1989-06-19

Mr. Albert Cooper (Parliamentary Secretary to Government House Leader):: Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the Government's response to 30 petitions.
[Editor's note: See today's Votes and Proceedings..]


Mr. Guy Ricard (Laval):: Mr. Speaker, I have the honour to present, in both official languages, the report of the Legislative Committee on Bill C-17, an Act to amend the Customs Tariff, without amendment.
[Editor's Note: See today's Votes and Proceedings.]



Mr. Don Blenkarn (Mississauga South):: Mr. Speaker, pursuant to Standing Order 36 I have the honour to present a petition from a number of constituents of
Mississauga South dealing with the problem of air noise over Mississauga South occasioned by the activity at Pearson International Airport.


Mr. Ray Funk (Prince Albert-Churchill River):: Mr. Speaker, I have the honour to present a petition from the residents of Wollaston Lake and Hatchet Lake in the north part of Saskatchewan. There are about 900 people in those communities, 300 of whom have signed this petition. The only media services they get are those from satellite. There is no local, provincial or regional media coverage.
This petition calls on the CBC to build a transmitter, as is its mandate for every community with a population over 500. It is my honour to present this petition to call upon the CBC to build a transmitter in Wollaston.


Mrs. Barbara Sparrow (Calgary Southwest):: Mr. Speaker, I have the honour under the provisions under Standing Order 36 to present many petitions containing the signatures of 9,833 citizens of Calgary who want to retain the uniformity of the RCMP uniform.
These petitioners say that the RCMP has a long and honourable tradition, known and admired around the world. They want to make it clear that they are not discriminating on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability. The Charter of Rights and Freedoms prevents that under equality of rights provisions in Section 15.
All persons must have the right to apply for positions in the RCMP and, of course, competence and qualifications must be tested and criteria must be maintained. The uniform of our RCMP is part of our Canadian heritage and our Canadian culture. That is what these signatories want to preserve.
These petitioners humbly pray and call upon Parliament to preserve the distinctive heritage and tradition of the RCMP by retaining the uniformity of the dress code
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Order Paper Questions
with all the recognized colour and trappings that have such a great historical value for this country.
I want to thank the three ladies in Calgary, Alberta, who worked days, weeks and months to obtain the 9,833 signatures. They are proud Canadians and want the Canadian identity protected.


Mr. Iain Angus (Thunder Bay-Atikokan):: Mr. Speaker, I rise under the provisions of Standing Order 36 to table a petition with this House. The petition is signed by residents in the Kingston, Napanee and Ottawa area of this province. They express their concerns about the changes to the Unemployment Insurance Act.
The petitioners call upon Parliament to move immediately to adopt the recommendations presented to it by the Standing Committee on Labour, Employment and Immigration in its report to the 33rd Parliament, Second Session, and reject any proposals to fund much-needed training programs from unemployment benefit funds.


Mr. George Proud (Hillsborough):: Mr. Speaker, pursuant to Standing Order 36,1 have the honour today to present to this House a duly certified first instalment of a petition from over 6,500 concerned citizens of Prince Edward Island.
This petition was circulated by Mr. Frank Lewis of radio station CFCY and Ken Simms of The Guardian Patriot newspaper on behalf of those who wish to save the CFB Summerside because of the socioeconomic and emotional impact of this decision. It is of great concern to all Islanders that the Government reconsider its decision.


Mr. Ian Waddell (Port Moody-Coquitlam):: Mr. Speaker, pursuant to the same rule, I have a petition from a number of people in Edmonton, Alberta and other parts of Canada opposing the Government's spending on arms and armaments and its involvement in the arms bazaar here in Ottawa. These people are not against bases like Summerside where there are search and rescue and similar activities. They are against military spending on arms and dealing with countries that
are human rights violators. I would like to table that petition.


Mr. Nelson A. Riis (Kamloops):: Mr. Speaker, it is my pleasure and honour to present a petition pursuant to Standing Order 36 on behalf of a number of residents of Kamloops, British Columbia who are utterly dismayed that the Government plans to have people that receive unemployment insurance pay for their own training.
It is a long petition, and it lists all the reasons for their feelings of betrayal, frustration and disbelief that the Government of Canada would act in such a cruel way. So I will table it, Mr. Speaker, and perhaps you will have a chance to look at it later yourself.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
Mr. Albert Cooper Parliamentary Secretary to Government House Leader): Mr. Speaker, just before asking that the questions be allowed to stand, I would like to indicate that there are about seven or eight questions that we are presently behind on the 45 day notice. I wish to indicate to the House that I am doing my best to get those in as quickly as possible. But I would ask that all the remaining questions be allowed to stand.
Nelson Andrew Riis: Mr. Speaker, I appreciate the point that there may be some questions on the Order Paper that would require longer than the 45 days for justifiable reasons. I would ask that the Government, when it finds itself in that position, consult with the Opposition House Leaders so that our Members can be informed that answers are actively being pursued and will be forthcoming.


Albert Glen Cooper: Mr. Speaker, I will be happy to co-operate with that suggestion. I can indicate that most of the questions that are outstanding are from this side of the House rather than the Opposition side, but we will certainly take that into account.


Mr. Speaker:: I must say that probably all Hon. Members appreciate the Hon. Parliamentary Secretary indicating that there is some difficulty in meeting the 45 day request. The Hon. Member for Kamloops is completely within his rights in asking that there be some discussion when this does happen. It may not be a procedural rule, but it seems to me that it would help matters in this
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place. I appreciate the Parliamentary Secretary's approach to this.


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


Mr. Speaker:: Is it agreed?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Wednesday, June 14, consideration of the motion of Mr. Wilson (Etobicoke Centre) that Bill C-ll, an Act to provide borrowing authority, be read the third time and passed.
Mr. Fred J. Mifflin (Bonavista-TVinity-Conception):: Mr. Speaker, I am delighted to have the opportunity to speak on the borrowing Bill today. I have heard a lot being said about this particular Bill, the Budget and all the things that have led up to it. It is difficult to speak without repeating much of what has been said before, but one has to really put this whole thing into perspective. Standing on this side of the House it is veiy difficult to say something without being accused of being partisan, but that is fair game.
Let me assure you and all Members of the House, Mr. Speaker, that as I stand on my feet first thing on a Monday morning at 11.16 a.m. to talk about the borrowing Bill, the results that will emanate from the way the Government is doing its business and the effect it will have on my riding and the people in it, need to be summarized one more time for all sides of the House.
I would preface my comments by saying that if they appear to be overly partisan, that certainly was not the original intent. The thread through my presentation, if there is one, will be how this is viewed by rural Canada and what it will mean to the people of my riding of Bonavista-Trinity-Conception who have their own vision of Canada. It is fair that I should be allowed, even compelled, to represent their vision on this very important subject as it will have an effect, not in the short term, but in the long term, not just on the finances and deficit control in this country, but on our Canadian way
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of life and, in particular, on our rural Canadian way of life. That very much includes my riding.
There are certain areas on which I would like to focus. First, I would like to give the impression that people have that I have spoken to in the last couple of months. They believe that the Government and the big business community together have a narrowly focused agenda that has been brought out in this Budget and indeed in the Throne Speech itself. Their perception is that what these two have done is to focus solely on the substantial cuts to Government spending, concentrating on defence and cutting out social programs that have been a part of the Canadian way of life for a long time; indeed unemployment insurance since 1940. They believe that there is a joint desire to impose a new massive regressive sales tax on the people of Canada. I can understand their perception. By the way, I believe the perception is entirely correct.
I would like to review some of the things that have been said by some of the spokesmen for the business community. The thread, if there is one, is that there is a lot of talk about the need for cuts in social programs, and a Government response to the Free Trade Agreement. I am not going to tiy to link any of the ills to the Free Trade Agreement. Anything I have to say will have to stand on its own.
However, the belief is that in order to get moving on the things that need to be done by the Government side of the House, it would appear that the level playing field that was discussed so frequently in the free trade discussion and the cutting out of our social programs is very high on the agenda. In fact it is too high on the agenda for my liking. We are already beginning to see the effects of this. One of my concerns is that a lot of my colleagues say that we are not in government and we do not necessarily have the responsibility to come up with the answers. It is my view that the job of the Official Opposition is to criticize and oppose, but I have told my constituents that there are other ways to go about doing business and I am going to suggest some of them here today.
I understand the need for the machinery of government to operate and the need to fuel the economy with big corporations and big business. I am not against big business, I am all for it. However, certain ameliorations, adjustments and improvements should have been considered when this Budget was being put together. I am concerned that the corporations' share of the tax burden

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has fallen tremendously in the last 15 or 20 years despite the various tax reforms which I believe were intended to increase corporations' share of the tax burden.
In 1965 personal income taxes made up 30 per cent of Canada's revenue and corporate taxes made up 20 per cent. In 1988 the situation had changed dramatically. Canadians now pay 44 per cent in personal taxes and corporations pay 11 per cent. It is quite a change from 30 and 20 to 44 and 11 and I wonder where it is heading.
There is another aspect of this subject. Last year big business received a total of $8.9 billion in grants and subsidies from the Government. That is hard to believe. According to a Library of Parliament study, which I think is a pretty reputable source, federal subsidies and assistance payments to big business have grown faster in the past 20 years than social program spending. These subsidies and assistance programs increased from less than 1 per cent of the Gross National Product in 1970 to a peak of 2.5 per cent in the mid-1980s. That is an increase of 1.5 per cent of the Gross National Product in 15 years.
There is another aspect of the $8.9 billion that is being paid to big business. The Canadian Federation of Independent Business which represents 80,000 small firms across Canada said recently that a comprehensive deficit reduction program should include, not a small reduction or a big reduction, but the elimination of the grants and pay-outs to big business.
Their report claims that the economic activity which is the direct result of government grants often falls short in the long run. They go on to say that when a big business, or small business for that matter, is the recipient of these hand-outs the result, in fact, is a degradation of the market-place and it provides a competitive disadvantage for those companies which do not receive a hand-out. The Canadian Federation of Independent Business is a reputable organization and is not partisan as far as I know. I would, therefore, take note of that. I know that a lot of people in my riding have read these kinds of things and are asking me why we do not do something with the
$8.9 billion that is being paid to big business which does not seem to be doing what it was meant to do.
The other aspect which concerns a lot of people in my riding, and I am sure all Canadians, is the uncertainty of what will happen with income tax reform. Looming over our heads is a sales tax. We think we know that it is going to be a certain percentage, we believe it is going to be roughly revenue neutral, but the details of the goods and sales tax which is going to be upon us in 1991 are anything but clear.
Recently the Minister of Finance confirmed that we would begin paying a 9 per cent sales tax on almost everything except main food, rent, health care and education. I do not have to remind anyone in Bonavis-ta-Trinity-Conception who is listening to me that this is 9 per cent on top of the existing 12 per cent. This is a 21 per cent tax on anything you buy or any service you have performed.
I remember when Newfoundland joined Confederation in 1949 and a 7 per cent sales tax was imposed. I remember how tremendous and horrific that was and we are now looking at a 25 per cent sales tax. What is that going to do to the people who have enough difficulty buying clothes to put on their children's back as it is?
This tax started out to be revenue neutral, which is an interesting catch phrase. I do not hear nearly as much talk about revenue neutrality now. What does revenue neutral mean? I do not know. I cannot find any description and I have not heard it defined by the Hon. Minister of Finance. In fact his definition seems to be getting a little more flexible as time goes by. I read media reports saying that the tax grab has already started.
The idea was to remove the manufacturers' sales tax which was, I think, 12 per cent before this Budget and is now taking in roughly $13 billion. However, the manufacturers' sales tax has already gone up to 13.5 per cent and is going to take in another couple of billion dollars. Where does this revenue neutrality start?
We are talking about 9 per cent. I can tell you, Mr. Speaker, that anyone who knows anything about value-added taxes looks at the countries which have involved themselves in this very interesting experiment. They have come up with some very interesting findings. I was given a list of some of the European countries involved. I
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do not want anyone to look at the record and say that I was misrepresenting the idea, but I would have to say that the value-added tax of which I speak is not the same exactly, but the principle is the same, the intent is the same, and the graduation is the same.
In Denmark the year of introduction was 1967. It started off at 10 per cent. In 1988 it was 22 per cent. It has gone from 10 per cent to 22 per cent. In France the year of introduction was 1968. It started off at 13.6 per cent and is now 18.6 per cent. France has not done too badly. Remember, we are starting off at 9 per cent in 1991. Germany started off in 1968 at 10 per cent and is now at 14 per cent.
In the interest of brevity I will quote only a few more. Britain started in 1973. Do you remember the fuss when they started with the value-added tax over there? It is now up to 15 per cent. Sweden started in 1969 at 11.1 per cent, less than ours, and are up to 23.5 per cent. The list goes on.
The point I am making is that the principle has been established and all we are haggling over now is the price. I fear tremendously the revenue neutrality aspect of this. I have fears of where we will be 10 years from now. What will the 9 per cent grow to be? The European experience is that in 15 years it has roughly doubled. What will that do to us? I am concerned about that as I think we should all be.
There is another aspect which has me veiy worried. I am talking about the general financing of the way we do business in Newfoundland. I do not think it is a surprise to anyone in this House that Newfoundland depends very much on revenue from the transfer payments to the provinces. They amount to 45 cents out of every dollar and very much depends on where you put it and how you look at it.
People on this side of the House have asked what we are worried about because we are getting an increase. Yes, we are getting an increase but we had budgeted for a certain amount and we are getting a lot less. I look, for example, at the transfer payments to the provinces. People on this side of the House ask what I am complaining about because we are going to get more than we got last year.
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Yes, we are, but we are not going to get as much as we thought we were going to get. I think in the case of Newfoundland it is the difference from $23 million to $24 million, to $19 million. That is a lot of money when we look at a province which depends on almost 50 per cent of its budget from the federal Government. Over all in Canada to the provinces which depend on regional transfers it is $200 million. That is a lot of money, when it had not been allowed for.
Dealing with ERDAs, the same subject of money from the federal Government to the provinces, my family, my constituents, and my friends have been involved in a lot of the aspects of federal government grants and transfers in the form of the Economic Regional Development Agreements. There is no way in which I can emote, postulate or indicate their importance to Newfoundland.
I am trying to do all I can here. A lot of people, along with me, in the Newfoundland Government and entrepreneurs in Newfoundland are trying to promote tourism. We find that the ERDA, the Economic Regional Development Agreement which was signed lasted for five years in Newfoundland, to the tune of $21 million. Our Minister of Tourism and Development had to return to Newfoundland a couple of weeks ago with the sad news that we are not to get this renewed.
I do not want to sound like somebody from a rural riding of Newfoundland who is always getting up, complaining, and crying that he is not getting enough. I just want our fair share. Tourism in Newfoundland is still in its embryo stages. I think it is going to be big. I hope that I can help it along.
However, when I see these kinds of obstacles standing in front of me and staring me in the face, I have to remind myself that we are behind in tourism development in Newfoundland. Our fair share is perhaps more than what the fair share would have been for any other province.
To begin with, tourism really had not started until about 10 years ago or maybe 15 years ago. It is still in the early stages. We have almost 100 miles, 90-plus miles, separating us from the mainland of Canada. These are two very important considerations which I am sure were eloquently argued by the Minister of Tourism and Development. We still do not have the money. This is one example of our concern about the cut-backs that

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have taken place of which Newfoundland is the recipient.
Later I will be speaking on Bill C-21 dealing with unemployment insurance. I do not want to digress into that. In the interest of time, I am sticking to the main point which is the borrowing Bill. In the context of the over-all effect which it will have on my constituents, I could not sit down without bringing to the attention of the House the Job Development Program which is part of the amendments to the Unemployment Insurance Act. Even now, before the Act has been put in place, it has had a tremendous effect on my riding. I think it is safe to say that the organization which was represented by the Canada Employment Centres in Newfoundland- and I know I am speaking for my riding-represents about 20 per cent of the economy. That is a lot of money.
In Job Development Strategy in Canada we find that we are losing $53 million. That is $53 million less, which means millions of dollars to my rural riding. This means that jobs will not get done. This means that people who are unemployed will not get jobs. This means that people who would have their incomes raised higher by higher paying jobs will not have that happen.
I want to thank the Hon. Member for Burlington who gave me a list of some of the job opportunities which were there. I reviewed them in fine detail with my constituency office and with many of my constituents. They were quite impressed that in fact some of the jobs have a bearing on my riding in particular. However, two things came out of most of them that would be available in Newfoundland.First, a lot of the jobs were available in Labrador. Of course, people in my riding are not particularly interested in going to Labrador. Second, a lot of jobs in general for Newfoundland are centred in the urban areas, St. John's, Comer Brook, and Grand Falls. While I again thank the Hon. Member for the opportunity to have a look at that and make use of it, which we are doing, unfortunately most of these jobs relating to Job Development Strategy are in urban areas. It is not going to be very helpful to us at all.
Thming to the business of unemployment insurance not changing very much in the sense of not losing jobs, I do not have to say that the unemployment rate in Newfoundland is extremely high. It is around 15 per cent right now. For the rural areas, it is over 20 per cent. I
think the last time I looked at the average, it was 23 per cent, 24 per cent, 25 per cent.
As I wrap up my remarks on this Bill I would like to go on record to say that I am deeply concerned. I represent the deep concern and almost alarm of my riding on the effect that some of these things, which may be well intended, will have on rural Canada and rural Newfoundland.
What are we going to do about it? What could we have done? I think we could have looked at big business. We could have looked at corporations with a minimum tax. A lot of corporations do not pay taxes. We could have had an adjustment period for these changes which are taking place in unemployment insurance. I think that would have improved the situation somewhat. We could have given people more warning.
As far as the goods and services sales tax is concerned, the impact has not really hit people yet. I think we need to have a good look at it. Is it the way to go, or are there other ways?
I did not have an opportunity to speak on the tremendous effect Canadian-wise that the more than fair cuts out of defence are having on my previous colleagues in National Defence. That will be a subject of some separate comments. I would like to thank you, Mr. Speaker, for your generosity in allowing me to finish the threads of my thoughts.


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


Mr. Milliken:: Mr. Speaker, I commend my colleague on his excellent speech. During the provincial election campaign in Newfoundland, he attended in that province and watched the thrashing administered to the Conservative Government during the election campaign. I suspect that that was in part because the Government had tied itself too closely to the hon. gentlemen who sit on the other side of this House. Had we another election in Canada today, I expect the same thing would happen to them.
The point of my question is to deal with the ERDA funding which I understand is now up in the air in Newfoundland. That is part of the budget proposals that have been under discussion in this House and that are

the subject of the borrowing which is being done in this Bill.
It is my understanding that during the election campaign in Newfoundland, the Premier of Newfoundland claimed that an agreement had been reached with the federal Government for a continuation of the ERDA arrangements. Subsequently, it was discovered after the election that in fact no agreement had been signed. The federal Government, composed of the Hon. Members who sit on the other side of this House, did nothing to deny the statements of the Premier of Newfoundland during the election.
I wonder if my hon. friend could enlighten the House on this subject and tell us whether in fact something was done to deceive the people of Newfoundland in the course of that election concerning those grants. Perhaps he would be able to explain the position.


Fred J. Mifflin: Mr. Speaker, I thank the Hon. Member for Kingston and the Islands for that question. Yes, indeed, this was the subject of some great concern while I was over in Newfoundland during the election campaign.
I left Ottawa with the impression that certain ERDA arrangements had not been negotiated or renegotiated as the case may be. I was kind of nonplussed when I arrived in the province because I was told: "No, no, you do not have any worries about that". In fact I was campaigning up in Bonavista North with the now Speaker of the House, the Honourable Tom Lush who represents Bonavista North. I was told: "No, no, don't use that in your campaign because the Premier has already announced that over $80 million had been approved". There was a Labrador agreement. I do not know the exact name of it, but it had to do with Labrador development. The other one was rural and northern development for Newfoundland.
In my riding I have 10 rural development associations. They are in many ways the focal point of activity which gets things going. I was campaigning and talking to the chairman of these committees. They must have thought it strange that I did not bring to bear the fact that these ERDA arrangements to which I spoke earlier this morning had not in fact been negotiated.
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Whether it was a mistake or whatever the case may be, when the then Premier of a province, even of another Party, makes a statement that something has been done I accept those things. The people of Newfoundland accepted it. Certainly the people of the rural associations accepted it. They were launching into programs to get things under way again. As we got a little more deeply into the campaign, in discussion with some of the bureaucrats, I was told: "No, no, these have not yet been approved". I find to my disgust and total consternation that when we get into details of the Budget in fact they have not been approved at all.
The Government served notice that it intended to renegotiate these five-year agreements but that has not been done. I spoke of the tourist agreements which cover aquaculture and fishing. I have four or five projects that are waiting now. They have been held up and probably will not go ahead because there is no money. The pot is empty. It has been drained right out.
As far as mining is concerned, I have a man who has a project that can involve 40 people now and when developed can involve 200 people in a part of my riding where unemployment is up to 30 per cent. I have spent a lot of time trying to help him with it. Regional development agreements are not being approved. We have a combination of the new rules for the reprofiling of ACOA, which mean essentially that one cannot get any money if the project is over $200,000. This man is a pretty brave and strong individual. He has not given up, but had he been someone of lesser courage he would have said: "The game is not stacked in my favour this time around". This man is not happy because of regional development agreements and the changes in the rules of ACOA.
I think reprofiling must mean the same as revenue neutral. We have description, definition, and understanding. I wish we could find better words to convey a better understanding of it. My energies will be focused into trying to get these well intentioned agreements into play. Everyone in the business knew exactly what they meant to my riding, to Newfoundland, and to Atlantic Canada. We have the Atlantic Canada Opportunities Agency. Those opportunities have now become pipe dreams and lost hopes. People have had projects in for as

June 19, 1989
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much as $3 million, $2 million, $1 million, to help the tourism industry, but now they cannot be done.
I had to give an answer to my hon. friend, perhaps a rather longer one than he had expected. We were very disappointed that we were told yes, then no, and now maybe. I am not sure where we will go from here so you can understand the indecision and lack of direction right now, Mr. Speaker. It adds to the confusion, consternation, and very uncomfortable feeling that people have from where I come. It is going to be pretty tough on the East Coast of Newfoundland this winter.


