for Essex-Windsor (Mr. Lang-don), reads:
That, in the opinion of this House, the Government should consider the advisability of increasing spending for regional development, focusing this spending on regions with a demonstrated need for assistance and ensuring that such spending is dependent on investment planning and job creation that may not otherwise take place.
That is an important motion today, in light of the chaotic and ridiculous performance we saw by the Government last week in the presentation of its Budget and the implications in that Budget and the Estimates.
The Estimates that were tabled on Friday gave us an idea of some of the Government's specific spending plans. Some of the concerns that we have raised about what will happen with our regional development plans and some of the specific Departments within Government, such as forestry, are coming true with the tabling of the Estimates and the Budget.
The concerns that I have raised in the House are that what will be created are two different kinds of Ministers. There is a perfect example of that now in western Canada. We have been calling for the renewal of the forestry agreements. Some six FERDAs in other provinces across the country have expired. No official negotiation had taken place and we wondered why. The information we received from the Minister of State for Forests (Mr. Oberle) was that a new economic policy framework was being designed.
What is that new economic policy framework? I believe it will be a reference of all federal agencies in western Canada and Atlantic Canada, through those agencies, to the point where there will be two different kinds of Ministers. In western Canada there is the Minister responsible for western diversification. In the case of my critic responsibility there is the Minister of State for Forests. He is still a junior Minister because we know, in light of the Budget and the spending Estimates, that the Minister of Forests must go to the Minister responsible for western diversification to get funds for those forestry agreements.
The perfect evidence is contained in news releases, which all Members receive. In my Province of British Columbia, in the forest industry in any case, we will all get to know the Minister of Western Economic Diversification because he will basically become the Minister of Forests. I know that our sector of the industry is not desirable of that.
Those are some of the concerns that have been raised on this side of the House. I believe the motion of the Member for Essex-Windsor points that out clearly. Certainly there will be more debate as consideration of both Bill C-3 and the Budget continues.


The Acting Speaker (Mrs. Champagne):: The time provided for consideration of Private Member's Business is now expired. Pursuant to Standing Order 96(1) the order is dropped from the Order Paper.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Peter Andrew Stewart Milliken: Madam Speaker, in rising to participate in this debate I would remind Hon. Members that the question under consideration tonight was raised by me in the House of Commons on April 18, when I asked the Deputy Prime Minister (Mr. Mazankowski) a question concerning the report of the Chief Electoral Officer which had been tabled the previous day. In my question, I asked when the Government would act to implement the recommendations made by the Chief Electoral Officer. The answer that the Deputy Prime Minister gave in part was:
The opposition Parties failed to concurwith the Government on that particular issue and they bear the responsibility.
I was speaking about the Government's failure to deal with Bill C-79 which had been introduced during the course of the last Parliament and was not dealt with.
The Government's failure to deal with this Bill is entirely the fault of the Government. The Government controls the order of business in this House. It is the Government that dominates the proceedings, aside from the Private Members' Hour we have just completed. The Government has the right to call its business as it sees fit. I want to recall the proceedings that took place in respect of Bill C-79. That Bill was introduced in June 1987. It sat on the Order Paper and absolutely nothing happened until March 16, 1988 when it was called for second reading. During the second reading debate, Bill C-79 was debated for a total of two hours and 17 minutes and was not passed. Nothing further was done with that Bill throughout that session.
Adjournment Debate
Last summer the Government, having done almost nothing during its previous three years in office, decided to pass some legislation so that it had some sort of record to present to the people of Canada in anticipation of the election later in that year. For that reason, Parliament sat through most of the summer and well into the fall, in fact until the election was called in late September in order to permit the Government to do something so that it could say to the people that some legislation had been passed. One of the items it did not deal with at that time was Bill C-79.
I was not a Member of the House then, so I am speaking in part with the benefit of information provided by my colleagues who were in the House and were privy to discussions that proceeded between all Parties in relation to the passing of this Bill C-79. I acknowledge and respect the fact, and I think it is important that this continue, that amendments to the Elections Act are normally dealt with by all-Party agreement. That is an important principle. It is one I respect and the Government ought to continue to respect it.
The Government was able to arrange agreement on many points of that Bill. On others, it could not arrange agreement. Any sensible approach to this problem would require that once you reach agreement on certain points, you proceed with those and pass them into law. Items not agreed to are left out, particularly with respect to election reform when the question of passing the amendments enfranchised Canadians who had not previously been enfranchised or had no right to vote.
There was an editorial in Le Soleil on April 19. I want to quote a brief paragraph from it.