Mr. Althouse:: Mr. Speaker, it was interesting to hear the Hon. Member in his initial remarks be quite condemnatory of the $8.9 billion he has identified as money going to the large corporate sector from government funds. I concur with him that this does not seem to be something which is necessary.
Some analysts have great difficulty separating out assistance to corporations by size. Could the Hon. Member clarify what he means by pulling away that funding in relation to the criticism that he also had of the Government's attempt to pull away funding from business through ACOA, EPF funding, and the other funding projects about which he has just spoken? Could he tell us what the distinction should be from his Party's point of view and how pulling away the $8.9 billion funding to the very large multinational corporations would assist outlying regions such as Newfoundland or, in my case, Saskatchewan?


Fred J. Mifflin: Mr. Speaker, I differentiate very much between the two. First, turning to the $8.9 billion, I can tell the Hon. Member that we do not have many corporations in my riding that would get a piece of that $8.9 billion. His point is certainly not lost of me. The money from ACOA which is being reprofiled had the potential of going to people like the gentleman who wanted to start a mine and create 200 jobs. A constituent of mine has been trying for three years to get a small resort hotel in Conception Bay North where we were going to have a lot of extra economic activity from the prison that was going to be built in Harbour Grace. That is gone now and so is the ACOA possibility. There is a big difference.
I would be more inclined to tap that $8.9 billion as part of deficit reduction program than I would to reprofile the ACOA and make it more difficult for people to get anything over $200,000 to help to get the economy in my riding, and I suspect in his riding, off the ground a little bit faster. I thank the Hon. Member for his question.


Ms. Lynn Hunter (Saanich-Gulf Islands):: Mr. Speaker, I am pleased to speak today on the borrowing Bill. As my Party's spokesperson for international development, I want to take the opportunity to make some comments on the over-all Budget of this Government.
This Budget is a deceptive Budget. The Government is saying one thing and is doing another. For example, the Government has supported the Brundtland commission report for international development and environmental assistance. That report states very clearly how interlinked we are, that we have to think in global terms. We can no longer just think nationally; we must think internationally.
It was with a great deal of hope that we heard this Government was to support those recommendations. This Budget demonstrates that the Government's understanding of those recommendations are very limited because the hardest area hit in this Budget was international development assistance. Almost one-quarter of all the spending cuts made by the federal Government were taken in the Budget for foreign aid. Although Overseas Development Assistance represented only 2.8 per Cent of federal spending in the years 1988-1989, it accounted for 23.3 per cent of the cut-backs for the years 1989-1990.
The dollar figures we are talking about in these budget cuts is $360 million. Many people wonder about cutting and know it has to be cut somewhere. Members on this side of the House have been concerned with the cuts to our social programs. I do not see these cuts as distinct from one another. When we are talking about cuts of that magnitude the Government has an agenda and that is what I want to talk about today.
Domestic cuts and cuts to international development assistance are a fundamental shift in philosophy, a shift to the right to a more free market thinking that fits in with the whole free trade agenda. I know government Members do not like it when we raise this point. They
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get glazed eyes when we talk about it. However, when we see that this is happening we have to speak out.
The free market agenda is a turning inwards. We are saying: "We are all right. We do not need to worry about those people over there. Somebody else will worry about it". We have to get away from that kind of thinking if our world is to survive. The Government, by saying that it wants to cut the deficit, is falling into that trap of short-term thinking.
We must open our minds and see where the real solutions are to the global problems that confront us as legislators. We need to do more than just speak up in the House. We have to be prepared to change our views and ideas. The situation in our world demands it.
The Government's Budget is in fact a self-imposed structural adjustment. The structural adjustment that has been imposed on developing countries by the International Monetary Fund is one the Government has decided to make on its own through this Budget. It has cut regional development programs and social programs. It is slowly and surely eliminating unemployment insurance benefits. It is privatizing and buying into the market system which the International Monetary Fund is thrusting upon the world, in the vain hope that it will prop up the international banking system.
It is the banking system that has caused much of the grief in this world. With this Budget the Government is not only protecting those banks but is buying into that whole value system of bankers rejecting the people who are the most vulnerable both here in Canada and overseas. They reject those people who do not have a voice, aside from those few of us on this side of the House who have the courage to stand up and say: "No, we know what they are up to. We know their agenda". We are going to talk about it.
We must ask ourselves who is pulling the strings, who will benefit from Canada turning inward. Whoever is pulling the strings is doing it because we will be so worried about our own deficit and our own internal problems that we will be quiet, we will not speak out or criticize when things happen in Central America, Africa, or Indonesia. We will be so focused on our own social strife that we will not criticize those superpowers that are bringing death and destruction overseas.
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We know what is going on. We know the agenda and we are not prepared to be quiet about it. We also have to speak out, as has been done very well by many Members on this side of the House, about the social programs that will be affected and the grief and hardship that will bring about here in Canada. These things cannot be distinct. They are all part of the same plan, this monetarist view of the world that has been so destructive.
Canada's wealth and status as one of the G-7 nations and our repeated previous commitments to increase aid contributions indicate the considerable moral responsibility we bear in this suffering world. Canadians have stated their support for international development programs, yet these cuts threaten abandonment of these key commitments, a weakening of our positive role in world affairs, and a loss of moral authority. It is that moral authority, as much as our ability to send money overseas, that is most worrisome.
We have lived on our international reputation, established largely in the 1960s under former Prime Minister Pearson. We have a strong international reputation and we have lived on that capital for a long time. We have not put very much into it. It was with a good deal of hope that last September we heard the Prime Minister say the following before the United Nations:
Increased development assistance, especially to the poorest countries, is another imperative. Canada has just completed a review of its Official Development Assistance policy. We have reset our bearings to improve the quality and increased the quantity of help we give.
He said that on September 29, 1988. That is why I say that this is a deceptive Budget. Six months later, the Government brought down a Budget which cut $360 million from international development assistance. Once again, the Government was saying one thing and doing another. Did the Government not know that it had a deficit problem six months ago? The problem is that an election campaign intervened. This is why people have lost confidence in politicians. They say one thing and do another. We have to change that because we are running out of time. We do not have the time to be able to say one thing and do another.
In 1984 official development assistance equalled .5 per cent of our Gross National Product. For 1989-90 it has been cut back to .43 per cent. We are going backward in a world that has increasing problems. We have lost our moral authority. The Prime Minister's statement to the United Nations, although it did not appear bland at the time, has turned out to be bland because he is not putting any money behind his statement. We thought

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that he had some understanding of the recommendations of the Brundtland commission about the view that the world is interdependent and that we in the developed world have some responsibility to address the ills overseas.
There is a self-imposed structural adjustment program in Canada. There are reductions in regional payments. In British Columbia there are reductions in health care payments and the nurses are currently on strike. There have been reductions in post-secondary education. We are now very concerned about possible cuts in the forestry agreements. It all fits into the mode of linear thinking. Lord preserve us from linear thinkers, and there are more than an abundance of them across the way.
We have to understand that foreign aid is not a frill. It is our contribution to a more stable world. We will not buy into the mindset that says that bigger and better armaments will make us more secure. Thinking people have rejected that mindset long ago. If we want a more stable world, we have to be able to reduce the causes of instability. That means we have to eliminate poverty.
A nice glossy document about Canadian international development assistance says that the first priority is the elimination of poverty. Then the Minister responsible has said that we also have to take our share of the cuts. One quarter of the budget cuts is much more than our share of the cuts. The Minister being an apologist for the Budget is something I find most offensive.
We have to understand that Canada has not only a financial obligation, but a moral one. We have to use our credibility. One wonders why we have so much credibility because of the actions that we often take, but we do have it and we should use that international credibility to effect change, to speak courageously at a world forum such as the United Nations, and to follow up those words
with actions. That means not having cuts in the Budget for international development assistance.
We do not understand why Canada's collective obligations to assist those confronted with economic and social disaster should be so extensively abandoned at this time. We do not believe that Canada's own prosperity can be guaranteed in a fortress North America. We believe that our future is secure only if it is linked with development in which the world's majorities participate. This is a philosophy that Canada has had since the 1960s.
We are a small country in the grand scheme of things, but we have enormous international credibility which is withering away with this Budget and with the actions of the Government. It is fitting in with the grand schemes of the superpowers and the confrontation and polarization that we must resist if the world is going to survive. We have to think about stability and not creating more wars, and the poverty that creates wars, and we also have an obligation to attempt to bring prosperity to other people in the world.
We hear many comments about the refugee flood at our gates, and many people saying: "No, we do not want them. They are going to be taking away our jobs". Those refugees do not want to come. They want to stay in their own countries. It is our obligation to assist them to do that by supporting the development work in their own countries. That is what I am saying about linear thinkers, the turning away, the "we will look after ourselves", clutching ourselves and saying that the rest of the world be damned.
This is what we have to reject. In our Party we do reject this. We have a global vision. We are not only talking in response to government polls that Mr. and Mrs. Middle Canadian states such and such and therefore we will do what they say. We have a long-term vision. We want to change and better this world. This Government's Budget is restricting us from doing that.
Not only is this Budget hammering the poor in Canada by reducing the social programs and by eliminating the universality of our long fought for social programs, but it is also hurting the poor overseas, those most vulnerable,
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those without a voice. How absolutely immoral and heartless of the Government to cut bilateral food aid. Then it states that CIDA has to take its fair share of the cuts. We are not talking about a fair share here. We are talking about people's lives.
There is a connection between the people who are most affected here and the people overseas. We also have to ask who is benefiting. It is not ordinary people here, and it is not ordinary people overseas. It is the big people in their board rooms who are running things and pulling the strings. We are going to continue to speak out against this in the weeks and months ahead.


The Acting Speaker (Mr. Paproski):: On questions or comments the Hon. Minister of State for Privatization.


Mr. McDermid:: I know the interest of the Hon. Member in foreign aid, and she spoke most eloquently about that today. However, I would like to point out, and I am sure the Hon. Member would want to be fair when she discusses those particular matters, that Canada is the second most generous nation of the G-7 countries. Canada is exceeded only by France and by a very small percentage point. As a percentage of the GNP, Canada stands second. Third is Germany, fourth is Italy, fifth is Japan, sixth is the United Kingdom, and seventh is the United States. Our record for aid overseas has been very good. It is never enough. We would always like to do more, however, it has been very good.
Over the next five years more than $16 billion will be given in foreign aid. That is hardly an indication, as the Hon. Member attempted to make out today, that CIDA will be crippled in its ability to do its job. Our commitment will continue. The Hon. Member will be interested to know that with the Budget cuts that Canada is experiencing at the present time, the ODA-GNP ratio will drop from .47 to .43. That is a fairly small drop, but one that was necessary due to the fiscal situation in this country.
Without exception, members of the Opposition have criticized every single cut that the Government has made in the Budget.


Peter Andrew Stewart Milliken: That is not true. That is false.


John Horton McDermid: With the exception of nuclear submarines. I was coming to that, if Members opposite would give me a chance to finish my sentence.
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We have deficit problems and debt problems in this country. For once, I would like to see someone in the Opposition stand up and talk responsibly about where the Government should be cutting back, where we can save money, where we can get the deficit and the debt under control. All they do is stand up, speaker after speaker, and criticize the Government for trying to get its fiscal house in order. Would the Hon. Member rise and give me a list of where she would cut back on the expenditures of the Government?


The Acting Speaker (Mr. Paproski):: I know it is a full moon today, but it is only the noon hour.
The Hon. Member for Saanich-Gulf Islands.


Lynn Hunter: I thank the Hon. Member opposite for his question. I will speak slowly, because we have to get an understanding of what we are talking about here which is a shift in thinking. I am asking the Government to realize that by not cutting foreign aid, by increasing foreign aid, as the Government had committed itself to do, we are investing in our world. Speaking in those terms, perhaps the Hon. Member will understand.
The Hon. Member asked me where I would cut expenditures. He also asked from where the Government would be getting the money. We have made some very concrete suggestions about where that money could come. What we are talking about is economic growth. None of us is opposed to economic growth. We all want economic growth in order that we can contribute more to our society. The Hon. Member knows what is coming, doesn't he? We are talking about 60,000 profitable corporations which paid no income tax at all.


John Horton McDermid: Members opposite stated that it was
87,000	the other day. When are you guys going to get your act together?


Lynn Hunter: I am making a responsible statement as the Minister requested I do. I am downgrading the numbers so that he will not accuse me of inflating the terms at all. I will say 60,000. The Minister can say 87,000, if he wishes. I will be the conservative for a moment.
We are not only talking about cutting. We also want to know who is paying. It is the ordinary people who are always paying. I challenge the Government to start taxing those who can afford it rather than those who cannot.

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Ms. Langan:: Mr. Speaker, the Government talks about the family and its commitment to the family as well as the need to speak for children who cannot speak for themselves. Yet the Government has cut its support to families all over the world. I wonder if the Hon. Member would like to comment further on that subject.


Lynn Hunter: Mr. Speaker, I thank my esteemed colleague for her question. What is most heartless about the Budget is when we think about who is pulling the strings, where they are sitting in their boardrooms and the effect these cuts will have on the children of the world. We are talking about international development food aid. We are cutting food aid. It is ridiculous. They are sitting in their boardrooms which probably look much like this lovely Chamber with lots of oak and velvet while the children of the world starve. It is disgusting. It disgusts me that these people with that kind of power use it so horribly.


Nelson Andrew Riis: Mr. Speaker, I appreciate the opportunity to participate in this debate. My question to the Hon. Member who spoke so eloquently in terms of government cut-backs in critical areas is this. Does she feel that one of the areas the Government might consider cutting back in is the area involving millions of dollars of expenditure on government propaganda and advertising?
We read the other week that the Government will have to hire up to 25,000 tax collectors to collect the new national sales tax. I wonder if there is a need to proceed with that. Can you imagine, Mr. Speaker, the expense involved with the tax collectors themselves-25,000-in a bureaucracy and the red tape associated with it? Could the Hon. Member comment on the areas in which the Government could cut back in immediately. I refer to the coins rolling out on the television screens during the hockey play-offs day after day. The Government spent millions of dollars to tell people: "Listen, raising your taxes and cutting back your services is a good idea".
I have heard the big lie technique which has been used in the past by unscrupulous types. I am not suggesting that this is a Goebbel's like approach to communication. When I hear about the millions of dollars being spent on what I think the Minister of Finance calls government information it is similar to what we are seeing in China today. On television screens there the people see government information which says that there were no student killings, there was no extreme violence and that
the Government was just taking care of a few troublemakers.
Could the Hon. Member explain whether this is an area that she has been thinking about in terms of where we could save the taxpayers a lot of money and also be a little bit more honest with what we are doing by suggesting that the multimillion dollar government propaganda office curtail some of its expenditures?


Lynn Hunter: Mr. Speaker, my honoured colleague brings up a point that is worthy of underlining in Hansard. He talks about the public relations scam that is going on in the country and internationally. We have to be very aware of the type of marketing tools that are available to the Government which will allow it to manipulate public opinion. I think it is to be deplored especially when we think that the Government could be putting its money where it would make a real difference to people's lives. The Government could certainly do some educational work on sustainable development and try to get a sort of Participaction view to have Canadians involved. However, no, the Government talks about the short term. It says: "We will have to tighten our belts. We are not going to take any money from the rich people. We will only take it from you". This is the sort of manipulation of the population that I think is most worrisome.


Mr. George S. Baker (Gander-Grand Falls):: Mr. Speaker, I have a few words to say on this particular Bill, the borrowing authority asked of this House of Commons by the Government of Canada.
The Government is really obsessed by the balance sheet, not so much with the natural saving of money but to give the impression that the Government is making everything profitable and that the philosophy on which it was elected is a good thing.
The other day it was interesting to see Canada Post present its annual report.


Donald Alex Blenkarn: A great thing.


George Baker: The hon. gentleman who went to New Zealand to investigate the new sales tax indicates that he is proud of that report. When one looks at the financial statement of Canada Post one notices two things. First, one sees Canada Post saying that it made a $90 million profit. Then, when one examines the balance sheet one discovers that the federal Government all wed Canada Post not to account for some $34 million in payments to employees who are losing their jobs but allow that figure to appear on the balance sheet over the next 15 years. That is $34 million. It was not enough to bring Canada Post's financial situation into a profit standing. So what did the Government of Canada do? What did the
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Cabinet do? They loaned Canada Post $80 million this past year and then they held a press conference to say: "Look at what we have done for Canada Post. They are in a profit situation". It is a new reverse colorization process I would say, like the process that changes black and white films into colour. This action by the Government is reverse colorization. It changes from red to black.
Some people launder money. Canada Post has Lan-derized it. Donald Lander in proposing this financial statement to the House of Commons has displayed the effects of Landerization.
The other reason why I decided to participate in this debate is because there is a demonstration on Parliament Hill today. People have come a long way. They have come all the way from Prince Edward Island in buses to demonstrate on the Hill about the closure of an armed forces base in Prince Edward Island. It is the only armed forces base there. It is the most important base in eastern Canada because it is the home of the search and rescue squadron. It is strategically located right in the middle of Atlantic Canada. For the last two or three years we have been asking the Government to base the interceptor squadron there because we have noticed over the last two or three years that all of the interceptions that take place off the East Coast of Canada today are done by the Americans. Oh, yes, the F-14s, from the State of Maine do the interceptions off the Canadian coast of the Russian aircraft which frequently test our defence system. We were saying that that is where the interceptors should be based. Then along comes the Conservative Government after having promised during the election campaign everything that Prince Edward Island wanted. It was even going to build a bridge, a causeway to Prince Edward Island, or a tunnel, or anything. It would spend loads of money. Yet after the election campaign what did the Government do?
The only presence by the Department of National Defence in the entire Province of P.E.I. was its base a Summerside, a major employer in P.E.I. It is the home base of search and rescue. The Government has closed the entire base.
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During the election campaign and just prior to it we saw the Government spend money like it was growing on trees. The Atlantic Canada Opportunities Agency, which should be renamed the Atlantic Canada Overblown Agency, spent half is entire five-year budget in six months. There was no problem with money for the Government at that time. ACOA was designed to give grants to small business. It replaced DREE, which had become a dream, and DRIE which had dried up.
ACOA had no problem getting money for small business at that time. The Irving group of companies received lots of business under the small business provisions, as did the Wandlyn hotel chain.
When I read the list of grants recently, I noticed that one outfit received money to investigate the establishment of breweries throughout Atlantic Canada. Is the solution that we all get drunk and forget our problems by establishing breweries in Atlantic Canada? There was no problem with money six months prior to the federal election campaign.
Now the money has dried up. The Government has changed ACOA completely so that money is no longer available in Atlantic Canada.
After it was elected, the Government announced its intention to introduce its new sales tax to raise more money so that it will not need as much borrowing authority in the forms of Bills before the House. The Government has tailored its tax on the system that is in effect in New Zealand, a country which, if dropped in the middle of one our bigger provinces, would require search and rescue in order to find it. Our situations are not at all the same.
What are its effects on Atlantic Canada? The people of Prince Edward Island presently pay 10 per cent sales tax to which will be added another 9 per cent. However, it is not as simple as becoming a 19 per cent tax because the 9 per cent federal tax is applied to each item and the 10 per cent sales tax is applied on top of that.
For example, in its Budget the Government increased the cost of long distance telephone calls. The federal tax is added to the long distance telephone charges so that if there is a $100 telephone charge a 9 per cent tax makes it $109.

June 19, 1989
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An Hon. Member:: Very good.


George Baker: I hope the hon. gentleman is listening because he sure did not understand it when he voted for the BUI.
The sales tax is 10 per cent in Prince Edward Island, 10 per cent in Nova Scotia, 11 per cent in New Brunswick, and 12 per cent in Newfoundland. Those who live in Prince Edward Island and Nova Scotia wUl have their 10 per cent sales tax added to that $109, whUe it is 11 per cent in New Brunswick and 12 per cent in Newfoundland. The result is over 20 per cent in sales tax at the retaU level for people in Atlantic Canada because of the new sales tax being introduced by the Government.
This is further complicated by the fact the Government, in using the New Zealand example, did not take into account the geography of our country. Goods that are made in one part of Canada and shipped to another part are taxed at various stages so that those at the far end of the country pay more federal tax than those living next to the manufacturing industry. Not only do Atlantic Canadians pay a higher percentage in tax at the retaU level, they pay a greater percentage of the amount of federal taxes that are collected per capita. That is not good enough.
The federal Government has also stated that it will cut back portions of VIA RaU. Again, it is affecting Atlantic Canada. The Government should come out with the truth on the matter. It is not just eliminating portions of the raU line that it claims are not profitable.
When Mr. Lawless appeared before the committee last week, it was rather sneaky for VIA not to admit that it had just given lay-off notices to the red caps who work at the train station here in Ottawa. They are the people who handle baggage and so on. Those lay-off notices were being issued as Mr. Lawless was getting off the train to come to the Standing Committee. Perhaps it was coincidental, but the message is that VIA Rail and the Government of Canada are no longer interested in travellers who cany baggage. It is only interested in businessmen who travel short distances for an hour or two and to heck with everybody else. By removing the red caps, the Government is removing a service from a
mother travelling with her children, from senior citizens and from disabled. The Government has absolutely no interest in the people who take the train because they cannot afford to fly, or find it more convenient to take the train. It may even be the only way for them to travel.
The Government is more interested in international relations with France, the Soviet Union, Poland, East Germany, Cuba, Japan, Sweden, Norway and the Faro Islands.
Those countries are being issued licences this month to fish within our 200-mile zone while Canadian fish plants are closing. The Government of Canada is more interested in making sure that the Government of the Soviet Union is allocated over 100 factory freezer trawler licences.
Some say that countries which come to Canada and are issued licences by this Government do not bring their fish back to their countries. Is that a fallacy? Every Communist Government today that fishes off the east and west coasts of Canada sells its product to the United States. I defy anybody to show me one factory freezer trawler load that was brought to its own country and distributed to its own people.
The other day I watched a factory freezer trawler from Poland. It caught grey sole and turbot and, lo and behold, it ended up on the Boston market. How did it end up on the Boston market? It is interesting because some of it was direct, but the rest of it was through established Canadian companies that sell into the market.
While we have fish plants that are currently closing in Canada and people being laid off, in December of this year we will have the biggest lay-off in Canadian fishing history. The Government of Canada is about to announce the biggest quota cut for next year that we have ever seen.
There is a group that is not affected, that is, the 260 factory freezer trawlers from foreign countries that fish around our shore. That group of people did not take a cut. They took an increase. Why did they take an increase?
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There are various reasons. Of course, we gave it to them. One was a boundary dispute with St. Pierre and Michelon, with the Government of France. We turned around and said: "If you come to the bargaining table, for four years we are going to give you extra quotas. You can go down into southwest Nova Scotia and everywhere they are closing fish plants and you can fish codfish. You can go up to Cape Breton Island and fish codfish. You can go to Prince Edward Island and fish codfish. You can go off the coast of Quebec in the Gulf of St. Lawrence and fish codfish". While our companies are closing, while people are being laid off, the Government of Canada says that international relations with foreign countries are more important than the jobs in our own country.
That is the philosophy of the Government of Canada. It is absolutely obsessed with this business of deficit reduction, to the extent that it is overshadowing everything else. One Department does not know what other Departments are doing.
The other day the Department of National Revenue sent a notice to a federal Crown corporation, CN Marine, and said: "Look, if you use the Bluenose", which is a very famous vessel, "any more this year, we are going to have to impound it because you owe us under our new policy a quarter of a million dollars in Customs duties". That is how far it has gone.
The Government of Canada has passed new rules and regulations for ships that come into Canadian ports. This will mean, by the way, that the tourist trade via large ships into the west and east coasts of Canada will virtually come to an end. The Government did not consult with all relevant Departments about what ships would in fact be passing from this country to another country and would violate those rules and regulations it brought in.
When we add it all up, in this borrowing authority for which the Government is asking today in the House of Commons it is unfortunate that the Government of Canada is currently inflicting real misery upon eastern Canada and the people who live there. There are people who live in Prince Edward Island today and other communities across this country who are losing their jobs because the Government say that those jobs must be lost
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for the sake of its policy. There is one thing for certain: while these people may lose their jobs, there is another group of people who are going to lose their jobs as well. In the next election, this crowd is going to be booted out.


The Acting Speaker (Mr. Paproski):: Questions or comments?


Mr. McCreath:: Mr. Speaker, I listened with great interest as I always do when my hon. friend opposite rises to speak. I am not sure exactly how foreign fishing on the Atlantic coast relates directly to this Bill. Inasmuch as my hon. colleague opposite has raised the issue, it might be appropriate to rectify some of the information he imparted in his enthusiasm which may exceed slightly the realities of the situation, certainly as seen by those who are very close to the fishing industry in Atlantic Canada.
I was amazed to hear him talk about foreign vessels being licensed to fish codfish within our shores. I believe he knows perfectly well that foreign vessels are licensed to fish within our 200-mile zone those species which Canadians are not interested in harvesting and for which there is a by-catch.
The statistics are readily available. I would be glad to provide them to him if he does not have them. The Russian vessels fishing inside our 200-mile zone are allowed a by-catch of 1 per cent as against all the remaining fish caught. Indeed, the statistics for 1988 show that in fact the by-catch taken was less than half of 1 per cent. Perhaps this is his understanding of entitling foreigners to fish within our shores.
He should also be aware that under the agreements of the international law of the sea Canada is required to make available those species not harvested by Canadians.
Second, he speaks of the nose and tail and foreign fishing outside the 200-mile limit. Could he explain to the House what measures can be taken by the Government of Canada to impose its will in international waters where we have no jurisdiction?
The Government has taken action by meeting with the European Community and getting it to agree to sit down in a committee which met last week to come to a peaceful resolution of the problem that exists. That is significant progress.


Mr. Gauthier:: How about a question?

June 19, 1989
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Peter L. McCreath: Third, he mentions the Canada-France agreement. That is not a new situation. That is a situation about which his Government did nothing for many years.


Some Hon. Members:: Question.


Peter L. McCreath: This Government brought the French to the table. This Government got the French to sit down and agree to a resolution of the problem and to recognize the amount of fish they are harvesting. He knows perfectly well that it will be 60 per cent of the amount of fish that they have been catching for years, particularly during the time when his Government was in power.


George Baker: Mr. Speaker, the hon. gentleman is vociferously energetic about this subject because a fish plant in his riding just closed because of a lack of fish. The situation is very desperate in his part of Nova Scotia.
He raised three points. First, he said that codfish were not caught in any great numbers. I believe he said that 1 per cent were caught by the Russians. If he checked, he would find that the Russians are given a quota on his coast in what we call the silver hake box, about 80 miles due east of Halifax. They are given a quota of 58,000 tonnes of silver hake, which is like a large herring. It is good to eat. The Americans caught 20,000 tonnes of it last year and sold it fresh into the U.S. market.


Peter L. McCreath: It is not codfish.


George Baker: It was 58,000 tonnes of silver hake. He is wrong in his percentage. His 1 per cent is correct. The 1 per cent is for haddock. There is 5 per cent for pollack and there is 5 per cent for cod. By any mathematics, if we took 5 per cent of 58,000, we would come up with about
3,000	tonnes. That is for cod. Five per cent of 58,000 tonnes of pollack is another 3,000 metric tons. Then we multiply that by millions of pounds of fish and we see that any seasonal plant on the East Coast of Canada could exist with that amount of cod and pollack. That is written in the licence for the Soviet Union, and that is only one country.
What about Cuba? Cuba has nine factory freezer trawlers in the silver hake box 80 to 90 miles east of Halifax today. They are fishing the same percentages, that is, legally fishing.
There is a law for the foreign vessels in Canada now which says that they do not have to throw away what they catch in excess of what they are allowed to catch. Nova Scotians, Newfoundlanders, New Brunswickers, Prince Edward Islanders, and Quebecers are being dragged into court continually because they have not thrown overboard a fish that they were not licensed to catch. In the Act it says that it is "incidental" catch. While we are being dragged into court, the foreign boats out there have it in their licences that they can keep in excess of what they catch. No only that, France is licensed specifically to catch cod off the coast of Nova Scotia.
I am not talking about the incidental catches. How incidental can you get, Mr. Speaker? The Russians have
3,000	metric tons of cod. How much do the Japanese have? How much do the Cubans have? How much do the East Germans have? How much do the Faro Islanders have? How much do the Poles have? The Poles catch grey sole. Mr. Speaker, when you go into a restaurant and order sole, it is grey sole. Poland owns its own vessels. The Polish people come over and are given an allocation of that off the East Coast of Canada.
The hon. gentleman then went on to say that we must give by international agreement fish in excess of Canada's needs. Here is where we have a problem. There is no fish in excess of Canada's needs today. There is not one. They call them "underutilized species". The only underutilized species on the East Coast of Canada are fish plant workers and fishermen. They are becoming an endangered species under the Government.


Mr. Taylor:: Mr. Speaker, I have just a brief question for the Hon. Member from Gander who speaks so eloquently about a number of issues.
He started his remarks today with reference to Canada Post and the so-called $96 million profit announced by Canada Post late last week. The Hon. Member talked about the misrepresentation of that profit. We are also
June 19, 1989

hearing this week about misrepresentation of individual community leaders' views on the matter of small rural post offices and the support for Canada Post's new system.
Can the Hon. Member from Gander tell us a little bit about what he is hearing from the real people about the smaller post offices in his constituency?


George Baker: Mr. Speaker, the only thing I am hearing about the smaller post offices in Newfoundland is that they are closing. The only thing we are hearing from the smaller rural post offices in Canada today is that they are closing. They will be replaced by a box in the snow. Imagine getting up on mail day and having to go out and dig your way down to your mail. That is real service, isn't it, Mr. Speaker? That is real service!
Not only that, but a great many communities are even losing that and people will have to go to the next community to receive their mail. Even in the larger communities up here in Ontario that is happening. Now one usually goes into a pharmacy or drug store to pick up one's mail. I can imagine going to the counter to get your mail and the clerk saying: "Just a minute now. I have to serve that fellow over there who wants some toothpaste and other items". That is the level to which service has deteriorated in Canada today. We need a change all right. To restore delivery in Canada we need a change of government.


Some Hon. Members:: Hear, hear!


Victor Fredrich (Vic) Althouse: Mr. Speaker, I am rising today to debate the proposed borrowing authority which the Government has put before the House. As the House will know, this comes about because the Government projects a fairly large deficit again, in the area of $30 billion again this year.
The Government has proposed that before the House rises at the end of June it wants to have the authority to borrow up to $24.8 billion in the very predictable event that tax revenue does not come in fast enough to offset the expenditures the Government has committed to make. The Government wants to borrow $24.8 billion with this Bill before us today. This is a very straightforward Bill which includes that and one other clause saying that the Government will have permission to use an unextended borrowing authority to the amount of $3 billion in the next fiscal year.
Therefore, after April 1, 1990, instead of having to come to the House immediately for extra borrowing
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authority, it will have $3 billion granted by the House today to spend in the next fiscal year. This policy is induced by the deficit which is being predicted for the coming year in the neighbourhood of $30 billion.
We have come a long way since the end of World War II. I am not sure that it has all been progress, but the goods and services available to the people of this country have probably come about because of technical progress around the world. However, as a country Canada is having some difficulty keeping up. I remind the House that after World War II we were the fourth ranking industrial nation in the world. Only the United States, the United Kingdom, and the U.S.S.R. rated higher than Canada right after World War II in terms of industrial output.


The Acting Speaker (Mr. Paproski):: Order. Would the Member for Winnipeg-St. James please sit.


Victor Fredrich (Vic) Althouse: Thank you, Mr. Speaker. As I was saying, after World War II Canada was the fourth ranking industrial power in the world, and we are now either twenty-fifth or twenty-sixth, depending upon which ranking one uses. Our influence and power in the world have shrunk considerably and at a very rapid rate.
At the same time we have had some difficulties deciding how we are going to operate our country. For the past eight or nine years we have been shifting to a user pay deregulation mode and have been following an economic philosophy which is probably monetarist in view, following some of the teachings of Milton Friedman and others. This was started by the Liberals and carried on with a vengeance by this Conservative administration which likes to talk a lot about problems it is having with the deficit.
It does have a problem with the deficit. When it came to power it had an accumulated deficit inherited from previous Liberal and Conservative Governments of about $150 billion to $160 billion. It has handled that very well in the five years since then, to the point that the deficit accumulation now ranks somewhere between $320 billion and $350 billion.
In other words, it has more than doubled in approximately four and a half years. This makes a lot of people concerned not just about the deficit but about this Government's ability to operate anything, let alone the Government of this country.

June 19, 1989
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We have been hearing that the way out of this deficit will be to cut expenditures. That seems to be the one-eyed view of this Government to handle the deficit situation. Anybody outside of the Government knows that there are two levers which can be used to handle deficits, whether we are running our own finances, operating a business, or operating a Government. We can cut expenditures, yes, but we also have to find out where to get more money if we are having a deficit problem.
The Government made some bad decisions in deciding where it is going to get more money and where it is going to make the cuts. The result has been that not only does the deficit stay approximately where it is and worsens year by year, but it has not been good for the economy.
Previous to the monetarist view of the world, we had a Keynesian view which attempted to show quite conclusively that by handling spending correctly it was possible for government expenditures in fact to increase the economy and make everyone better off. It is all a question of where we put those expenditures and what we do with the money collected from all of us as a collectivity. We have a political problem but it has created a very large economic problem.
The strategy of this and previous federal Governments has been to involve themselves more with large corporate enterprises and to provide assistance to the very large economic entities which exist in this world. We have heard in previous speeches how grants to big corporate business have risen from less than 1 per cent of our Gross National Product in the 1970s to over 2.5 per cent of Gross National Product in the mid-1980s. We do not have any current statistics to the late 1980s, where we are right now, but I would think that it is probably growing even faster at this point.
The Canadian Federation of Independent Business represents the small businesses with which most of us in outlying rural ridings deal when we talk to business, It has called on the elimination of these big grants to big business which it estimates run at about $8.9 billion in last year's Budget.
Just the elimination of those kind of grants would reduce the deficit by more than $8 billion. There would be some justification in doing that, just from a point of view of fairness and equity. How can the small business in my riding or another riding, whether it is in rural
Saskatchewan or urban Edmonton, compete side by side with its new reinvestment tax dollars which it has generated.After it has paid 20 cents or 30 cents tax on that dollar, it only has 70-cent or 80-cent dollars for reinvestment purposes.
We are asking small businesses, in case after case, to go head to head in side by side competition against a large multinational corporation that is investing 100-cent dollars because it has not had to pay any income tax on that money at all. We cannot have fair competition with that kind of a tax system. It is time we had a change.
We have been told by this Government and preceding Liberal Governments that we have to have these kind of tax incentives to big business to encourage investment. What kind of investment are we getting and what are they proposing that we should be encouraging?
We heard in speeches from the Minister of Finance (Mr. Wilson) on down in both Governments, whether it be Liberal or Conservative, that it was to encourage new factories and new institutions that would create new jobs. That sounds all very laudable, but when a tax advantage is applied whether a new business or a new factory is built, or when there is the same tax advantage for taking over an existing one, businesses being by nature conservative and going where they have the sure thing as opposed to some risk, tend to buy each other out. As a consequence in the last decade or so we have had the biggest boom in buy-outs and takeovers that we have seen in our history, all encouraged by the tax system.
This is a tax system which costs the country money, which leads to the deficit, and which causes us to have to come before the House of Commons every year for borrowing authorities that get bigger and bigger. Taxpayers are going to have to pay for it.
If the Government were serious about creating investment, it could use the tax system to achieve that end. Why do we create a tax system which encourages takeover and has a built-in incentive for all participants to create inflationary expectations? Whether it is real estate or the stock market, everybody who is a player knows that if we can just get this stock up or this property up, we will all be slightly better off. Why will we be better off? It is because there will be a nominal value increase. However, we have a tax system which says that on the first $100,000 of capital gain-and these kind of
June 19, 1989



COMMONS DEBATES AFTER RECESS

[Stage Direction]
things are capital gains-we do not have to pay any income tax.
Most of the players in the business world are consciously looking for ways to help each other get the price of certain stocks and certain properties up so that they can all take advantage of the tax-free capital gain and walk out with up to $100,000 in the course of their life-time on which they will not have to pay any income tax at all. Does that encourage investment? I do not think so.
What that type of tax system is doing is encouraging inflation, something which the Minister of Finance has said when he defends high interest rates that he is trying to do away with. He said that he is trying to keep inflation down. How is he trying to do that?It is a little laughable, Mr. Speaker, but he is trying to keep it down with a tax system that encourages the value of stocks, bonds, and properties to go up. He is encouraging inflation with an interest policy that encourages interest rates to go ever and ever up.
That becomes a great cost to the small business people in my riding. It becomes a great cost to the individual taxpayer in my riding and across the country. It is counterproductive to the goals which the Government sets for itself.
In other words, when I am able to complete my remarks after the break I will say that the Government is saying one thing and doing a whole host of other things which will make absolutely certain that its goals cannot be achieved. This application for $24.8 billion worth of borrowing authority gives me an opportunity to point this out to the Government, and I hope that it will take note of it.
May I call it one o'clock and complete my remarks later.
['Mr. Speaker, a sea lamprey is an eel-like parasite that attaches itself to the undersides of fish and kills Lake Superior trout and salmon. Sea lamprey are found in the Great Lakes and at one time were under control, but unfortunately, insufficient funding has caused the sea lamprey to make a resurgence in Lake Superior and the other Great Lakes.\nIn 1987, the Government froze the level of funding for sea lamprey control. A report by provincial, state and tribal agencies of the Great Lakes estimates that the Great Lakes sea lamprey will double, trout and salmon stocks will diminish by 50 per cent, the Great Lakes sport fishing industry will lose $552 million and the commercial fishing industry will lose $135 million. In sum, the economic activity of the Great Lakes region will decline by $1.4 billion annually.\nI urge the Government to alter this course. Increased program and research funding is imperative if we are to save the salmon and lake trout in Lake Superior and the other Great Lakes.', 'June 19, 1989\nOral Questions']
The Acting Speaker (Mr. Paproski):: The Hon. Member for Mackenzie will have eight minutes remaining in debate, plus 10 minutes for questions and comments when we resume after three o'clock.
It being one o'clock, I do now leave the chair until two o'clock later this day.
The House took recess at 1 p.m.
The House resumed at 2 p.m.



Mr. Guy H. Arseneault (Restigouche):: Mr. Speaker, New Brunswick is the only province in Canada not to have its own television station that is entirely owned and operated by the English network of the CBC.
Therefore, New Brunswickers must be satisfied with watching English-language CBC programs on CHSJ in Saint John.
Given the French-English mix of New Brunswick's population and the CBC's mandate to unite all Canadians, it does not seem very fair that this province is denied a network station. In fact, this situation is clearly intolerable.

The establishment of a full CBC station in New Brunswick would permit the province to reap benefits beyond the television service. With complete production facilities in the province and more New Brunswick-made shows produced there, the province's artists, actors, technicians and other professionals would be provided with new opportunities which are now closed to them.
Although the CBC has been the victim of drastic budget cuts, the need for an owned and operated station in New Brunswick still exists. All that is needed is for the federal Government to show the political will to make it a reality.


AIRLINES
Mr. David Bjornson (Selkirk):: Mr. Speaker, on Friday, June 16,1 had the opportunity to represent our Government at the inaugural flight of United Express-Aspen Airways from Denver, Colorado to Grand Forkes, North Dakota to Winnipeg, Manitoba.

June 19, 1989
The role of the Government of Canada in conjunction with the Government of the United States in the approval of the licence for this service is a positive development in the transportation interface between our two countries.
I commend Mr. Don Ringsby and Mr. Don Martins of Aspen Airways for their special efforts in the re-establishment of this program. I would like to congratulate Governor Rommer of Colorado, Governor Sinner of North Dakota and Premier Filmon of Manitoba for their initiative in setting up this regional service.
This licence is not part of the Free Trade Agreement but with the renewal of this air service the business climate between our great countries will no doubt improve even more.


RAILWAYS
Mr. Stan Keyes (Hamilton West):: Mr. Speaker, a very important meeting was held this morning on the future of VIA Rail. The Minister of Transport (Mr. Bouchard) met with the Mayors of Windsor, Toronto, Mississauga, Montreal, Quebec City and, of course, the great city of Hamilton.
The mayors expressed their desire to modernize the Windsor-Quebec corridor with a rapid and potentially profitable service. The Government unfortunately does not see it this way. Cuts to the budget for VIA Rail would likely impact greatly on the development of passenger rail service in the Windsor-Quebec corridor. Commuters will be forced to look for alternatives to train service which would certainly be more costly and damaging to the environment.
For 1988, the number of passengers on the train between Niagara and Toronto was 273,000 people, of which over 33,000 people either got on or off the train at Hamilton. From January 1 to May 31 of this year there were 98,000 passengers on this line. Ridership, Mr. Speaker, is increasing not decreasing. A multi-modal approach makes sense. The solution is to build a highspeed rail network from Windsor to Quebec and ease the congestion of air traffic from Pearson International Airport by incorporating Hamilton Airport.