Under the Elections Act, 50,000 mentally handicapped people, 25,000 prisoners, 500 judges appointed by Ottawa, 295 returning officers and 2 million Canadians living abroad are denied the right to vote. They could and did contest the 1977 legislation before the courts.

That was the issue that the Chief Electoral Officer purported to deal with in his report. Many of the items that would have permitted these persons to vote had been agreed between the Parties during the course of the session. They were ignored by the Deputy Prime Minister. Instead of making this Bill a priority, he set it aside and said it could be dealt with at another time. It was constantly shoved aside by other matters that the Government considered more urgent.

May 1, 1989
Adjournment Debate
Let us look at some of the matters the Government considered so urgent. One of them was child care legislation. I recall that the House spent some time considering the child care Bill introduced during the last Parliament. I observed it in the reports of the proceedings of this House. The other day the Prime Minister (Mr. Mulroney) shed crocodile tears, saying that the reason that Bill was not passed was because the Senate obstructed it. The Senate had the Bill before it for less than a week before Parliament was dissolved, and yet we were told this was Senate obstruction. Now we are told that, instead of introducing the Bill again and dealing with the issue, we will have to wait for several years because the Government says we cannot afford it. If we cannot afford it now, how could we afford it then? What was going on? Why spend all the time on child care instead of dealing with electoral reform when an election was in the wind and it was something that was crucial and important to deal with, and which could have been passed in a short time, at least in part, with the agreement of all Parties.
The other Bill that was discussed at the time was free trade. The Government made a great show of spending considerable time discussing that Bill in the House. As I recall, it took some rather drastic measures to ensure its passage, knowing from July on that the Bill was going to face a problem in the Senate. Well, it did not get into the Senate long enough to face much of a problem, but it was there for a short time before Parliament was dissolved. The Government knew that that difficulty was going to be faced. It was not as if the Senate had not said in advance that it was going to delay the Bill until an election had been held. In spite of that, the Government insisted on spending weeks of debating time in the Chamber, going through that Bill, knowing what was going to happen to it later instead of dealing with electoral law when an election was coming on.
Four years had elapsed when the Government could have dealt with this Bill, and nothing was done. It sat on the Order Paper for more than a year with nothing happening. I submit that it is clearly the responsibility of the Government to move legislation forward, and it should have done so in this case.


Mr. Murray Cardiff (Parliamentary Secretary to Deputy Prime Minister and President of the Privy Council and Minister of Agriculture):: Madam Speaker, the Hon. Member has raised a number of issues. He talked about many subjects, however, I am going to keep my comments to the reform of Canada's election laws, because I understood that was the subject to be raised tonight, not all the other issues that the Hon. Member mentioned.
The Government has long recognized the need for reform of Canada's election laws. In fact, one of the most comprehensive packages of reform ever proposed was contained in the White Paper on election law which was tabled by the Government on June 26, 1986.
Over the course of 15 years prior to the tabling of the White Paper, a number of problems had been identified by all participants in the election process, and had formed the subject of several reports of the Chief Electoral Officer.
The great majority of these problems were addressed first in the White Paper and subsequently in Bill C-79 which was introduced by the Government in June, 1987.
As the Chief Electoral Officer indicated in his 1989 report, the amendments contained in Bill C-79 would, in large measure, have brought the Canada Elections Act in line with the Charter of Rights and Freedoms. In addition, those amendments would have introduced more flexibility into procedures to revise the preliminary lists of electors and would have expanded the rules for proxy voting. If those provisions had been adopted, a substantial number of otherwise disenfranchised electors would have been allowed to vote in the last election.
Unfortunately, these and other important amendments contained in Bill C-79 were not adopted prior to the last election. On many occasions the Government attempted to reach agreement with the Liberal and New Democratic Parties to allow those amendments to proceed. Despite repeated attempts, no such agreement was reached, and Bill C-79 died on the Order Paper.
In order to facilitate the process of developing amendments which can be supported by Members on both sides of the House, including amendments on the important question of election expenses, the Government announced, in the Speech from the Throne, that a commission of inquiry would be established to make recommendations on changes to the electoral laws. The establishment of such a commission was recommended by the Chief Electoral Officer in his 1989 report.
May 1, 1989