TOURISM
Mr. Jean-Luc Joncas (Matapedia-Matane):: Mr. Speaker, my constituents, like people in many regions of Canada, have taken charge of their economic future and are doing more and more to make tourism a profitable industry.
Mr. Speaker, I would like to take a few moments to point out two important summer activities in my riding, namely the Matane Shrimp Festival, which will be held from June 24 to July 2, and the Centennial Festivities of Amqui, my home town, which will take place throughout the month of July.
In conclusion, I must pay special tribute to the many volunteers who make these regional events major economic activities in each of our ridings.
This is an invitation to everyone to visit the Gaspe peninsula, one of the most beautiful regions in Quebec!


NATIONAL REVENUE
Victor Fredrich (Vic) Althouse: Mr. Speaker, prairie farmers who traded used farm machinery in the early 1980s to buy new equipment are still being harassed by Revenue Canada over investment tax credits and the value of trade-ins.
Last year the Department agreed to pay the field cost of a Saskatchewan farmer which would serve as a test case for the rest. We have heard that the case is pretty slanted in favour of the Department but that is another matter. The producer has since dropped his appeal. The Minister recently stated that his Department was looking for another test case. Meanwhile, Saskatoon officials of Revenue Canada have other instructions and have begun to send farmers notices of assessment.
An accountant who offered three of his clients as potential test cases was turned down with no reason given. In fact, the official said she did not care what the
June 19, 1989

Minister said in the House, Revenue Canada was going to go ahead with the assessments anyway.
Will the Minister keep his word and find another test case? Or is he afraid that the courts will rule in the producer's favour and thus stop his Department's harassment of farmers who followed Revenue Canada's rules only to find them being changed later on in the game.


LIBERAL PARTY OF CANADA
Mr. Rene Soetens (Ontario):: Mr. Speaker, on November 21 the citizens of Canada spoke with foresight and clearly indicated they would not allow the Liberal Party of Canada to govern this countiy. In hindsight it was a very wise decision. The Liberal Party is a party bereft of policy and money and now a leader.
The Liberals rightfully planned a convention in Calgary to tiy to establish a policy with which the Party and maybe Canada could live. Well, they could not even let that, decision stand. The Liberal Party does not have any money so it decided to seek an arrangement with a major bank so that the Liberals could charge their expenses on Visa. Just like they ran the country, they have no idea how they are going to pay their bills.
Now, Mr. Speaker, the Liberal Party has announced the longest leadership campaign in their history, a campaign the Liberals want the taxpayers to pay for. For over a year this band of opposition critics bereft of policy and money will be leaderless. Can they really wait until June of 1990 to bring this group together, united under one leader who will lead a party that will still have no policy?


THE ENVIRONMENT
Ms. Sheila Copps (Hamilton East):: Mr. Speaker, speaking of policy, the policies of this Conservative Government are strangling the Canadian environment. I would like to refer to a specific report which was published today by Greenpeace which is a damning indictment of the Government's so-called commitment to the Montreal protocol.

The Montreal Protocol was signed by our Government as a sign of our interest in the environment, but in 10 days, the Minister himself will not have the ability to proceed with this protocol because he has not established regulations concerning CFCs.

We have a situation in this country where 25,000 refrigerators are currently being drained of CFCs. In total there are one million refrigerators between Canada and the United States. Those CFCs are not being recaptured. They are leaking right into the environment and they are going to affect the air we breathe, the drought situation in the prairie provinces and the very quality of life that Canadians hold dear. So it is fine for the Minister to sign the Montreal protocol but when he tables legislation this week, we ask him to do something about CFCs and used refrigerator appliances because otherwise all of his talk and all of his government policy is nothing more than smoke and mirrors as was stated in the Greenpeace study.


Mr. Speaker:: The Hon. Member's time has expired.


CULTURE
Mr. Jean-Guy Guilbault (Drummond):: Mr. Speaker, I want to invite all Hon. Members and all Canadians to come to the riding of Drummond and the Eighth World Folklore Festival, which will be held from July 7 to July 16. This year's theme is "The Wedding", and more than 30 folk dance groups from 22 countries will be at the festival, reflecting the folk culture of many different peoples during ten days of music, dance, singing, and a host of interesting activities.

More than 1,500 dancers from Canada, United States, France, Brazil and from countries as far as China, Thailand, Turkey and Russia will exchange by their folklore, one of the oldest and marvellous traditions of the wedding; the dance.

June 19, 1989

Last year, the Festival, which was named "tourist event of the year" in Quebec, received about 700,000 visitors. This year's festival will be another glorious wedding of music, song and dance from many nations.

An event you will not want to miss is the Festival Mondial of Folklore of Drummondville from July 7 to July 16, Mr. Speaker. Bienvenue a tous.


THE ENVIRONMENT
Mr. Guy St-Julien (Abitibi):: Mr. Speaker, according to a recent Gallup poll, almost all Canadians or approximately 97 per cent of the adult population say they are aware of the dangers of pollution. Almost three-quarters of Canadians in this age group believe that pollution is a very serious problem. In 1987, only 67 per cent of respondents shared that view. In Quebec, where the proportion of affirmative answers was the highest, four people out of five, or 81 per cent, said that their province was affected by pollution.
Mr. Speaker, the general response shows that Canadians have become increasingly aware of the dangers of pollution and that times have indeed changed. The trend indicated by this poll shows that the concern of Canadians for environmental issues has increased during the past ten years.


NATIONAL DEFENCE
Mr. Robert E. Skelly (Comox-Alberni):: Mr. Speaker, the Chippewa of Kettle and Stoney Point on Lake Huron have a 47-year grievance with the Department of National Defence. During the last war, the Government took over 2,000 acres of their land at Stoney Point for military purposes. Native families were forced to move but were told that they could have their land back after the war when the land was no longer needed for military purposes.
This reserve land is now used as a summer camp for cadets and no longer serves any regular military functions. However, the beautiful beach-front land is being much appreciated by military officers as a private summer camp for their families.
The Chippewa want to build houses for their people and to develop, the beach-front property so they can create jobs for the community. I call upon the Minister of National Defence (Mr. McKnight) to do the right thing, to close Camp Ipperwash, return the land to the Stoney Point people and relocate the cadet camp to another military base where it is wanted.


CANADA POST CORPORATION
Mr. Jesse Flis (Parkdale-High Park):: Mr. Speaker, while the Government has been trimming and cutting and destroying the fabric of Canada Post to make a profit, Canadians have had to endure poorer and poorer service. In my riding of Parkdale-High Park, Canada Post, by threatening to close Postal Station V located at 25 Ritchie Street, has forced the residents, many of whom are elderly, to have to go four or five kilometres to get a simple registered letter or to mail a package.
Owners of small businesses that are located in the area because of mail service at Postal Station V will now have to take time from the workday to go all the way to Postal Station M to pick up a package or send a Priority Post letter. These small businesses are being attacked from all sides by this Government with respect to taxes and operating costs. Now they do not even get the mail service they need to do business.
Surely the Government has a duty and a responsibility to all Canadians to ensure the smooth running of our essential services, one of which is Canada Post. I call upon the Minister to reverse his decision and to keep Postal Station V open.


THE ENVIRONMENT
Mr. Bill Attewell (Markham):: Mr. Speaker, recently U.S. President George Bush agreed to take long-awaited measures to drastically cut carbon emissions that have been causing serious cross-border pollutants. I commend President Bush on his historic initiative, but I would caution that more drastic measures must be taken
June 19, 1989

to control the high acid rain emissions currently being recorded.
Strong support for more action has recently come from U.S. Senator A1 Gore. Speaking in Halifax, Senator Gore admitted that the mood in his country had changed, warranting bolder action. He is looking for President Bush's measures on acid rain to be strengthened by Congress. It is very encouraging to know that the acid rain problem has finally become a major concern, not only in Canada but in the United States as well.


GOVERNMENT ADVERTISING
Joy Langan: Mr. Speaker, the Tory Government is morally bankrupt and no amount of tinkering can change that. The Government is paying a consultant $600 every day to help sell the sales tax. The consultant says it may be immoral but it works. I say that it is immoral.
The Government allows tax deductions for those corporations or businesses that advertised for the Government on the trade deal but not for those businesses which advertised against the trade deal. That is immoral.
Three times the Government promised improvements in child care. It introduced a Bill that reduced the number of spaces, promised it again in the election but did not provide for any reasonable improvement in the Budget. That is immoral.
The Government promised to expand and improve VIA Rail and has now announced cuts to public transport. That is immoral.
The Government attacked pensioners not once but twice. That is immoral. It is a tragedy for Canadians that the Government's continuous acts of immorality add up to total moral bankruptcy.


FISHERIES
Peter L. McCreath: Mr. Speaker, some confusion exists as to the scope and mandate of the
special committee of Cabinet announced recently under the chairmanship of the Right Hon. Secretary of State for External Affairs (Mr. Clark) to review implications of the apparent diminution of the northern cod stocks.
For several months now, it has been readily apparent that coastal regions of the Maritimes face serious difficulties as a result of the diminution of groundfish stocks on the Scotia-Fundy region. Nova Scotians in particular will be further hard hit if current forecasts of northern cod stocks prove to be correct inasmuch as 30 per cent of those stocks are harvested by Nova Scotian vessels including vessels from Lunenburg and Liverpool.
Accordingly, I urge the Government to clearly indicate the process that is in place to respond to these very serious and urgent needs throughout maritime coastal areas.



Mr. Joe Comuzzi (Thunder Bay-Nipigon):: Mr. Speaker, a sea lamprey is an eel-like parasite that attaches itself to the undersides of fish and kills Lake Superior trout and salmon. Sea lamprey are found in the Great Lakes and at one time were under control, but unfortunately, insufficient funding has caused the sea lamprey to make a resurgence in Lake Superior and the other Great Lakes.
In 1987, the Government froze the level of funding for sea lamprey control. A report by provincial, state and tribal agencies of the Great Lakes estimates that the Great Lakes sea lamprey will double, trout and salmon stocks will diminish by 50 per cent, the Great Lakes sport fishing industry will lose $552 million and the commercial fishing industry will lose $135 million. In sum, the economic activity of the Great Lakes region will decline by $1.4 billion annually.
I urge the Government to alter this course. Increased program and research funding is imperative if we are to save the salmon and lake trout in Lake Superior and the other Great Lakes.

June 19, 1989
Oral Questions



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, my question is for the Acting Prime Minister. There are two groups of Canadians in Ottawa today to protest two of the Government's decisions linked to the Budget cuts, decisions to destroy the fabric of our country. Mayors from Ontario and Quebec are protesting the cut-backs in VIA Rail service and a grassroots group of people from Summerside, Prince Edward Island is protesting the closure of the armed forces base on the Island.
The Acting Prime Minister will know that this country is held together over vast distances by a framework we have developed as a nation for over 100 years. The country is held together by policies that treat all regions of Canada equally. The Government is tearing that fabric apart.
What did the Prime Minister mean when he campaigned in Summerside, Prince Edward Island, just a few months ago and said on October 15, "In the future, Canada will be doing more, not less for all of you"? How can the decision to close down the Summerside base gibe with the promise made by the Prime Minister of Canada two weeks before the election? What answer does the Acting Prime Minister have for the hundreds of people who have come to protest today on Parliament Hill against the closure of the base?


Hon. Barbara McDougall (Minister of Employment and Immigration):: Mr. Speaker, I think it is important to note first that no one on this side of the House takes profound changes and disruptions in the economy lightly. The policies that we have put in place over the past four and a half years have led to economic growth in every region of Canada.
Having said that, I can say that from time to time there are particular problems. We recognize there is one now in Summerside. We will be working with the community and with the province to ensure that programs are
available that will help economic development of that region in the future.


PROMISE OF PRIME MINISTER
John Napier Turner: Mr. Speaker, I in no way want to denigrate the versatility of the Minister. However, the question was put to the Acting Prime Minister because it concerns a promise made by the Prime Minister of Canada to the people of Summerside and it involves an issue of national fairness.
We can build this country together only if we treat all regions fairly. We can build this country together only if essential services are provided to all citizens. We can build this country together only if the federal Government's decisions make sense to all Canadians.
How does the decision to close the Summerside base make any sense when we need aerial surveillance to police off-shore fishing on the Atlantic coast and we need search and rescue services for the fishermen? Obviously, the closure of that base devastates the economy of Prince Edward Island.


Barbara Jean McDougall: Mr. Speaker, my colleague, the Minister of National Defence, has stated in the House that officials in his Department did consider alternative military uses for Summerside.
However, it did not provide an answer in terms of operational savings to the Department of Defence or in terms of the operations of the defence policy of the Government. That does not mean to say that we do not have a concern for the community. They are two quite different issues.
As a Government we will be working with ACOA which, up until now, has found business opportunities for other areas in Prince Edward Island and throughout the Atlantic, and with the types of programs that we can put in place to help build a more solid future for the people of that community.


John Napier Turner: The people of Summerside who are here today have come a long way for an empty answer that promises them no hope for the future.


RAIL TRANSPORTATION
John Napier Turner: Mr. Speaker, instead of destroying what made this country great, we should provide positive support. We should promote and improve on the policies that have contributed to the unity of this country. If we accept that, why should VIA Rail be shut down? Does it make sense to cut passenger services between Quebec City and Windsor, in the corridor between Ontario and Quebec, while everybody knows that passenger trains replace cars which pollute a lot more, and that trains enable Canadians to avoid our overcrowded airports and highways?


Hon. Benoit Bouchard (Minister of Transport):: Mr. Speaker, this morning, I met the mayors from the Quebec City-Montreal-Toronto-Ottawa-Windsor-Ha-milton-Mississauga corridor. They took a very cohesive stand on VIA Rail services. However, I repeat what I have already said many times to the Right Hon. Leader of the Opposition, which is that nothing has yet been submitted by VIA Rail to me, nothing that says absolutely, once and for all, that we are going to shut down a route between Quebec City and Windsor. It might happen, and that is what I told the mayors this morning. Once again, I feel that it makes sense to have acted the way we did in terms of the resources that are available. We can talk about the VIA Rail issue forever without facing the financial truth, but it won't go away!
I repeat, we cannot afford to invest the kind of money we have invested in the past in a service that is hardly being used. On the other hand, it would be an undue assumption to say today that we are going to shut down any route at all. I repeat, it is quite possible, but I think it only makes sense to wait and see what happens about two weeks from now when I receive the report. At that time, the Government will make the appropriate decisions within a reasonable time frame.
Oral Questions


NATIONAL DEFENCE
Mr. Joe McGuire (Egmont):: Mr. Speaker, maybe I will have better luck with the Minister of National Defence.
The Minister and his colleagues have had some weeks now to absorb the contents of the Premier's task force report on the closure of CFB Summerside. Today, he had the opportunity to witness the real depth of concern that Islanders have when they came to Ottawa, at their own expense, to demonstrate on Parliament Hill.
Now that the real facts are in the possession of the Minister and he knows the horrendous impact the closure will have on Prince County and on the province, has the Minister decided that the price is too high for Prince Edward Island to pay, and if not, why not?


Hon. Bill McKnight (Minister of National Defence):: Mr. Speaker, as I have explained to the House, the decision was made because of the economic realities of today that face Canada and this Department particularly. That decision, as other decisions in the Budget, will stand.
The Minister of Employment and Immigration, other colleagues, and myself have had the opportunity to meet people from Prince Edward Island and have stated that we will work with them. We would also appreciate the opportunity to work with the Premier of the province. The province could work with us in putting forward a real economic base, not a base for the economy that is based on something that is not necessary, either from an operational point of view or from any other point of view other than to create activity when it happens to be the Department of National Defence. We have offered, and will continue to work with the province and the people affected in that community.


REQUEST THAT BASE REMAIN OPEN
Joseph Blair (Joe) McGuire: Mr. Speaker, I believe the Premier knows that the entire ACOA budget of $1 billion was more than half spent already in Prince Edward Island or in the Maritimes. There would not be

June 19, 1989
Oral Questions
enough in the original ACOA budget to replace CFB Summerside for any great length of time. That is why the Premier, and Members on this side of the House, are fighting to keep that base open, because nothing else can replace it.


Some Hon. Members:: Hear, hear!


Joseph Blair (Joe) McGuire: A prominent citizen of Summerside has stated: "The Government has placed the greatest burden of the deficit battle on a small community in a poor to marginal region far from Ottawa." He goes on to say: "This is not a base of guns and bombs, but a centre for search and rescue and maritime coastal fisheries surveillance. What logic," he asks, "would close such a centre in Summerside when our waters are even more congested and our fisheries ravaged and endangered?"
Could the Minister answer that question?


William Hunter (Bill) McKnight: Mr. Speaker, I have answered that question. There is no military operational need to maintain that base.
The other part of the Member's question regarding search and rescue was identified on budget day, and that is still the policy and the direction that we are prepared to take.


Sheila Maureen Copps: What is that supposed to mean?


William Hunter (Bill) McKnight: The Premier's task force itself has identified that Canadian Forces Base Summerside does not have any military need. It is there for an economic rationale. This Department does not have that responsibility. We are prepared to work as a Government, as other Ministers have stated, through meetings and discussions we have had. I have had meetings with the mayor-


Sheila Maureen Copps: Buck-passer.


William Hunter (Bill) McKnight: Apparently the Hon. Member for Hamilton East is not interested in this. I know that her colleague is, and I am.
I have met with the Mayor of Summerside. I have met with the President of the Chamber of Commerce from Summerside. My officials have met with other representatives of the province and the community, and we will continue to do so.
We have two needs. There is a need for military operational efficiency, which is not located in Canadian
Forces Base Summerside, and we have a need for over $1 billion of savings that are made by eliminating that non-military operation in Summerside.


REQUEST FOR TABLING OF ECONOMIC AND SOCIAL IMPACT STUDY
Mr. Derek Blackburn (Brant):: Mr. Speaker, my question is on the same subject, and it is also for the Acting Prime Minister.
No Government would deliberately and knowingly shut down the base at Summerside, thus withdrawing $60 million a year from the local economy, and that is also the provincial economy, without having done a thorough and exhaustive economic and social impact study.
I want to know the nature of the study that was done, obviously by the Cabinet before the decision was taken. I would like the Acting Prime Minister to table that study in order that we can all see it, particularly the people of Summerside.


Barbara Jean McDougall: Mr. Speaker, my colleague the Minister of Finance would probably be happy to provide whatever information the Hon. Member needs.
What is important for us to do now is work with the people of Summerside and with the province in terms of building toward the future of Summerside, and the future of Prince Edward Island. That is what the Government is concentrating on, and I am working with my colleagues on that very thing.


BROADENING OF ACTIVITIES AT BASE
Derek Nigel Ernest Blackburn: Mr. Speaker, obviously the Government did not do that study and it is hedging on it and running away from it now.
My supplementary question is directed to the Minister of Defence. On May 23 I put some questions to him in the House with respect to broadening the activities into para-military or soft- military surveillance of eastern Canada. It has already been mentioned today that those activities and demands for activities are on the increase.
In his answer he stated that he would get together with his colleagues in Cabinet to discuss the feasibility of that suggestion. I would like to now find out what the response was from those Ministers, and what the results were from those discussions.
June 19, 1989


William Hunter (Bill) McKnight: Mr. Speaker, the Hon. Member knows as well as I do that the closure of that base was for economic reasons. As the Hon. Member knows, there is a tracker-


Derek Nigel Ernest Blackburn: No impact study has been done.


William Hunter (Bill) McKnight: Yes, Mr. Speaker, I can read to the Hon. Member verbatim, if he wishes, a study done by my Department.


Some Hon. Members:: Thble it.


William Hunter (Bill) McKnight: I can certainly table it. Would that be better?


Some Hon. Members:: Hear, hear!


William Hunter (Bill) McKnight: It is the same information that was given out on budget night. I am sure the Hon. Member has read it. However, if he wishes to have it again I will make it available.
The Hon. Member suggests that we should continue to do more with less. The Hon. Member knows we cannot. To re-engine the trackers would cost $331 million. That is just to re-engine aircraft which came off Canada's last carrier, the Bonaventure. They are 30 years old.
Because we have to make these savings he is asking that we replace them. We will have discussions among colleagues to see what can be done. However, the Hon. Member has to understand that we cannot do more with less. This Department has $2.74 billion less in this five-year planning period.


GOVERNMENT RESPONSE
Derek Nigel Ernest Blackburn: Mr. Speaker, my final supplementary question is addressed to the Acting Prime Minister.
We understand that today the Prime Minister is in Atlantic Canada. He is meeting with the only Tory Premier of Atlantic Canada in Halifax.
Why is he not meeting with Premier Ghiz of Prince Edward Island on the Summerside crisis? That is where he should be today, not in Halifax.


Some Hon. Members:: Hear, hear!


Right Hon. Joe Clark (Secretary of State for External Affairs):: Mr. Speaker, just to keep the record straight, the implication was that the Prime Minister has not met recently with other Atlantic province Premiers. He met
Oral Questions
with Premier McKenna of New Brunswick when they were both participating at the Francophone Summit.
The Government of Canada is prepared, Ministers have met, and officials are prepared to deal with representatives of Summerside, including the Premier, to discuss alternative uses that might be made of the base. However, the decision is clear and should be understood as clear. That base closure decision has been taken. It will stand. As my colleague, the Minister of Employment and Immigration said, the challenge right now is to work together to find alternatives.


PRESENCE IN GALLERY OF MINISTER OF JUSTICE FOR AUSTRALIA
Mr. Speaker:: I wish to draw to the attention of Hon. Members the presence in our gallery today of the Hon. Senator Michael Tate, Minister of Justice for Australia.


Some Hon. Members:: Hear, hear!


NATIONAL DEFENCE
Ms. Catherine Callbeck (Malpeque):: Mr. Speaker, my question is for the Minister of National Defence. Since the Government announced that it was closing CFB Summerside we Island MPs have tried time and time again to impress upon the Government the disastrous economic and social impact that this decision will have on the Province of Prince Edward Island. They are all to no avail.
Today, hundreds of angry and disappointed Islanders marched on Parliament Hill to register their opposition to this decision.
Will the Minister do the honourable thing today and take this opportunity to announce that CFB Summerside will remain open?


William Hunter (Bill) McKnight: Mr. Speaker, once again I have to inform the Hon. Member that, no, I cannot make her happy today.
I can ask the Hon. Member if she and her colleagues on the other side of the House will work with the Government to bring about substantial economic activity and benefits that would be long-term and based on a real need, not a false premise that the Department of

June 19, 1989
Oral Questions
National Defence has an economic responsibility when it has a responsibility for the national security of Canada.


Catherine S. Callbeck: Certainly we are prepared to work with the Government. However, we want this base to remain open.


MINISTER'S POSITION
Catherine S. Callbeck: Mr. Speaker, I have been listening very carefully to the Minister. He has not yet answered the essential question of fairness.
Is it fair to close the only Armed Forces base in Prince Edward Island? Is it fair to leave Prince Edward Island the only province without a base?


William Hunter (Bill) McKnight: Mr. Speaker, what is fair is that the Government has taken an action through its Budget to bring economic well-being to Canada. Through that activity there was a reduction in the DND budget.
The Hon. Member is speaking as if Prince Edward Island, with its size, is isolated from the military activities of Canada. The Hon. Member knows better than that. It is not as isolated as areas in the Province of Saskatchewan. It is not as isolated as areas in the Northwest Territories, as she can ask her colleague to her right. It is not as isolated as other areas in Canada are from military activity or that security which is provided by military activity.


CLOSURE OF CFB PORTAGE LA PRAIRIE
Mr. John Harvard (Winnipeg-St. James):: Mr. Speaker, my question is also for the Minister of National Defence.
It has been almost two months since the Government announced plans to close CFB Portage. In that time the Minister has heard numerous forceful arguments about why the base should be saved and to what alternatives the base could be put. Despite this the Minister has not brought forward any game plan, nor has he even visited Portage la Prairie.
Will the Minister end the uncertainty today and announce what decisions, if any, have been taken in the last several weeks with respect to the future of CFB Portage?


William Hunter (Bill) McKnight: Mr. Speaker, I know that the Hon. Member has an occasional interest in the well-being of the people of Portage. However, we have been working with the Member of Parliament who represents Portage and has come forward with several alternatives which he has been exploring with the support of the Government.


Some Hon. Members:: Hear, hear!


William Hunter (Bill) McKnight: I can inform the Hon. Member that on budget night we made an announcement that starting in 1992, after we have received proposals and made a decision on preliminary flight training which is now taking place at Portage, such as doing it in co-operation with the Enterprise outside Canada's Forces, we would then make an announcement on the closure of CFB Portage.
I have said that until we receive that information I cannot make an announcement. The time period for receiving that information is 1992.


IMPACT ON HELICOPTER TRAINING
John Harvard: Mr. Speaker, I think we want to hear a detailed account from the Minister and not from the Hon. Member for Portage- Interlake.
My supplementary question is also addressed to the Minister of National Defence.
Helicopter training is one of the major operations of CFB Portage. CFB Portage was chosen as a base for helicopter training, for logistical reasons, weather, topography, and open air space. There is even good reason to believe that CFB Portage is the only base in western Canada that can serve as a helicopter training centre.
Will the end result of the closure of CFB Portage be the loss of helicopter training in western Canada?


William Hunter (Bill) McKnight: Mr. Speaker, I do not want to draw to the Member's attention actions that have been taken in the past. However, the closure of Gimli and the closure of Rivers, which were equally capable of continuing to provide training, were found to be acceptable to previous administrations because there was no military need as identified at that time.
I can assure the Hon. Member that Portage la Prairie is not the only place in Canada where helicopter training
June 19, 1989

can take place. I suggest the Hon. Member talk to the Hon. Member for Kamloops and other Hon. Members from British Columbia. He should talk to Members from other parts of western Canada. Helicopter training can take place in several areas.
>k *	*


VIA RAIL
Iain Francis Angus: Mr. Speaker, my question is for the Minister of Transport. This morning the Minister rejected a request from mayors along the Windsor-Quebec corridor to protect the existing levels of passenger rail service.
Given the fact that VIA raises through passenger revenues 67 per cent to 74 per cent of its costs along the corridor, using extremely old and expensive equipment, while the best Amtrak in the United States can do is 69 per cent over the total system, will the Minister go back to Cabinet and demand the necessary funds to continue VIA's operation and to acquire new equipment so that it can make a buck?


Benoît Bouchard: Mr. Speaker, the Hon. Member knows very well what I will say. I do not know what has been said to him, but this morning the mayors presented some requests in terms of the status quo, and particularly in terms of consultation. I said that I will make a decision which will be communicated to the mayors of the corridor.
My hon. friend knows very well that I will not make a decision before VIA Rail presents its corporate plan within which we will have some proposals. I will not deal with the corridor without keeping in mind that I have to deal also with all other routes in the country. I cannot make a decision between Windsor and Quebec without keeping in mind that there are many other places in Canada.


Iain Francis Angus: Mr. Speaker, he made a decision by deciding correctly to protect the nine routes that are served only by VIA


POSITION OF MINISTER
Iain Francis Angus: Mr. Speaker, if the Minister wanted, he could decide to protect the
Oral Questions
corridor because of the impact on the environment, the impact on the congestion at Pearson Airport, and the impact on the highways in Ontario and Quebec.
Will he do that now so that, at the very least, that section in that very populated area of the country can be protected, and we will continue to fight for the rest?


Benoît Bouchard: Mr. Speaker, I hope my friend is not comparing the Winni-peg-Churchill route with the Toronto route.


Iain Francis Angus: They are both necessary.


Benoît Bouchard: There are not the same kind of transportation modes between Toronto and Montreal and between Winnipeg and Churchill. Of course we kept nine routes where, in some places, there is no other transportation mode. He understands that very well.
The decision on the corridor will be made in light of the proposals by VIA Rail. It is a Crown corporation that must make its own corporate plan. Once again, decisions will be made in due course. I have no more money than I did two months ago. We will make a decision that corresponds to our capacity to pay.


HOUSING
Mr. Andre Harvey (Chicoutimi):: Mr. Speaker, my question is for the Minister of State for Housing.
Everyone knows how important our restoration assistance programs are throughout the country and particularly in Quebec.
I would like to ask the Minister of State for Housing if he intends to further emphasize assistance for rental housing in his social housing programs.


Hon. Alan Redway (Minister of State (Housing)):: Mr. Speaker, two weeks ago, I met the Quebec Housing Minister, Mr. Paradis, the Mayor of Quebec, Mr. Pelletier, and the Mayor of Montreal, Mr. Dore. I hope to form a tripartite federal-provincial-municipal committee, which will find solutions to the problems raised by the Hon. Member.
I also wish to cooperate with the Hon. Member and other Members from Quebec to solve these problems.

June 19, 1989
Oral Questions


VIA RAIL
Hon. Herb Gray (Windsor West):: Mr. Speaker, I want to return to the unprecedented appeal of the mayors of the major cities in the Windsor-Quebec City corridor to the Minister and the Government that the VIA Rail service in that corridor be kept in operation.
Why does the Minister not agree with the mayors when they point out in their brief that more than 10 million people have access to this service and that the future of the railway links in the corridor therefore has an impact on Canada's economic development? If the Minister and the Government are serious about Canada's economic development, why do they not end the uncertainty today and make a commitment that that VIA corridor service will remain in operation?


Benoît Bouchard: Mr. Speaker, perhaps I do not have the same perception of management as the Member for Windsor.


Some Hon. Members:: Hear, hear!


Benoît Bouchard: When we see the debt that was created by the Liberals, we know very well that they are ready to use 25 per cent of the budget for all of Transport Canada on 3 per cent of the ridership. That is how the economy developed in this country under the Liberal Party. Thank you very much, but I am not interested.


Herbert Eser (Herb) Gray: Mr. Speaker, the Minister's answer is a slap in the face to the mayors and people of the six large cities in the Windsor-Quebec corridor.


IMPACT ON REGIONAL ECONOMY
Herbert Eser (Herb) Gray: Mr. Speaker, why is the Minister ignoring a key point in the brief of the mayors when they say that current service in the corridor cannot be interrupted because "this would have catastrophic affects on the regional economy and the competitive position of the cities in the corridor". Why does the Minister and the Government not care about this
and make a commitment now to keep that service in operation?


Benoît Bouchard: Mr. Speaker, who said today that the service will be cut between Windsor and Quebec? I said repeatedly in the House that we will wait for the proposals by VIA Rail. The Hon. Member has already made a decision without the Crown corporation, as Liberals have always done. He will have to accept that the Crown corporation will make its proposals. The mayors understood that this morning. He should speak to the mayors again.


IMMIGRATION
Mr. Sergio Marchi (York West):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration. Media reports today reveal that over 100 special ministerial permits have been issued to allow entry into Canada of individuals who are willing to invest over $150,000 under an investor program that is still not officially and fully operational.
Why did the Government announce this program in April 1988, only to raise demands and expectations when no regulations have been finally established? Why did the Government issue ministerial permits to people under a program that has yet to obtain the necessary legislative authority from the Chamber?


Barbara Jean McDougall: Mr. Speaker, I think it is important to point out that since the program was announced there have been discussions with a number of provinces. There are very clear guidelines in place. I think they are well understood by the people who are directly involved with the investment procedure. The regulations will follow.


Sergio Marchi: Only that Government can put the cart before the horse.


GOVERNMENT RESPONSE
Sergio Marchi: Mr. Speaker, my supplementary question is directed to the same Minister.
The Minister knows that ministerial permits were designed to be used for compassionate and humanitarian reasons to help people who are facing desperate or life threatening situations. Why did the Government abuse the application of these permits by allowing business

investors simply and blatantly to buy their way into this country?
Why extend special privileges to the chosen wealthy few when the Minister, for instance, has played tough and callous with families whose children suffer from Down's syndrome?


Barbara Jean McDougall: Mr. Speaker, I want to remind the Hon. Member-and he has personal knowledge of this-that this Government does use ministerial permits for many other purposes.
This is the Government that has expanded the family class. This is the Government that has actively moved to help Chinese citizens in Canada with the current situation in China. This is the Government that has taken in more refugees than were taken in before. I think that the question is really an inappropriate one.


FISHERIES
Peter L. McCreath: Mr. Speaker, my question is for the Secretary of State for External Affairs. Recently the Government announced the establishment of a special committee of Cabinet to review the potential impact of possible reductions in northern cod stock.
Given that Nova Scotians already face urgent and serious difficulties arising from the proven diminution of the groundfish stocks of the Scotia Funds region, can the Minister assure the people of Nova Scotia, and in particular the people of the South Shore, that the special committee will as well review our urgent needs and problems and that the committee will bring forth recommendations for special measures to respond to existing as well as to potential problems in the Maritime coastal areas?


Charles Joseph Clark: Mr. Speaker, I want to thank the Hon. Member not only for the question but for the active representations he has made to me and to other members of the
Oral Questions
Government with regard to the very special and serious problem of the groundfish fishery in Nova Scotia.
I can assure the Hon. Member that the special committee I have been asked to chair will look at that question. We will examine the effectiveness of existing programs in dealing with the impact of that problem upon the communities and the livelihood on the South Shore. If necessary we will look at other programs.
I would ask the Hon. Member to continue his active representations which have been very helpful to us.


THE ENVIRONMENT
Mr. Jim Fulton (Skeena):: Mr. Speaker, my question is for the Minister of the Environment. As the Minister knows, the Prime Minister endorsed the conclusions of the World Commission on the Environment and Development before the United Nations. The Minister of Environment endorses the principle of sustainable development on an almost daily basis and claims that it is the number one priority of Cabinet.
However, despite the lip service, 72 per cent of Canadians polled by Gallup this month believe that the dangers of pollution are now severe. We in this Party have proposed that at least 1 per cent of the national budget be directed to grassroots organizations to take action on sustainable development. Does the Minister not believe that 1 per cent of Canada's national budget should be set aside for that purpose in this crisis situation?


Hon. Lucien Bouchard (Minister of the Environment):: Mr. Speaker, we were all very interested this morning to read in the papers that 97 per cent of Canadians are aware of the seriousness of the environmental situation. This is confirmation that the Government was right in making a strong commitment to sustainable development. We will pursue this commitment.
We know that the funding of the organizations is not at the level that they were expecting. I met them this morning. I think that we will have to devise a policy to take care of this concern.

June 19, 1989
Oral Questions


FUNDING OF CANADIAN NETWORK
James Ross Fulton: Mr. Speaker, on June 8 in this House the Minister of Environment said the following:
We have all made too many speeches on the environment. What we
need now is action.
I think we all agree with that. As the Minister would know, the Canadian environment network represents over 1,800 national environment groups, and the Government of Canada provides $84 per group per year, one three hundred and sixtieth of what the Government provides to amateur sport. That funding is to assist them in research and public education on environment issues right across this country.
Does the Minister really believe $84 per group per year is sufficient to deal with the crisis we face in the environment of Canada and the earth?


Lucien Bouchard: Mr. Speaker, it is true that too many people are delivering great speeches for environment, but the difference between our colleagues on the other side of the House and ourselves is that we are taking action.


Some Hon. Members:: Oh, oh!


Lucien Bouchard: We have already announced the implementation of two programs: one last year, $110 million for the action plan for the St. Lawrence waterway, and last week $50 million for the "environment partners fund". Those are actions that we are taking.
We will introduce more in the fall. There is very important legislation before this House, and the House will be invited to co-operate with the Government to provide the country with an Environmental Assessment Act.


FREE TRADE AGREEMENT
Hon. Lloyd Axworthy (Winnipeg South Centre):: Mr. Speaker, my question is for the Minister of International Trade. Last October the Prime Minister was quoted as saying that the Free Trade Agreement would create more new jobs for Canada and put more money into
Canadian pockets. Yet, we now have in front of us a report from Statistics Canada, and the quarterly trade results which show exactly the opposite.
In fact our exports to the United States are consistently going down and our imports from the United States are consistently going up. Is the Minister now prepared to say that the Prime Minister was wrong and that in fact the Free Trade Agreement is ending up having fewer jobs for Canadians and less money in Canadian pockets?


Hon. John C. Crosbie (Minister for International TVade):: Mr. Speaker, I could give the short answer which is no, but I want to elaborate a little.
For example, the World Economic Forum just met here in Canada, and Klaus Schwab who is the founder of that forum said that our economy's recent growth rate has been second only to that of Japan. He said:
The forum's most recent ranking on the competitiveness of various
countries placed Canada in fourth position.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: Economist Pierre Fortin said:
The signing of the Free Trade Agreement-is the most important
economic achievement of this decade for Canada.


Mr. Speaker:: The Hon. Member for Winnipeg South Centre.


John Carnell Crosbie: There is more to come, Mr. Speaker.


IMPACT ON TRADE BALANCE
Lloyd Axworthy: Mr. Speaker, with all due apology to Mr. Klaus Schwab and the World Economic Forum, I am talking about a report from the Government itself, the Statistics Canada report which points out that our trade balance is at its lowest level in close to eight years. In fact, we are almost close to having a trade decline, a trade deficit which we have not had in 15 years, all because of the disastrous agreements signed by this Government.
We want to know what this Government is going to do about that trade deterioration. Is the Government going to do something about the closures in the softwood lumber industry? Is it going to do something about the movement of the auto parts industry to Mexico? Is this Government going to stop issuing press releases from Mr. Schwab and take some action on behalf of Canadian business?
June 19, 1989


John Carnell Crosbie: Mr. Speaker, we just saw the sparrow in action again.
Monte Kwinter who is the Minister of Industry in Ontario-


Some Hon. Members:: Oh, oh!


John Carnell Crosbie: -is quoted today as saying:
-his Government hasn't identified a single plant that has closed because of encroaching U.S. entrepreneurism under free trade.
Finally in explanation for the present trade surplus position, there is a whole series of explanations including the fact that the Canadian dollar has gone up tremendously in value since 1984 when the disastrous economic performance of the hon. gentlemen opposite was ended. That is one of the reasons for this situation.
Imports of aircraft have risen quite tremendously. There has been an increase in crude oil prices. Our wheat exports are temporarily down at the moment. I could take the gentleman outside and explain all these matters to him, but I can assure him that it is not the U.S.-Canada Free Trade Agreement. It has no connection with the situation at all.


VIA RAIL
Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, my question is for the Minister of Transport. The Minister appointed as president and chief executive officer of VIA Rail the president and chief executive officer of Canadian National, a company that spent VIA's whole corporate life gouging VIA financially-
This creates a conflict of interest because for every VIA route that is cancelled by Mr. Lawless, this enhances CN's argument for shutting down that rail line entirely. Why did the Minister appoint Mr. Lawless as president of VIA Rail when he knew that it must surely mean the end of the passenger service between Sydney and Halifax, which would lead almost definitely to the abandonment of the rail line in eastern Nova Scotia?
Oral Questions


Benoît Bouchard: Mr. Speaker, the president of VIA Rail, Mr. Ron Lawless, appeared last week before the Transport Committee. I believe I said that this question was raised, and Mr. Lawless answered satisfactorily regarding that concern about a conflict of interest. I believe Mr. Lawless is an outstanding man in terms of rail transportation. The role he has to play is to deal with the levels that we have given to him. Unfortunately, I believe that we cannot afford, as the Member's Party unfortunately did for so many years from 1977 to 1984, to deal with the corporation which could not attract maximum ridership. For that reason I believe the decision which will be made will be the best, even for eastern and Atlantic Canada.


PROPOSALS OF VIA RAIL AWAITED BY MINISTER
Russell Gregoire MacLellan: Mr. Speaker, the Minister knows that appointing Mr. Lawless as President of VIA Rail is like asking a fox how many chickens should be left in the coop. Why does the Minister not admit that he wants to see VIA Rail service abandoned between Sydney and Halifax and that he wants to see the rail line in eastern Nova Scotia abandoned?


Benoît Bouchard: Mr. Speaker, at this time the Minister does not have to want anything about VIA Rail, he has to want to have a report by the corporation which will give options. If one of the options is to keep the route between Sydney and Halifax, I will be delighted to be in agreement with the company. However, I have to wait for the proposals.


HOUSING
Mr. Jim Karpoff (Surrey North):: Mr. Speaker, my question is directed to the Minister of Housing and concerns the Patricia Starr case and the use of CMHC guaranteed funds for the Prince Charles Seniors project in Toronto.
It is standard practice for CMHC funds not to be released to a project by a financial institution unless authorized by CMHC, based on specific expenses, and supported by vouchers and signed contracts. Consulting

June 19, 1989
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contracts and invoices have to be filed with CMHC and authorized on an individual basis on each job.
Can the Minister state whether in the Prince Charles project these procedures were followed and if not, why not?


Alan Redway: Mr. Speaker, the case to which the Hon. Member is referring was a turnkey project involving the Tridel Corporation and the charity in order to produce the non-profit housing project. In that particular case funding was advanced in accordance with the usual procedures of CMHC. The funds that are involved, as I understand it, are funds that were returned to the charity as a retail sales tax rebate. It was those funds, as I understand it, that were used in connection with this situation.


EXPENDITURE OF CMHC FUNDS QUESTIONED
James Capsey (Jim) Karpoff: Mr. Speaker, I would like to point out to the Minister of Housing that some of the funds were in fact for consulting fees guaranteed by CMHC. This scandal is now a month old. Has the Minister not found out what vouchers and contracts were filed with CMHC concerning this project and Patricia Starr?


Alan Redway: Mr. Speaker, that is most certainly the case. All of those facts are well known to CMHC and in fact a request has been made for the return of the funds which were spent inappropriately.
I am sorry that the Hon. Member has not had the opportunity to ask a question in this House for some six weeks. Members of the Government have, of course, been asking questions on housing and I am pleased to see that at long last-


The Acting Speaker (Mr. Paproski):: Orders of the Day.



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 third time and passed.
The Acting Speaker (Mr. Paproski):: When the House rose at one o'clock the Hon. Member for Mackenzie (Mr. Althouse) had the floor. He has a further eight minutes plus 10 minutes for questions and comments.