The Government remains committed to reforming our electoral laws and to making voting easier and more accessible to Canadians consistent with the provisions of the Charter.
AIR SAFETY-PEARSON INTERNATIONAL AIRPORT-EFFECT OF RECENT GOVERNMENT MEASURES/TESTING OF MEASURES PRIOR TO IMPLEMENTATION


Mr. Joe Comuzzi (Thunder Bay-Nipigon):: Madam Speaker, on December 20, 1988, a Boeing 737 and a Boeing 727 were reported at Pearson International Airport to have almost come into collision with each other. On January 10 there were two other incidents of near mid-air collisions happening within three hours of each other. In response to this occurrence, Madam Speaker, the Canadian Aviation Safety Board made two interim recommendations to the Minister of Transport (Mr. Bouchard) on April 5 which we can refer to as urgent recommendations. In essence, the Board recommended that the northeast arrival and descent area around Pearson Airport be cleaned up and that the vertical spacing between aircraft coming into Pearson be given at least 1,000 feet of clearance from each other.
On April 7, the Minister responded by implementing these two measures at Pearson. At page 571 of Hansard, on April 17 I asked the Minister of Transport if he was aware that the provisions implemented on April 7 had created further safety problems at Pearson.
Based on the best information I have and monitored by the effectiveness of these changes, I informed the House and the Minister on that date that these measures have saturated air space east of Pearson and forced en route controllers to stack airplanes as far back as Coe Hill, Ontario, which is 95 miles from Pearson. This has created further havoc for controllers due to the reduction of landing flights from 42 to 32 an hour.
I further informed the Minister that en route controllers had not received any sort of briefing on these measures. In my supplementary question, I further informed the Minister that the rigidity of these measures almost caused another mid-air collision.
Adjournment Debate
Flights into Pearson on Sundays are now being instructed to circle from Ottawa or corkscrew over Coe Hill. What is happening is a flight takes off from Ottawa and corkscrews before it is allowed to land in Toronto.
This takes peak hour congestion away from Pearson but transfers the problem to the air space between Ottawa and Toronto. With a current shortage of 74 air traffic controllers at Pearson, it is not difficult to see that logically this involves a safety problem.
In light of this information, I asked the Minister to take appropriate action to ensure the safety of Canadians, yet the Minister failed to address this urgent matter. No action has been taken to date and that is why I am here before you, Mr. Speaker, to address this issue once again.
In his response, the Minister suggested that the measures implemented were proposed by the Canadian Aviation Safety Board after the near miss in Toronto in November. This makes me question whether the Minister read the Canadian Aviation Safety Board Report. It clearly states that there was a near miss in December 1988 and two near misses in January, not in November.
In further response to my question, the Minister stated: "We have talked about safety in the Canadian skies for the last two or three weeks, perhaps longer. I hope he is not now telling me today"-referring to me-"that because there are more delays in Toronto, we should decrease safety in Canadian skies."
My question clearly did not ask the Minister to respond to the increase in delays. I specifically asked the Minister to address the air safety problems being created by the measures he introduced. If the measures did nothing more than create further delays, I would not have asked the question that day.
To my supplementary question, the Minister responded that it is absolutely normal that at the beginning it could create some problems for the controllers. What we did was necessary for Canadian air safety.
I found it interesting that the Minister would admit that there may be some problems for the air traffic controllers. For how long, if at all, can we tolerate such problems before they pose and create a safety risk?

May 1, 1989
Adjournment Debate
My question to the Minister was asked ten days after the measures had been introduced, and it is now May 1. How many more days must pass before this question will be dealt with as I proposed on an urgent basis? If the air traffic controllers are having problems with these measures, they should send a clear signal to the Minister and the Government that safety problems are being created. My question was an attempt to get the Minister to respond immediately to these safety problems and not to delay problems.
I urge the Parliamentary Secretary not to answer my question by telling me that two justices, Justice Estey and Justice Moshansky will be dealing with the Dryden and Gander problem because those problems do not reflect what is happening at Pearson. The Parliamentary Secretary should not respond to my question by saying that the Canadian Aviation Safety Board will be replaced with new legislation under Bill C-2. Nor should he respond what he responded last time I asked this question by saying that the Minister has conducted an in-depth review and there will be something coming before the House in the very near future.
Those are not answers to the very critical question that concerns safety from Ottawa to Toronto and at Pearson International Airport. I therefore ask my question once more: What are the Minister and this Government going to do with respect to the safety in our airways between Ottawa and Toronto as it definitely affects the air space around Pearson International Airport?