Victor Fredrich (Vic) Althouse: Mr. Speaker, when the sitting of the House was interrupted for the lunch break I was pointing out some alternatives that the Government might use in order to offset the deficit about which it is so concerned at the moment. I pointed out a couple of tax provisions which I thought would do two things; they would provide funding to reduce the deficit and would also help in the fight against inflation. I wanted to carry on by pointing out in the last few minutes available to me that there are alternatives. I was attempting to point out some of the other choices which the Government has to raise money and to reduce the deficit. One of the things which the Government has overlooked is where it gets its money.
Let us examine the long-term pattern of taxation with respect to the proportion of revenue accruing from personal and corporate taxes respectively. We know that in 1950 income taxes from personal and corporate sectors were approximately equal and together they represented some 75 per cent of the total federal revenues. About three-quarters of what the Government took in came from income tax, half of that from the corporate sector and half from private individuals.
By 1988, personal taxes had risen from 35 per cent to 47 per cent of total government taxation and revenues, while corporate taxes had declined from something like 40 per cent to about 9 per cent of government expenditures. In other words, the corporate sector has managed to sharply reduce its relative share of the cost of government operations to less than one-fifth that borne by individual taxpayers collectively. In 1988 terms, if the corporate sector contribution had been equal to that paid
June 19, 1989

under personal taxes, instead of a budget deficit of some $30 billion the Canadian Government would be looking at a surplus of $18.5 billion.
The difference there is quite dramatic and if the Government is really serious about reducing its deficit, one of the first things I contend it should do is start going back to equitable taxation between the corporate sector and taxation of the individual and small business.
Earlier I pointed out some of the problems that came from this kind of tax policy. Instead, the Government brought in a Budget which imposes additional taxes on individuals. It proposes to add, at the beginning of 1990, a new sales tax which, far from being revenue neutral as was touted by the Minister of Finance (Mr. Wilson) months ago, according to Finance Department officials' own figures it will take an additional $3 billion from the pockets of individual taxpayers.
I contend that under any definition of inflationary pressure that will be inflationary. The Government is asking people to shell out even more money for services and will be creating an inflationary environment. The Government is feeding the Bank of Canada with a policy which is attempting to keep the Canadian dollar high by keeping interest rates high and attracting dollars to Canada, something which is self-defeating on a whole series of counts.
We heard in Question Period today that we are very close to having the first trade deficit that the country has faced in more than 50 years, all because we have built the Canadian dollar up into the low eighties from the high sixties. In order to do that the Government has successively increased the amount of interest that we have to pay.
Small business people, farmers and homeowners in my riding are having to pay ever-increasing interest rates, an increase of more than 3 percentage points over the past year.
When we produce our goods and services for export, whether it is grain, light manufactured goods or wood products, the price that we receive in U.S. dollars, whether we sell it to the United States, Asians or Europeans, the value of the product in our market is down. When we were selling it for 67 cents U.S., and are
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now selling it for 82 cents or 83 cents, the amount of money that we have to keep is very much smaller. We have lost 15 per cent to 18 per cent of the value of those products simply because the Government has decided to go for a high dollar kind of policy accompanied by high interest rates.
If the Government is serious about cutting both inflation and the deficit, a lower interest rate policy accompanied by a slightly lower dollar would help us to get there. The cost of carrying the something between $320 billion to $350 billion accumulative deficit would go down if we let the interest rate go down. The amount of money that exporters right across the country would gamer from shipping products outside of the country would go up. With those extra funds, new economic activity could be created. Instead, the Government chooses the current route of charging more taxes and reducing very much needed services to constituents.
It has particularly been hard on constituencies lying outside of the big metropolitan areas, areas like Mackenzie in Saskatchewan which I represent. We have seen a commitment in this Budget for the Government to cut $90 million to $100 million per year from its contribution to the crop insurance program. This means that the farmers and the provincial governments are going to have to pick up the difference. Given the tendency of the provincial governments of late, I predict it will mostly fall on the farmers.
From this Budget we have seen an announcement to end all branch line rehabilitation. The last little branch line in western Canada which is going to be built this year is being built into my hometown. There is 13 to 14 miles there. After that, there is no more money. What does that mean? It has been accompanied by an announcement by C.N., and apparently soon to be followed by CP, that the track crews which CN have will be cut by one-half. They are going to lay off half the workers. Anybody with seniority of under 12 or 13 years will be probably laid off and out of work. The branch lines have now been reserviced or totally abandoned. Those branch lines which have been rebuilt are only guaranteed service until the end of this decade, this century, to the year 2000. They will not need track crews any more to keep them up. They have all been rehabilitated in the last 10 years. The companies have just callously decided to lay off half the track crews and let the service go to pieces

June 19, 1989
Borrowing Authority
because they will not be servicing a lot of these towns in the very near future. Within a decade they can abandon them. This came about because the Government decided to abandon those particular programs.
This last Budget ended interest-free cash advances to farmers which has been a part of the farm network of services for the last 15 years or so. It has now ended. There is an end to the commodity based loans under the Farm Credit Corporation where the Farm Credit Corporation is asked to share the risk of declining farm prices. They cannot do that. The Government talks a lot about the risk but they do not want to be involved in sharing some of the risks they are imposing upon Canada's farmers.
This Budget saw the elimination of the Dairy Special Export Program. It is no longer in existence after this Budget. This Budget saw the termination of the At and East grain and flour rates which permit Halifax, Quebec City and the ports which are open over winter to participate in the grain trade while the seaway is frozen up. It is being put to an end. It will reduce the potential for export. It will reduce the jobs which exist in those ports.
This Government has, in short, given up on a lot of programs that I think were necessary to keep the regions of this country healthy, and has continued with a program of leaving the regions to the mercies of the cold winds of economic rationalization. It would not be so bad if that was all the Government was doing but it is forcing this rationalization by interfering with the interest rate, interfering with the dollar, deregulating transportation and the other services which might keep these regions in business. It is doing everything it can to force them out of business. I do not know how the country can continue with that kind of policy.


The Acting Speaker (Mr. Paproski):: Questions or comments. Debate. The Hon. Member for Hamilton East.


Sheila Maureen Copps: Mr. Speaker, I think it is particularly appropriate that on this day when we have the mayors of the Quebec City-Windsor corridor in Ottawa to deal with the Government's devastating cut-backs on VIA Rail and to address the environmental issues, that we also have an opportunity to speak on the borrowing Bill. The Government is seeking authority to borrow millions and millions of dollars at the same time
as it claims that it does not have the money to maintain essential services.
It is interesting to note that in one of today's columns it is pointed out that one single interest-free loan which has been recently tendered to-

-the Lavalin Corporation is worth as much as all the funds throughout Canada for all unemployed workers, whether they lost their jobs because of free trade or something else.
Mr. Speaker, it's incredible! The Government says that it does not have a cent, that it is almost broke, but when the time comes to give Lavalin an interest-free loan, it finds the money. However, when the time comes to pay for VIA Rail to make linkages among communities, it never has the money.

This Government is fraudulent in the sense that it is claiming to the people of Canada that it cannot afford to keep the rail service going. What is the ultimate effect of a cancellation of the rail service? In our own area, the Government is spending millions of dollars on an ongoing basis to try and keep traffic going into the Toronto International Airport. The Toronto International Airport at the moment is an economic disaster area. In fact, my colleague, the Member for Gatineau-La Lievre (Mr. Assad), raised a question in the House last week that conventions, conferences and business people do not even want to go to Toronto for conventions because the airport is such a disaster area.
We know that the Minister of Transport (Mr. Bouchard) himself, gutless though he may be-he is not prepared to admit to the public that there is a severe safety problem in Canada's skies-has undertaken a secret study of the safety issues which are basically at the root of some of the problems in Toronto. I am doing everything I can to avoid Toronto. One of the ways which we can avoid the Toronto International Airport is by using an effective train service.
The decision by this Government to eliminate VIA Rail passenger service at the very moment when we as a nation are becoming cognizant of the fact that the environmental time bomb is ticking, is sheer folly. If we look simply at the issue of the creation of sulphur dioxide and the carbon monoxide emissions from automobiles and how much our own atmosphere can be saved by effective and efficient use of passenger service, and if we believe the comments of the Brundtland Commission about sustainable development, then surely we have a responsibility to encourage the use of communal passen-

ger service. In particular, a most efficient use of the rails which are a cleaner, more effective form of movement of Canadians than the amount of fossil fuel burning which is needed to get one jet off the runway at Toronto International Airport.
When we want to talk about money and savings in the economy, let us understand that the train service in this country has formed an integral part of the development of the communities.

And, Mr. Speaker, I think that there are other issues related to the Government's decision to cut the ties between communities.

We are not just making an economic decision here. What we are making is a decision to amputate the lifeline of an island like Cape Breton.
I was in Cape Breton on Friday night and met a young student who uses the train to get to university. She told me that if that train is cut off she will not fly because she cannot afford to. The bus service makes it necessary for her to stay overnight in a hotel in order to make a connection. The train service effectively and efficiently provides a link between the island and the mainland and keeps Canada together. This is not just an economic issue, it is an issue about whether the Government believes it should be putting money into communities that link Canadians from coast to coast.
If Sir John A. Macdonald in the early 1860s had looked at the issue of the CNR, he may have said it does not make economic sense. It is too expensive. We cannot afford to do it. He could have been a doomsayer and a naysayer like the Conservatives. But instead, Sir John A. Macdonald had a dream. He had a dream that despite all the economic forces pulling us to the south we were going to build a country that went from east to west. We were going to pay the price that includes sometimes having a postal service that is not just there to make money. Did you hear the Minister responsible for the post office-I should say the coast office, because that is about what it is doing at the moment-boasting about his profit? There are thousands of Canadians in rural communities who have had their lifeline to the outside world cut off with the closure of rural post offices, Mr. Speaker. But the Minister of Regional Industrial Expan-
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sion (Mr. Andre) and the Government see the function of the post office as merely a money-making machine. There is more to Canada than sheer capital even though the Conservatives do not seem to be aware of that fact.
I was not surprised that the post office was able to report a profit. We had hearings in Hamilton recently which pointed out specifically that the post office in Hamilton is breaking the law by requiring workers to work overtime without getting paid for it. Indeed, if workers want to be hired by Canada Post they have been requested to sign a form in which they will state that they will work overtime without being paid for it. It is a violation of the law. Any business in this country could turn a profit if it were prepared to disregard the basic rights of workers under the Canada Labour Code.
We were also informed that on a regular and consistent basis Canada Post falsifies its payroll records, falsifies Priority Post recordings so that it can report that it has delivered a piece of mail on time when, in fact, it has not. That is standard operating procedure at the post office. Furthermore, we heard that it is standard operating procedure when a package valued under $100 is insured for delivery, that if the delivery date is not met there is a specific directive given to employees to destroy the contents of the package and pretend that it has been mislaid or misplaced. The post office does not want to say it has not met its delivery deadline. Anyone can cook the books, Mr. Speaker. But it is up to the Government to have a direction for this country which says that there are certain instruments of national unity which should be supported in order to build Canada east and west and make us a stronger nation.
One of those instruments is VIA Rail and its passenger rail service. Heaven knows, when the Conservatives were sitting on this side of the House we remember very well the assault on previous Liberal Ministers when they attempted to change passenger service at places like Nakina. I remember, because I myself wrote on behalf of the residents of Nakina urging CN to continue stopping in that particular community. But what we have is a deliberate and vicious attempt by Mr. Lawless-and I think his name is rather appropriate-and the Minister of Transport (Mr. Bouchard) to close VTA Rail. They do not want the system to work. They do not want Canadians to start using rail as an alternate, cleaner, more effective and more efficient use of common transport. They would prefer simply to shut it down. They do not look at the economy and the deficit. Take a trip down the

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highways between the Windsor-Quebec City corridor any given day of the week.
How many hundreds of thousands and millions of dollars are lost by virtue of the fact that many of our roadways are currently impassable? They are impassable because the volume of traffic that is in a position to move from Windsor to Quebec City is far greater than the system was built to carry. If you are a trucker sitting on the highway-let us say the 401 coming east of Toronto- for two or three hours of lost trucking time multiplied by the hundreds of thousands of commercial vehicles on the road that are paying the price for an over-clogged system, that is lost gross national product. That is lost money to the economy. But the federal Government in a very shortsighted and environmentally insensitive way does not look at the long-term impact of what will happen when these hundreds of thousands of passengers pour off the trains and onto the roadways or onto airplanes.
We are spending in the millions of dollars already and we cannot deliver a decent service to fly somebody from Ottawa to Toronto. So how in heaven's name do we expect to be able to absorb the increased capacity of the number of passengers who will be leaving the trains and piling onto the roads or into planes or buses? It cannot be done. For the Government to suggest that it is merely a bottom line issue is a folly.
It is symbolic of this Government that it really does not give a dam about the regions and communities of this country that are very dependent on federal government involvement. An example of this was the response of the Minister of National Defence (Mr. McKnight) today when the people of Summerside at their own expense came thousands of kilometres to Ottawa to plead their case, and they did not even get the courtesy of a decent answer from the Minister on what research went into the decision to close down CFB Summerside. Callous, cold, cruel, uncaring, heartless are just some of the adjectives that must be used to display the utter disregard of this Government for the people of Summerside whose livelihood depends very much on the survival and sustenance of the base at Summerside. What did the Government
say? It sent out the Minister of Employment and Immigration (Mrs. McDougall).
I must say I am getting increasingly disturbed about a trend of this Government. When the Government has to make a tough decision or bring forward a tough policy, it trots out its women members and women Ministers to justify it. Well, we on this side of the House think it is unconscionable that a government that promised it was going to create hundreds of thousands of jobs is in the process of dismantling the very infrastructure that permits the survival of those jobs in those communities. What is the Minister of Employment going to say to someone in Summerside? The Minister is telling them to work together with the Minister for the strengthening of ACOA. We have seen what ACOA has done. It has built a very nice road beside the property of the Minister responsible for Nova Scotia and ACOA, the Minister who is responsible for making recommendations for ACOA. But the Government certainly does not have the capacity to replace the kind of fatal blow that has been dealt to CFB Summerside.
I do not think it is a coincidence that this vindictive action has been taken against a province that by sheer coincidence voted Liberal in the last election. There are four seats in Prince Edward Island.
The people of Prince Edward Island were not hoodwinked by the false promises of the Government and they voted Liberal. If you look in my own community of Hamilton, Mr. Speaker, we had the good sense to send three Liberal Members to Parliament. The Government is embarking on a plan which was articulated very well by the Hon. Member for Mississauga South (Mr. Blenkam) who basically a few days after the election made one of the truer statements made by this Government-and I use the word advisedly-when he said that Ottawa and ridings that voted Liberal would be punished by this Government because it would not forget. Well, we are being punished in Hamilton. The Canada Centre for Occupational Health and Safety has been operating for ten years. The Minister of Labour (Mr. Corbeil) has recognized that it is a model not only for Canada but for the world. It is a model of worker, management and Government participation. Yet the edict has come down

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from Ottawa that within the next three years, the centre must be self-sufficient or it will be cut completely loose.
To understand the mandate of the centre, one must realize that the centre makes available to workers across Canada information on chemicals, for example, materials workers may be working with which are potentially life-threatening if they spill them, rub them in their eyes or come into contact with them in an unsafe way. The centre allows them to call to find out what chemicals are involved and whether or not they represent hazards in the workplace. I dare say that some companies might make this information available to their employees but many would not prefer to do so. This service will not be able to survive because of the theory of the Conservative Party, which is that if it does not make a buck, cut it. There are some things in life that are more important than making a buck, and I happen to believe that one of them is protecting the lives of workers.
The centre was expanding to work with the Canadian environmental network on environmental information. Canadians are thirsting for information about how to do more locally and think globally in relation to the environment. The Canada Centre for Occupational Health and Safety, together with the Canadian environmental network was moving to develop a model whereby people anywhere in Canada could pick up a phone to find out the effect, for example, of CFCs, to find out what one can do in one's own home to recycle and conserve. This is the kind of useful information which could lead to the saving of our planet. That was what the centre had in mind, but because the Conservatives do not feel that the centre responds to the almighty dollar, it will cut it loose. It will kill that centre which had been operating for a decade and was visited by people and organizations from around the world.
We on this side of the House are trying to say that the role of Government is not merely to borrow money. The role of Government is not merely to create capital. The role, of Government is to create a climate in which our country is built and made strong, one which develops links from region to region. Sir John A. Macdonald had a dream that the trains could link east and west. It is
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important that the Government understand that the role of VIA Rail is not simply one of coming up with a bottom line, the role of VIA is one of linking the country.
The Post Office does not exist to make a profit. The Post Office does not exist for the trading of stocks and bonds. That is the role of the private sector, the Toronto, Vancouver or Montreal Stock Exchanges. The role of Government is to provide a base from which the private sector can grow but also to provide a base that protects the weaker regions and the weaker citizens.

The Gallup polls last week showed that the Conservative Party is losing popularity in all regions, including Quebec, the Maritimes and the West. The reason for this incredible statistic is that the Conservative Party does not understand that it is the Government's role to make this connection. All it sees, Mr. Speaker, are dollar signs.

All they can see are dollars signs popping up and down. The Minister responsible for the Post Office was practically salivating last week as he saw those dollar signs popping up and down. However, he did not talk about the increase in costs, the fact that the people in my riding cannot get door-to-door mail service if they happen to live in the newer areas and are relegated to having to use supermailboxes. He did not mention that rural post offices across Canada have been cut down and that workers are being forced to work illegally. He did not mention that Canada Post has embarked on the falsification of payroll records, an illegal activity. Those are the kinds of reports that the Government should be called to account for. Instead, all we see is the Minister responsible salivating over Canada Post's profit report.
We in the Liberal Party do not support the Government's single-minded pursuit of capitalism at the cost of the regions. We do not support the Government's pursuit of dollars through the closing down of VIA Rail and rural post offices and so many of the things that have kept Canada together. That is why we cannot support the Government's borrowing Bill. Why should we give the Government billions of dollars when it is only interested in spending the money to pump up their friends and to make the unfortunate decisions we have seen made in

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the last five years? Government Members are frauds, they should be exposed and we should not vote for the borrowing Bill.


Mr. Fontaine:: Mr. Speaker, I have a question for the Hon. Member for Hamilton East (Ms. Copps).
At the beginning of her speech, she alluded to a project for which $800 million would be made available, in order to finance a surface rail transit system in Bangkok. This project was made possible thanks to work done by Lavalin and a consortium of Canadian companies. The Government has not yet agreed to make the funds available. In the course of negotiations with the EDC, it was suggested that 39 per cent of the funds would be made available interest free, and that 61 per cent would be subject to 8 per cent interest. Those are conditions that appear to be customary on the world market.
Does the Hon. Member mean she would prevent Lavalin and its group, its Canadian consortium, who are capable of breaking into the Bangkok market and who are capable of building surface rail transit systems- Is the Hon. Member saying to this Government: We are not going to support the efforts of Canadians, we are not going to let Canadians play a leadership role and apply their expertise to building surface rail transist systems in Thailand, New Delhi and throughout the world? Is that what she means? Does she want to prevent Canadians from exporting? I would appreciate some clarification.


Sheila Maureen Copps: Mr. Speaker, certainly not. However, the Conservative Party is giving most of its support to the capitalist system.
You are asking Canadians, and especially senior citizens, single mothers and the people of Prince Edward Island to make sacrifices, and you say you don't have enough money!
The Government has an obligation to choose, and if I were in the Government and I had to choose between giving an interest- free loan to Lavalin or supporting
1,000	workers who are unemployed because of the policies of this Government, I would prefer to give money and support to single parent families, the unemployed, and the people who need VIA Rail. It's a
wonderful idea to go to Bangkok and work on a project. Nothing wrong with that. But if you truly support the capitalist system, why does the Government pay and not Lavalin? If a choice has to be made, and if we ask Canadians to make sacrifices, why don't we ask the companies to make the sacrifices and let them pay, if it's a good idea?


Victor Fredrich (Vic) Althouse: Mr. Speaker, after having listened to the Minister of National Defence (Mr. McKnight) and some other cabinet Ministers today, I wonder if the Hon. Member for Hamilton East (Ms. Copps) would care to try to explain what we heard this afternoon. It seemed to me that the Minister of National Defence said that there was nothing in Prince Edward Island to protect. Was he tiying to tell Canadians that the island is not worth defending or was he trying to tell Canadians that no one would want to attack it because no one would want it?


Sheila Maureen Copps: Mr. Speaker, I think the Minister was displaying his absolute ignorance of the life of the people of Prince Edward Island and the fact that he really does not care. The issue that was never referred to by the Minister is the issue of air surveillance of Eastern waters. Obviously we are being assaulted from all sides by over-fishing and the abuse of our 200-mile limit off eastern Canada. The people of P.E.I. know that better than anyone else. The Minister of National Defence (Mr. McKnight) did not care. He basically stated that, as far as he was concerned, and I think he made this comment once before in the House, he was not into regional development projects, or something of that nature. That is how he views Prince Edward Island. The sarcastic remarks the Minister made about the Premier of Prince Edward Island were in large measure due to the fact that they do not share a common political philosophy. That is why the activity of the Government has been vindictive. It has been directed in particular toward the people in those areas of the country who saw through the fraud of the Conservative Government. Now everyone does, because Members will have seen the Gallups.


The Acting Speaker (Mr. Paproski):: On questions or comments the Hon. Member for Renfrew.
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Mr. Hopkins:: Since the Hon. Member for Hamilton East (Ms. Copps) has taken such a deep interest in Canada Post, I would like to ask her about the so-called surplus that Canada Post has shown. Does the Hon. Member agree that the surplus Canada Post is talking about is simply moneys left over because of lack of service provided to Canadians, cutting valuable service to Canadians in rural areas, and no development in urban areas?
Within Crown corporations, what is the incentive to even attempt to make money when the Government comes along, takes up what is left over, and uses it itself? What incentive is there for government agencies with this Government?


Sheila Maureen Copps: It is the ultimate shell game. It reminds me a little of the Minister of Finance (Mr. Wilson) who, every time we ask him a question in the House in relation to those people we should be defending by our government policy, and that is the poorest of the poor, states that the Government took 800,000 people off the tax rolls last year. The same Minister does not state that since the arrival of the Conservative Government in 1984, 1.5 million people have been put on the tax rolls who were not paying tax before. The Government has put 1.5 million people on the tax rolls who are earning $12,000, $13,000, or $14,000 a year who never paid taxes before, and then states that it will give those people back half of their money, and government Members beat their breasts about it.
Obviously, the shell game of Canada Post is being carried on by the Minister of Finance and by others in the Government. I am not surprised that they want to perpetrate this fraud on the people of Canada. As I mentioned, the recent Gallups will show the Conservatives at an all-time low in popularity. That is a reflection of the fact that the Canadian people finally have their number and will never be voting for them again.


Leonard Donald Hopkins: Mr. Speaker, when I rose to speak on Bill C-ll at second reading on May 1, I opened my remarks by reminding Members that, in the first week of April, the Government ended its Throne Speech by stating: "May Divine Providence guide your deliberations." Since that day what we have seen from the Government will require a lot of divine guidance for us in order to continue to live with the Government for the next three and a half years.
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We have heard the discussions with the Minister of Finance (Mr. Wilson) on the floor of the House and the Prime Minister (Mr. Mulroney) attempting to defend him. If this situation had taken place in Britain, there would have been no question about the route that things would have taken.
Today we are debating a borrowing Bill at third reading for more than $25 billion. During the election campaign last fall, members of the Government were going around the country bragging that they had the finances of the nation under control. The Prime Minister and the Minister of Finance were stating that they took on the challenge, solved it, we are on the right road and away we go. It was a real glory ride.
This winter, when the House was recalled, one of the first things we heard was that the country was facing a crisis, and our deficit was going to be bigger than expected. As a result, the national debt would continue to grow by leaps and bounds under this Government. This Government is still blaming a previous Government even though it succeeded in doubling the national debt since it took office less than five years ago. After nearly five years in office, the Government is still desperately attempting to blame someone else for not having been able to get its own act together.
Over the weekend we heard about the declining trade surplus between Canada and the United States. One does not need to have written a doctoral thesis to understand what is happening here. Months ago we told the Government what was going to happen to the softwood lumber industry in Canada when the then Minister for International Trade, the Hon. Pat Carney, slapped on a 15 per cent export tax which practically killed our softwood lumber trade with the United States. That gave the milling operations in the northern United States the opportunity to build up their mills, improve them, bring in greater production, and now they are selling under that 15 per cent protection brought on by this Government's 15 per cent penalty on our own softwood lumber industry.
The companies in the United States that we were beating into the ground as far as competition was concerned before the Memorandum of Understanding on softwood lumber, and before the free trade deal, we are now losing out to and not being able to sell our lumber. Lumber is piling up in the lumber yards of this country. There have been lay-offs across Ontario. The Government is wondering what is wrong. As far as our

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trade surplus is concerned, lumber is one of the big sales that keeps our trade surplus in a healthy condition. Today, that has gone.
When the Memorandum of Understanding on softwood lumber was first introduced, there was a 71-cent dollar. Then the Government slapped a 15 per cent export tax on our own producers. Now the dollar is at 82 cents or 83 cents, therefore we have lost another 11 per cent or 12 per cent. The Government cannot deny responsibility for having high interest rates. I was present in the House in the early 1980s. I remember Ministers when they were in Opposition blaming the Government of the day for high interest rates in the early eighties that were as a result of world inflation and international pressures. However, today those Ministers state that it is not their fault. In the days when they were in Opposition, it was the fault of the Government. Therefore, if it was the Government's fault before, it is the Government's fault today that there is a high interest rate policy.
Those three issues have damaged the Government's surplus in trade, if it would only come to grips with it and admit a fact of life: high interest rates mean that our own industries cannot borrow money cheaply in order to upgrade facilities and compete; 15 per cent export tax on lumber; and the exchange rate on the Canadian-Ameri-can dollars.
Tbday the Minister for International Trade (Mr. Cros-bie) was once again giving the impression that everything was fine, that it certainly had nothing to do with the managerial ability of the Government that our trade surplus was declining. That is absolute balderdash. We know very well what is happening out there. The Minister for International Trade made a commitment that he was going to meet with the softwood lumber producers and come to grips with this issue and with the Memorandum of Understanding, as far as Ontario was concerned. Instead, he continues to blame the Ontario Government which was not consulted in late 1986 when the then Minister of Trade, now retired, was the one who agreed to the Memorandum of Understanding and overnight brought in that penalty on the lumber industry of this country.
The profits from Canada Post were mentioned a while ago. The Government states that Crown corporations
must pay their way. Then when Crown corporations do pay their way, the Government robs the bank, runs away with the petty cash, and uses it for its own purposes. Where is the incentive in our Crown corporations to make money today except in their dedication which is still there to a very large degree?
The Minister of State for Privatization (Mr. McDer-mid) appeared before the legislative committee which studied Bill C-ll. I want to make a point about that. We were sitting in a room in the West Block on Parliament Hill waiting to start the discussion on Bill C-ll, this borrowing Bill, in which the Government proposes to borrow $25.6 billion. This is not a slap against the people who appeared. They were very senior and well-informed Public Servants who appeared before the committee. Surely, as I brought out at the meeting, on a Bill of this size there should be a Minister before the committee to whom to put the political questions. We know that we cannot put political questions to senior civil servants and expect them to reply. That is the accepted rule around this place.
The Minister finally appeared part way through the meeting and answered some political questions. However, for all the information we got out of him he might as well have stayed in his office. The Minister responsible for privatization denied the fact that even though the Government was borrowing money that at the same time it was actually transferring the liabilities of the national debt, the liabilities of running the Government, to the provinces. This means less money in transfer payments to the provinces. It passed the buck to the provincial level. What can the province do then? It has less money so it has to pass the buck on to the municipalities which come under its jurisdiction. Then the municipalities have the dirty work of cutting their programs when they live with their neighbours every day right down on home base in their own individual communities. It is either that or cutting down on programs at that level all together.
Another matter that was totally swept aside and not even discussed was the fact that in the recent Budget, $8 billion of the increase in taxes is coming from average individual Canadians while $1 billion of the increase is coming from corporate Canada. Yet the Government calls this fair taxation. It calls it a fair deal. That is the idea of fairness of this Government.

With respect to the complaints about VIA Rail the Government keeps saying: "There are parts of the country which cannot get along without transportation services and we are aware of that". The way the Government has been treating rural Canada and the regions of this country indicate that it does not understand anything about it. The Government's main interest is in the bottom line. Its aim is to cut the bottom line, forget about rural Canada and bring everybody into the cities. What will the Government do when it brings all these people into the cities? The Minister responsible for privatization said very clearly at the legislative committee that the federal Government has no right to be interfering in infrastructure services such as water and sewers for municipalities. He said that that is a provincial responsibility.
If we look at the United States today we see that the Americans have been living off their capital instead of their income. What has been the result? What has been the result of not looking after their cities? The result has been that major cities such as Detroit, Chicago, New York and so on have tremendous problems in terms of water and sewage services-all types of services for their municipalities. Their cities will cost multibillion dollars to repair because they have been let go. The states cannot afford it. Municipal Governments cannot afford it any more. National Governments are the ones which can tax almost anything to get these jobs done, pay grants and part of its share to the municipalities.
When we look at this Government today we see that, indeed, it has as a federal Government taxed nearly everything in Canada. That is probably the only role in which it has been doing well. It will continue to tax nearly everything in the country-every thing and everybody. Yet the Government says: "We are not going to touch the municipal services. They are not our responsibility". They are services that affect every Canadian in everyday life. They touch every Canadian's life. It is our responsibility as well as the provinces, the many municipalities and the people in the back streets, the concessions, roads and the main streets of Canada to ensure that our facilities are kept clean and up to date.
How can we talk in the House about environment being such a fantastically important issue today and do
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our job with the environment if we are going to forget the most important thing of all? I refer to the first-class health conditions of every Canadian citizen. Of course, if there is not good water and sewage systems, then there is not good community health conditions. There is no way that we should be trying to sneak away from that.
There are other matters which I wish to mention. One is deregulation. I spoke several times on the deregulation Bill in this House when it was presented by the Government. The Government is now in trouble with it. It brought in deregulation at a time when the United States was getting out of it. I was very interested in going home on the weekend one week ago. I picked up the local Pembroke Observer and saw an editorial which rather warmed my heart. It is dated June 10 and the headline reads: "Air Deregulation Disaster, O'Brien Says". The article states:
Deregulation of the airline industry has had a major negative impact on small carriers, says Del O'Brien.
The President of Pern-Air, a local airline, he was a member of a group that spoke strongly against deregulation when the federal Government announced it would bring in the necessary legislation.
In a speech to the Pembroke Kiwanis Club this week Mr. O'Brien said deregulation has led to a monopoly position for two major carriers and to poorer service for Canadians.
Prior to deregulation major airlines handled about 76 per cent of the traffic, now two carriers control 96 per cent.
We told the Government that that is what would happen under that deregulation Bill on transportation.
Who is Del O'Brien who spoke to the Kiwanis Club in Pembroke on the deregulation of the air industry? Del O'Brien is the Conservative candidate who ran against me in 1968. At that time he was president of the Young Progressive Conservatives in Canada. He ran against me in 1974. He came to Ottawa and advised the Government what it should be doing, that it should not be going into deregulation. The Government ignored his representations as a good Conservative candidate. He was a good Conservative candidate to run against. The Government is not even listening to its own people. It goes ahead in its bull-headed way and brings something in anyway. We can see where the private, small entrepreneur trying to run an airline in the country is really behind the eight ball.
The result of this monopoly is that all regular fairs are almost exactly the same, there is only one reservation system, controlled by the big

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boys, Air Canada and PWA Corp. which owns Canadian Airlines International and Wardair, and, warned Mr. O'Brien, we should all be concerned about the safety of air flight under deregulation.
There are a wide variety of concerns under deregulation and one of them is air service in the north. While the big carriers are choking off competition, small airlines, many of which provide important rescue flights, are being either put out of business or moving to Toronto where the action is.
As a result air service to smaller centres in northern Ontario, and other provinces, is being reduced or even cancelled.
So much for deregulation. That is a very strong message from one of the Government's own supporters and candidates.
In closing, I would be remiss if I did not put this caveat in my speech, as I always do. The Minister of Energy, Mines and Resources (Mr. Epp), in a letter to employees of Atomic Energy Canada Limited, said:
-let me state clearly that the federal government fully supports the
Canadian nuclear program.
On page 1 he said:
The sources for continuing the necessary level of research and
development funding are uncertain.
If AECL does not bring in a report to show how it will make money, the Government will not loan it any. At the same time, the Government is selling off its assets and good work in the form of two Crown corporations under Bill C-13, which I will speak against.


Mr. Hovdebo:: Mr. Speaker, one of the most chilling aspects of the Government's Budget and this borrowing Bill is that it has put itself in a position where it must borrow. While it is making the largest tax grab we have seen in this country, it will still have a $30 billion deficit. Furthermore, it is eliminating many of the services we have come to expect in Canada.
During the last three years, over 1,000 foreign and domestic companies changed hands in Canada. Foreign ownership and control in Canada is the greatest of any industrialized country in the world. We also have the highest concentration of corporate power, with approximately 1 per cent of the top enterprises in Canada controlling almost 80 per cent of the shares of the 300 largest companies.
In light of this huge merger mania that seems to be happening, if the Hon. Member's Party was in Government would it implement a policy to tax the merger of
corporations or any type of acquisition that would not benefit Canada or provide jobs for Canadians?


Leonard Donald Hopkins: I thank the Hon. Member for his question. He is a very valued Member of our Public Accounts Committee and is very interested in these matters. I agree with his statement about the tax grab by the Government. I said in my speech that $8 billion of the tax increases in the recent Budget have come from individual Canadians while only $1 billion in tax increases come from corporations in this country.
I am reminded of the time when the Hon. Sinclair Stevens stood up in the House to say that he was supporting the Mitel workers. He asked why we were criticizing him when he was supporting the Mitel workers.
Of course, we know how the Government supported the Mitel workers. It sold the company to a British firm, an example of what the Hon. Member talked about, and one of the first things it did was to go into my riding in Renfrew and close down the $30 million Mitel plant and lay off over 500 workers. That is an example of corporate conglomerates destroying small town Canada.
The Hon. Member mentioned the amalgamation of firms in Canada. Those companies know they have a free hand to do so under the Government because the Government encourages big business. It does not matter how large a corporation would like to get, it is encouraged to grow larger no matter what stands in its way. That is the Tory philosophy.
This was the trend in the United States during the late 1800s, which continued until Franklin Roosevelt put restrictions on major corporations. He was accused of being a Communist for doing so, but the fact is that governments must act in the best interests of the people. When big corporations and finances begin tramping over individuals, if the Government has any heart it will prevent that from happening. One way to control such corporations is with tax leverage.
If one does not have the heart to tax big corporations and would rather slap a major part of the tax on the rank and file Canadian, one would have to be in the present Government because that is what it is doing.
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In order to have a fair tax system, it is necessary to tax the corporations. Only then will there be some equity in society.
The Government has the authority to impose regulations when big corporations get out of control, and certainly, with federal-provincial co-operation, that must be done in the best interests of the country when it is required.


Mr. Gilles Rocheleau (Hull-Aylmer):: Mr. Speaker, Bill C-11 is a bill which, in short, allows the Government to borrow up to $24.8 billion. It is worrisome, Mr. Speaker, to authorize the Government to borrow such amounts when we see how the Conservative Government is managing now.
Mr. Speaker, in recent months, I have noted some problem areas that cause Canadians concern-great concern. Allow me, Mr. Speaker, to relate some of these problems that are now surfacing and that cause us real concern.
I am pleased to note that the Minister of State for Finance (Mr. Loiselle) is here. I hope that he will be able to make some recommendations to his Government.
Mr. Speaker, just a few weeks ago, the Government was looking for about $500,000 to complete the fountains at the Canadian Museum of Civilization in my riding of Hull-Aylmer.
We must remember, Mr. Speaker, that this contract was awarded by the Government of Canada in late 1983 or early 1984. The Canadian Museum of Civilization was to cost approximately $90 million, according to estimates at the time. From the figures and estimates that we have today, Mr. Speaker, we learn that the Museum of Civilization will cost nearly $300 million, which is more that three times the estimates the Government agreed to in 1983.
What is worse, Mr. Speaker, is that after building this magnificent structure that was to open at the end of June, they had fountains installed at a cost of $5 million. Only a few days ago, Mr. Speaker, we heard that unfortunately, the fountains facing Laurier Street will not be operational when the Canadian Museum of Civilization is opened, because apparently, the Government has no money left to finish its museum project and
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is now asking, not the City of Hull but private companies to pay the cost of finishing the fountains.
Mr. Speaker, I think it is absurd that in order to finish a museum of this stature, the Government uses money from private companies without first calling for tenders.
I think there are some very serious questions that should be asked, and I think this warrants some serious discussion. I hope that my fellow Members, especially Members opposite from Quebec, will pay special attention to an item that appeared in the Budget of the Minister of Finance (Mr. Wilson) in April which concerns among other things the Transport Canada building. The issue has been brought up a number of times, Mr. Speaker, and I think we have given it a great deal of thought. Just a few weeks ago, a parliamentary committee asked the Minister of Public Works (Mr. Mazankows-ki) about this question.
Once again, I would like to draw the attention of the Government to its spending on Public Works. The Government claimed capital costs totalling $200 million on page 26 of the Budget of the Minister of Finance, and I have to tell the Government that is just not true. There is no capital cost involved in construction or eventual construction for Transport Canada, for which the federal Government had called tenders and had received them in December 1988. We know, Mr. Speaker, as the Minister of Public Works told us last week, that the lowest tender was $234 per square metre. All it takes is a pencil to figure it out, but if you find a saving in the construction cost for the Transport Canada building, I apologize to the House.
However, the Minister of Public Works informed us that his Government has decided to stay at Place de Ville in the Campeau building, at a cost of $315 per square metre, as of 1992, for a period of seven years, while the lowest tender was $234 per square metre, which is $81 per square metre less, or $7 million less per year. And when we consider that to stay in Place de Ville, the Government must be prepared to pay the full cost of removing asbestos panels, more than $50 million, plus the cost of repairing the heating system and other costs that may exceed $60 million. When that kind of licence is given, Mr. Speaker, I think the Official Opposition has reason to be concerned and, in fact, has a duty to be

June 19, 1989
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concerned on behalf of the Canadian people, when it sees this kind of poor management.
Mr. Speaker, these are just a few of the points I wanted to raise today, when we are being asked to approve a bill that would allow the Government to borrow $24.8 billion. If that is how the Government spends taxpayers' money, I think we are entitled to ask some serious questions, and I think the Official Opposition will certainly vote against this Bill.
Mr. Speaker, I could go on with some of the other problems that we are having with the investment of funds in public works and also in transportation. In the Outaouais, there is Highway 50 from Masson to Lachute. The National Capital Commission, through the Department of Public Works, had agreed to pay a major part of the cost of the road network in the Outaouais within it's jurisdiction. On the other hand, the previous federal government, as part of regional development spending, had agreed to pay part of the cost of the highway network, more specifically, of Highway 50 from Masson to Lachute and on to Mirabel via Highway 13, Mr. Speaker, and as I said, this was for the purposes of regional and also, of course, economic development.
Here again, the Government of Quebec has committed itself several times, and recently, the Minister of Transport, Marc-Yvan Cote, said that the Government of Quebec would agree to pay for Highway 50 from Masson to Lachute provided the federal Government contributed substantial financial assistance. I have referred to it several times in this House, Mr. Speaker. I made several requests to the Minister of Transport for him to include it in the next federal-provincial economic development agreement. I trust that the Minister of Transport of Canada and the Minister of Transport of Quebec will be able to agree to include this important highway on the Quebec side of the Ottawa River joining the Outaouais to downtown Montreal. So I think that it is a veiy important consideration, and again, when I see such huge amounts as $24.8 billion, I would hope that the Minister of Finance could find a few cents, a few hundred thousand dollars, if not a few million, to complete the work that they have already began in past years on the Quebec side of the Ottawa River.
Mr. Speaker, we were still talking about it at noon today, and I am rather concerned that, as the Minister of Transport was telling us again today, he was still waiting for a report from VIA Rail before he would know exactly what would happen to VIA Rail. I must tell you, Mr. Speaker, that today we had the mayors of large Canadian cities, including Quebec City, Windsor and some in Ontario. And it worries me when the Minister of Transport tells us that we are waiting for the report before the Government can deal with the issue and give the necessary authorizations or leave it to a fate that may be even worse than expected. I think that it is increasingly important to take account of a system that may be very expensive today when the investments that must be made in it are considered but that I think is still a system that should in future cost us less probably and be used more than it is today. It comes down to promoting it and knowing what you want to do with it! I think that our VIA Rail system at present is deficient and outdated and major investments will be needed if we want to improve it.
Mr. Speaker, I conclude with that and say to you that yes, I am certainly concerned about the way the present Government spends Canadians' money. I am even more surprised, Mr. Speaker, when we are told every day, and again today, in advertising paid for by the Government that Canadians have to tighten their belts because the deficit is around $30 billion and the debt is approaching $400 billion.
But when we see how the Government manages Canadians' money, we can be even more concerned about the management we are getting now.
I would hope, since we are at the beginning of a term-it is just a few months old-that the promises made to us, made to Canadians during the election campaign, will not all be set aside and that we won't be victims of such a striking example of Alzheimer's disease; that this Government won't forget everything that it promised now that the elections are over and that we won't see such drastic cuts in such important things as social services and unemployment insurance.