Mr. Bill Kempling (Parliamentary Secretary to the Minister of Employment and Immigration):: Madam Speaker, the Hon. Member opposite should make up his mind. Prior to the implementation of the Canadian Aviation Safety Board recommendations in question, he rose in this House to ask the Minister when they were going to be addressed. Now, two weeks later, he rises again to state that the safety measures in question are now safety hazards. There appears to be some inconsistency or confusion on the Member's part.
I would like to provide some clarification for my friend across the way. The procedures to which he refers have always been the practice at Pearson. That is to say, arriving aircraft executing simultaneous approaches on parallel runways have always been designated either "high-side" or "low-side" in order to maintain a vertical
separation of 1,000 feet. Which aircraft was high and which one was low was, in the past, left to the discretion of the air traffic controller. All we have done is remove the discretion. One runway has been designated for the "high-side" and the other for the "low side".
Therefore, there is no need to run these procedures through a simulator. They are not new procedures. Controllers are simply being asked to do what they have always done in a different way, in a standard format if you will. As with all changes, large or small, a period of adaptation is required. This means that some delays may occur, not decreased safety. I repeat, not decreased safety.
As the Minister has repeatedly stated in this House and elsewhere, controllers will never be asked to handle more traffic than can be dealt with safely. I fully realize that the explanation I have just provided is not complete. It would be very difficult to get into the technical aspects of these procedures in the short time available to me today. I would be very pleased to arrange a detailed briefing for the Hon. Member at his convenience so that he may fully understand this matter.
UNEMPLOYMENT INSURANCE-UNEMPLOYMENT IN BLACK COMMUNITY-EFFECT OF CHANGES TO SYSTEM/EXPENDITURE OF FUNDS-REQUEST FOR AFFIRMATIVE ACTION STIPULATION


Ronald MacDonald: Madam Speaker, on April 14, some two weeks ago, I asked the Minister of Employment and Immigration (Mrs. McDougall) several questions concerning the changes that she had recently announced to the unemployment insurance system. I specifically asked the Minister about the negative effect that these changes would have on some of the minority communities in Canada, specifically, the native and the black communities.
The Minister's response that day was very telling. She went on at some length about the training programs and other initiatives that her Department and her Government has undertaken to try to combat the problem of high unemployment among the black and native communities as well as other minority communities. Her answer showed her complete lack of understanding of the unfair economic burden faced by these minority groups.
I know this problem firsthand because I am fortunate, and I will underline fortunate, to represent the largest native, black community in Canada in my constituency of Dartmouth. The fact is that although my riding has an
May 1, 1989

unemployment rate of only 8 per cent, the unemployment rate in the black community in my riding can go as high as 80 per cent in the winter and at the best of times is usually between 30 per cent and 50 per cent. That is completely unacceptable. It is unacceptable in Dartmouth, it is unacceptable in Nova Scotia and it should be unacceptable in Canada. It should be unacceptable to the Minister as well.
A large percentage of individuals in that community who draw unemployment insurance benefits do so after qualifying with the minimum number of weeks. Prior to these changes, that minimum qualification was 12 weeks. That qualification has now gone up to 18 weeks.
If the Minister thinks for a minute that the results of her changes do not triply disadvantage members of minority communities, she should visit one or two or three of those minority communities and ask the people who have been affected by those changes. Because of these changes, the Government may save some money.
However, for the real people who are affected by these cuts the results are more economic hardship and increased reliance on welfare with a subsequent loss of self-worth and dignity which is especially crippling in our minority communities.
The employment programs to which the Minister referred on April 14 are very well-intentioned. However, in the case of the Preston area many times they have overshot their mark. For instance. Community Futures is a very good program to help communities in some economic difficulty to put together an economic plan to take themselves out of that cast of welfare, low wages and low self-esteem. However, for many reasons, most of them bureaucratic, the community of Preston, North Preston, Cherrybrook is not eligible for Community Futures, at least not at this point in time. I have mentioned that the reasons are mostly bureaucratic. However, I also think it signals that the Government does not have the will to ensure that the programs that are currently in force are targeted to those individuals who need them the most. Indeed, the Department of Employment and Immigration does not even have current statistics on the rate of unemployment in the black community in Nova Scotia, let alone the black community in my riding in Nova Scotia.
Adjournment Debate
I checked the records of Canada Employment and Immigration. The most recent statistic that it has, and it is a slanted statistic, is from 1986. For goodness sakes, if the Government has not been able to pull a statistic from its own Department from 1986 to 1989, I suggest to the Minister that somebody in the Department has fallen asleep at the wheel.
The questions I asked were real. I was not tiying to gain any partisan political points. I was trying to represent my constituents. I was also trying to represent many minority groups which increasingly feel disenfranchised from the political process and from Parliament. In response to my question about whether or not she agreed that those changes would unfairly hit people in minority communities, the black and native communities across Canada, the Minister said:
-our job training planning since 1985 has been directed specifically at doubly disadvantaged groups, groups like visible minorities, the disabled and others who have particular needs. We will continue to do that under the new scheme.
I would think that the Minister, after the information I gave her in the House that day, would understand that she is not trying to improve the problem of the doubly disadvantaged, what she was doing with these changes is turning the doubly disadvantaged into the triply disadvantaged, especially the black community in Nova Scotia.
In response to my second question which asked for an assurance that she would attach an affirmative action provision to the spending of any new funds aimed at training for these doubly disadvantaged groups, the Minister said:
The Canadian Jobs Strategy provides exactly what the Member is
asking for.
The response she gave to my questions shows the callousness of the Government's approach in dealing with the real hardships faced by those people who have to go on unemployment insurance. After she told me that, she stated that the Government was also looking at concluding an agreement with the provinces to put $200 million into new programs for welfare. That is exactly where those individuals will end up-on welfare. That is what breaks the backs of the minority communities in the country. It is unacceptable in this day and age. It should be unacceptable to the Minister.
Since the Minister is not available right now, I would like to ask her Parliamentary Secretary to answer these real concerns, these real questions, these non-partisan questions. I asked the Minister if she was prepared to give a commitment that she would review her Department's programs and include an affirmative action provision to ensure that those minority groups which would be devastated by these unfair changes would be given

May 1, 1989
Adjournment Debate
priority consideration in future programs. I put the question forward again. She has not answered to my satisfaction. She has not answered to the satisfaction of Canadians. She is allowing the minority communities in Canada to face a very bleak future, a bleak summer and a very bad winter. I hope that in response to my question the Minister will offer some help to those affected the most.


William James Kempling: Madam Speaker, the Hon. Member wanted an assurance that visible minorities would not be adversely affected by the proposals contained in the policy paper tabled by the Hon. Minister of Employment and Immigration (Mrs. McDougall) on April 11. The amendments to the unemployment insurance program are not targeted toward any special group. Rather, they are designed to raise the efficiency of the labour market. A key aspect of the labour force development strategy, however, is a reallocation of expenditures to more "active" training and re-employment measures for the unemployed. "Active" spending helps the disadvantaged most by giving them the skills necessary to get good jobs. The unemployed people that I have talked to want jobs. They do not want hand-outs. I can assure the
Hon. Member that under this Government, disadvantaged Canadians will not be overlooked.
The Canadian Jobs Strategy already has target levels for visible minorities. These target levels will be maintained, providing more money for training and will guarantee more funds going to visible minorities. This Government introduced the Employment Equity Program and the Federal Contractor's Program which provide opportunities for increased labour force participation of women, aboriginal people, visible minorities and persons with disabilities. I can assure the Hon. Member that the Labour Force Development Strategy is intended to speed up the integration of visible minorities in the labour market. Measures throughout the strategy will accelerate the integration of employment equity goals and action plans in private sector policies and programs.


The Acting Speaker (Mrs. Champagne):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 11 a.m., pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 18.27 p.m.
[Stage Direction]
Tuesday, May 2,1989