Ms. Ethel Blondin (Western Arctic):: Mr. Speaker, I am very honoured to rise to speak in this particular debate. We have had five years of unprecedented increases in tax revenues. This should have resulted in balanced budgets. However, government debt has risen to more than 90 per cent of the Gross Domestic Product. Canadians believed that the Government's budget would naturally cut government spending, but what we have seen in this Budget is the same old thing. In order to maintain prosperity and influence for themselves and their friends they have
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chosen to continue borrowing beyond their capacity and are making ordinary Canadians pay the bill.
Economists are saying that the Budget brings the worst of both worlds, that Government spending cuts are so weak that the deficit will actually be worse this year and there will only be a marginal reduction next year. Trying to reduce the deficit by sharply increasing taxes will increase inflation and slow growth. This will leave little room to reduce interest rates. Excuse the cliche, Mr. Speaker, because I mean it in the literal sense, but who in the world is going to have confidence in Canada now, in our dollar, in our fiscal policy, in our commitments?
Economists also say that the Government's forecast for 3 per cent growth is optimistic, that it will not be met this year and next year it will drop to 1.7 per cent. For every percentage that growth goes down, unemployment goes up, so next year is the big story and what will the Canadian public deduce when unemployment goes up over 8 per cent and interest rates go up and the deficit target cannot be met? What a loss of confidence and trust in a government responsible for the social and financial welfare of all Canadians, not only a select few.
Lack of confidence in the Canadian dollar is one thing, but it is the massive cut in foreign aid that sends the wrong message to the world that Canada does not care. Those of us on this side of the House do care and we say that if the Government wants to cut spending it should have tightened its own purse strings and not toughened its assistance to the world's hungry citizens. There was no conscience present when $360 million was cut from foreign aid. Foreign aid should have gone up 6 per cent with inflation, not cut.
Only half of the 28 government departments are even cutting staff, the rest are all hiring. The reduction of staff is half of 1 per cent. I bet the Public Service is laughing as a lot of people consider this spending to be a joke. It is really hypocritical that only four of the 28 government departments are actually planning to spend less this year than last. The Finance Minister's own Department has manoeuvred a whopping 20 per cent increase for this year.
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While the Deputy Prime Minister (Mr. Mazankowski) is cutting aid to farmers in agriculture, the Department will enjoy a 21 per cent increase. So much for a government that was allegedly worrying about big bureaucracy.
So what is this Budget all about? Let's talk about universality. The Government has eroded social programs. It has cashed in its portion of unemployment insurance for $2.9 billion. This affects all Canadians. This Budget destroys the principle of universality. The threshold of $50,000 for taxing back Old Age Security might be the magic number for today, but what about tomorrow when inflation eats away and the threshold becomes $40,000 and middle-income families will once again be paying the tab for the Tory grab.
The other universal income support program which has been abandoned is the family allowance. By 1991, with indexing included, a total of $800 million will be removed from the family allowance program. I would like to know why the Government would give a cheque to a Canadian if there is no benefit. The Minister of Finance (Mr. Wilson) says he has not denied access, and he is right, but he has denied benefit by his claw-back scheme and that is what has been ruined by his tactics. There is no more equal benefit and equal access for all Canadians. These measures are the thin edge of the wedge. Today it is the semi-rich who are affected but tomorrow it could be everyone.
The Tories have cropped regional development assistance and in the Northwest Territories they have not even considered an agency or a program to develop the northern economy. We are not part of the western diversification or any other agency. For three years northerners have been waiting for the Government to take some action, or at least to give some consideration to economic development in the north. More and more the Government is dividing this country. The gap is growing between the have and the have-not regions. The tax measures which hit those on the poverty line hardest put big business people ahead of Canada's most valuable resource.
I am sure you are aware, Mr. Speaker, of the oil and gas development that has been taking place in the Mackenzie Valley and Delta and offshore in the Beaufort Sea since the first quarter of the century. The Canadian Arctic has potential to make Canada energy

The Northwest Territories' economy is best viewed as two quite distinct economies. Most of the non-native population live in major centres whose economies are dominated by government or resource extraction activities. Average incomes are typically very high. Unemployment is very low. Those northerners will be adversely affected by the additional personal income tax and tax on old age pensions and family allowances, even though their cost of living is about 40 per cent higher than families of the same income living in Edmonton, for instance.
Conversely, most of the 30,500 people of Inuit, Dene or Metis ancestry, almost 60 per cent of the total population, live in small, widely scattered villages where Government transfer payments and traditional harvesting activities dominate a fragile economic base and where there are few prospects for growth. Average incomes are generally low, unemployment high and social assistance a fact of everyday life.
Unemployment rates reach 50 per cent or more in some of these communities and can no longer be readily dismissed as a native preference for traditional nonwage pursuits. Hunting, fishing and trapping as a fulltime occupation, even when possible, is no longer preferred by most native young people who are fast comprising the majority of the population, if only because they cannot earn sufficient income to purchase the material goods the modem economy provides. The new unemployment insurance scheme will negatively affect most of the residents of these native communities. Hunters and trappers will be hit by higher fuel costs.
Before this Budget, the western Arctic economy as a whole appeared to be emerging from a cooling off period after the boom of the early 1980s. This modest growth will quickly come to an abrupt halt as this Government's claw-back initiatives are felt.
The new telecommunication tax affects the western Arctic residents proportionately more than residents of the rest of Canada. Communication and transportation are the two most critical services northerners depend on. Both programs are going to be taxed beyond northerners limits to meet the multitude of increases this Budget demands.
The massive cut to the Canadian Broadcasting Corporation is sure to mean cuts in northern programming. People in the North depend on radio for vital informa-
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tion for their safety and in many cases for their survival. Whether people are on the land, in their camps, on the trap line or driving on a remote highway, they have a radio because they need to know the weather conditions, the thickness of the ice, the current of a river, the state of the road and the temperature. Communication is not a luxury for northerners. It is an essential service, a necessity for survival. When many of the communities depend on winter roads which depend on the thickness of the ice, it is a matter of safety.
The Secretary of State (Indian Affairs and Northern Development) (Ms. Campbell) did not stop with native communication. There have been cuts and reductions. There has not been any growth in the budgets that have been granted to the native communications for radio services to many of the native communities.
As far as transportation is concerned, it is the other crucial service to northerners. I have already said the land mass is about three and one-half million square kilometres.
This Budget's increase on airport taxes, aviation gasoline and fuel excise tax is going to cost northerners more than any other Canadians. Those of us who have lived in the western Arctic and who have strived to develop our resources, and realize its full potential, it is the development of the transportation systems which will open the North and give many communities a chance for fuller participation in the territorial economy.
The lack of adequate roads, airports, docks and harbours handicaps our economic growth. A better transportation system will create opportunities for mining, tourism, fishing, trade and travel between communities. Building, operating and maintaining new transportation routes and facilities will create jobs for years to come.
However, this Budget not only increases transportation for businesses and consumer costs but literally puts on the shelf future investment in transportation infrastructure. The expansion of the North's economy will be additionally crippled by the monstrous burdens which have been placed on small businesses.
Small business is the core to development. Small business is now strapped with having to pay more taxes, higher premiums for unemployment insurance, increased construction, transportation, utility, energy and inflation costs, as well as being at risk from high interest

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rates. This is all at a time when consumers are going to have less money to spend.
Other taxes will hit hard the northerners' pocket books: The federal sales tax increases to 13.5 per cent. We have tax increases on construction materials, telephone calls, cablevision, cigarettes, alcohol and on surtaxes for income.
Hunters and trappers in the North are hurt by the Government's elimination of the rebate on gasoline and the increase in the gasoline tax. As well, the North's taxpayers will benefit less from the enhanced sales tax credit, the only real tax reduction in the Budget.
These measures will have a disproportionate affect on the Northwest Territories residents. Since incomes are higher in the North to compensate for higher prices, there is a larger proportion of high income earners among the North's taxpayers.
We hear a lot from this Government about regional development and the role that the Atlantic Opportunities Agency, the Western Diversification Program and other agencies play in the regional economies. However, again, the North has been excluded. We do not belong to any agency or any plan which will directly assist with small business and economic development.
This Government has cut regional development assistance, and I cannot tell residents of the western Arctic whether they are affected or not.
Those agencies have been operating since 1987 and the North still has not been advised as to where we fit in. We are not asking for hand-outs, but we thought it was the Government's role to provide at least a foundation for the growth of individuals and businesses and to foster a climate which would encourage that growth. The climate which this Government is creating in the North is a climate of gloom. If you think this Budget restricts the development of the North's economic resources, that is a mistake, because it also inhibits the development of its most valuable resource, its people.


Joseph R. (Joe) Comuzzi: My question is for my friend and colleague from Western Arctic. Before posing a question, let me just mention to my colleague how important it is that she forms part of our group. Since we have been acquainted in this House, I as one Canadian have had the opportunity and privilege to learn through our friend from the Western Arctic about the lifestyle, tribulations and the ways of life of the people who live in the Western Arctic.
Because of my friend's in depth knowledge of the people whom she represents, she has come to this House and to our group, in particular, and told us on a regular basis about the areas of concern to the people in the Arctic and their hopes. This is within the framework of Canadian unity and democracy and within our love for the whole of Canada she has brought to us a perspective that I and many of my colleagues have not had the opportunity to appreciate or to fathom.
I am particularly interested in two areas. One is the area of universality and how it affects our social programs, programs for seniors, health care and the concept of these programs on all Canadians and on the people in Western Arctic.
Second is that of natural resources which the Western Arctic has in abundance and which only need to be developed.
I recall hearing a presentation from the Hon. Member for Western Arctic (Ms. Blondin) about our natural gas resources in that area. Perhaps she can tell us what she foresees as the future development for them and how they can be used for the rest of Canada and export.


Ethel Dorothy Blondin-Andrew: Mr. Speaker, with regard to universality, the Western Arctic is an area of high unemployment and high seasonal employment. Eligibility for the unemployment insurance program is an absolute necessity in that it basically accommodates the northern peoples. Because of the high unemployment rate many people could not afford to pay for their own medicare. Then there are social assistance programs. In many communities, because of the growing seasons and extraordinarily high cost of living, the northern peoples cannot afford to lose any of the social network programs.
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As for the resource development area, the Northwest Territories has gone through a series of boom and bust development. One was with the exploration in the Beaufort Sea in the 1970s and 1980s. An application has been put forward to the National Energy Board for a gas export permit. Many considerations have to be given to this. One is to weigh the economic benefit and the impact on the environment. Also, the territorial government has grown and matured. A Northern Accord has been devised enabling the territorial government to share in the management and revenues of any major development project.
The problem with major development programs besides the socio-economic impact is the fact that we northerners have a very high rate of illiteracy and we do not have the trained personnel or the training necessary to work in the best paid positions in a resource development megaproject.
We are working in a number of areas such as training. Another is the completion of the Northern Accord. The North is presently going through a situation where the Dene and Metis have an agreement in principle, are looking at selecting lands perhaps right in the corridor where the gas pipeline is to be built. So, there are a number of areas of consideration before an absolute resource development strategy is proposed and accepted by all northerners.


John Harvard: Mr. Speaker, I will try to be short. I deeply appreciate the remarks made by my colleague from Western Arctic. I have often listened to her since my arrival in the House and she always makes good sense.
I have had the pleasure in the past of visiting the Northwest Territories. When I go there, I am always struck by the beauty of the area and the vitality and friendliness of the people of that area. I would like to go back again. In fact, there is a possibility I may go this summer.
I want to make reference to a couple of points my colleague made in her remarks. One had to do with the high rate of unemployment. In some areas she mentioned that it runs from 60 per cent to 70 per cent to 80 per cent and to 90 per cent. I think those of us who live in the south and in the relatively affluent areas of the south find it difficult to relate to high unemployment figures of that kind unless you are familiar with some of the
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unemployment rates on Indian reserves here in the south.
The Hon. Member also mentioned the problems at the CBC, the cut-backs and what they might do to service in the North. I also want to point out that when I visited the North, I noticed the high cost of living. A quart of milk may cost $5, which is extraordinary. When you consider unemployment and the high cost of living on one side and on the other side the Government pulling out of the market-place and cutting back on services, what is the future for the North under this Government?


Ethel Dorothy Blondin-Andrew: Mr. Speaker, the high unemployment in the North results from a high incidence of illiteracy and untrained and uneducated people. It also stems from the fact that there is not an industrial strategy for the North whereby jobs are provided by having businesses in small communities. There is not that sort of strategy in the North and that is being dealt with by the Government of the Northwest Territories. The mobility factor comes into play when young people cannot finish their education and work in their communities because there are not the kinds of jobs for which they are trained.
The other factor that has been mentioned is the cuts in CBC programming. Throughout the history of the North, before it had a telephone system, there was a reliance in the remote communities on the CBC for information. An historical dependence has developed on CBC for communications and news which has to reach the communities.
This Budget will be very tough on the people of the North. It will be very difficult having a tax on everything with the already high cost of living in the North. With the high cost of construction material, rents will skyrocket. The taxes will go on things that already cost a great deal, including groceries. Generally, the people of the North have very large families and the Budget will have a direct impact on not just the communities and businesses but on the northern families as well.


Ian Gardiner Waddell: Mr. Speaker, with respect to the new proposed McKenzie Valley pipeline, the Hon. Member will be aware that Nellie Cournoyer who, 15 years ago, opposed the construction of such a pipeline before the Berger inquiry, is now in favour of it. Maude Barlow of the Council of Canadians has said that she is against it. In one or two sentences, can the Hon. Member tell me

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what her position is? Is she for or against the new proposal?


Ethel Dorothy Blondin-Andrew: Mr. Speaker, my position on this is somewhat burdened by a number of considerations, including considerations about the completion of the Northern Accord and the completion of Dene-Metis claims. Mr. Justice Thomas Berger in fact stated on April 18 or thereabouts at a True North Strong and Free Conference that the northerners have to decide for themselves whether they want this project or not. Perhaps 10 years ago, the people of the North needed someone like Mr. Justice Thomas Berger, but I think it is up to northerners to decide now.


Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, it is with a sense of gratitude to the Senate that we are having this debate. The Senate, in its determined fight in defence of parliamentary traditions and the parliamentary institution, last month reminded the Government of its obligation to come to Parliament when it needs to borrow funds. The Senate made a well-presented argument, an argument which has registered with the Government in more than one respect.
The Government is coming to the House seeking the authority to borrow with dirty hands, and perhaps one might even say with hands which are dripping with mud, particularly in environmental terms. The Government has contradicted itself on the environment and on sustainable development in so many ways that it is not fun any more.
Let us begin this brief analysis with the Speech from the Throne. One of the Government's main themes hinges on sustainable development which will be adopted as a policy thrust in the life of this session. A few weeks after the debate on the Speech from the Throne, the Minister of Finance (Mr. Wilson) came into the House with a Budget and stated that we will move ahead with important economic initiatives, including action to ensure that economic development occurs in an environmentally sound way. These are the key words of the Minister of Finance who had evidently read the Speech from the Throne and was determined to implement the spirit of the Speech from the Throne.
What has the Minister done since then? He promptly announced the closing of 12 conservation and renewable energy regional offices. As if that were not enough, he phased out the National Conservation and Alternative Energy Initiative program. As if that were not enough, he cut transfer payments to the provinces by some $340 million, possibly endangering reforestation and other joint environmental ventures.
As of today, up to six provinces are waiting for the renewal of their forestry agreements with Ottawa. Among them are Quebec, Ontario and British Columbia. As if that were not enough, having cut transfer payments to the provinces by over $300 million, the Minister cut $396 million from overseas development assistance, something which may also affect environmental programs abroad.
These measures scream out to heaven in their contrast with the proclaimed commitment of the Government to environmentally sustainable development, both in the Speech from the Throne and in the introductory speech made by the Minister of Finance in conjunction with the presentation of the Budget.
As if that were not enough, the Minister presented a document which ignored any form of tax measures, removal of tax impediments or introduction of tax incentives that would facilitate the process of embarking on this environmentally sustainable development proclaimed by the Government in the Speech from the Throne, in the Minister's introductory remarks and last year at the United Nations by the Prime Minister (Mr. Mulroney). When we looked through the Budget, we did not find any tax measures to improve accelerated capital depreciation allowances for pollution control equipment and machinery. We looked for tax incentives for industry to recycle. We looked for tax exemptions for energy efficiency. We looked for tax exemptions for conservation products and the like. We found none of them.
Having gone through that exercise, we said to ourselves that maybe the regime for cutting the deficit is so massive that it has been applied across the board in a savage manner affecting everyone and every sector and interest. We looked for an announcement that would indicate the Government's determination to find the $5 billion tied up with energy megaprojects. Do you think, Mr. Speaker, that we could find any reference to energy megaprojects in the Budget? We could not find one word
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about it. There are, as Hon. Members know, $5 billion tied up in the Oslo and Lloydminister projects as well as others. The application of the Budget in a selective manner which ignores the basic commitment to sustainable development is mind-boggling.
We all know that we are running out of time in relation to the question of climate warming. The scientific community is clearly on record indicating to us that we have to change trends and slow down the process of climate warming. The long-term cost of this trend is such that it requires action. Yet, having embraced the buzz-words, the Government seems unable to come to grips with the substance. The substance means abandoning the energy megaprojects because they will increase our dependence on fossil fuels in the next decades rather than decrease it.
It is inevitable that we have to concentrate on energy because of the intimate relationship between the environment, sustainable development and energy policies. It is quite interesting and revealing to read what the Solar Energy Society of Canada wrote in early May by noting the following:
Since the September cutbacks EMR officials have also been telling renewable energy firms seeking R & D funding to apply to the Unsolicited Proposals Program.
Do you know what happened to the Unsolicited Proposals Program, Mr. Speaker? It has been cancelled. It was the avenue for a number of Canadian firms, entrepreneurs and researchers to develop certain technologies in the field of renewable sources of energy. It has gone. So much for the commitment of the Government to sustainable development in environmental terms.
The Solar Energy Society asks:
Is the government deliberately trying to destroy the conservation and renewable energy industry? Why were energy "boondoggle" megaprojects, such as Hibernia, not cut?
That was not stated by the Official Opposition. That is a society in Winnipeg. It goes on to state:
Mr. Wilson refers to our children and future generations nine times in his budget speech.
What a record. We congratulate him. The letter further states:
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He also says that Canadians want a Canada able to meet priorities such as-the protection of the environment.
No wonder. The letter further states:
Until the Government stops paying lip service to conservation and renewable energy, environmental degradation will continue.
The letter concludes by stating:
Please raise our concerns in the House of Commons.
That is what we are doing today.
At the beginning of my speech I referred to the cuts of some $396 million to overseas development assistance. It is worth while to put on the record what Oxfam Canada wrote about it, in its own words, so they are not being interpreted as the fiction, the imagination, or interpretation on the part of the Opposition. This letter dated May 5 states:
The recently announced Budget provokes considerable concern in our organization. The sharp changing funding for Canadian foreign aid means added hardship for the world's poor, and significant abandonment of Canada's promise and obligations with partners overseas.
The overall approach of the Budget brings home to Canada and Canadians the sorts of "structural adjustment" policies which currently lead to mass suffering in many of the nations where our aid dollars are used.
This situation is not unknown to the Government of Canada or to parliamentarians. We note the recent declaration of parliamentarians from the G-10 countries, the ones who met in Amsterdam at the end of March, Mr. Speaker, drew attention to the urgent need for that reduction, and new concessional financing stating that while international and financial crises are currently avoided, the fundamental flaws are that the costs have been borne by the debtors causing general deterioration or stagnation and growing impoverishment for large segments of the population.
In this context, the deep cuts to official development assistance are significant in magnitude, disproportionate in share and objectionable in effect. Foreign aid is the only one of seven major areas of government spending which will actually have less money in 1989-90 than the last fiscal year.
I ask you to reflect on those comments, Mr. Speaker. A closer look at the Budget figures reveals that the over-all loss is compounded by a redistribution of funds away from direct help. Listen to this, Mr. Speaker, this is a beautiful one. The biggest increase in funds is to go to administration which will increase more than $100 million. Much of this increase is disguised by the transfer of funds to the budget of External Affairs to pay for the

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decentralization of CIDA staff. The same argument applies for other Budget increase items including public outreach and industrial co-operation.
The question asked at this point is, why should public relations, as distinct from ongoing development education, be increased while support for overseas projects is reduced? It is a good question. Why should industrial corporations whose benefit is arguably more oriented to Canadian business and middle-income countries be increased when people-to-people community-level aid is held static or reduced? This is a very distressing analysis by Oxfam Canada which is recommended reading for every parliamentarian.
I mentioned already what will happen to the national conservation and alternative energy initiative and conservation and renewable energy offices. They will be reduced by $8 million in 1989-90. The program is phased out, as scheduled, by the end of 1990-91. That is it, Mr. Speaker, so much for the commitment of the Progressive Conservative Government to conservation and alternative energy initiative. "Rest In Peace", is what can be written, unfortunately, on that tombstone. It is also interesting to inject in this debate the social consequences, and I will do so briefly. The Canadian Council on Social Development, in a one-page analysis, has one paragraph which merits repeating:
The federal budget does nothing to alleviate the poverty suffered by more than 2 million Canadian households-
As a result of this budget, a minimum wage worker making $10,000 per year will pay about $100 per year more in consumption taxes-
That is, Mr. Speaker, federal sales tax and others.
-$25 per year more in U.I. premiums and $12 per year more for
the income surtax-
Then we come to the analysis offered by the North-South Institute which, in a way, complements what Oxfam Canada has written on the subject. Here we find that the cuts in overseas development aid by $1.8 billion over five years are much larger and longer than earlier figures mentioned in the media, that of $800 million over three years. It is over five years and it is $8 billion.
The 1989-90 aid budget, despite only accounting for less than 3 per cent of government spending, is one of the smallest envelopes, which nonetheless bears a major part of the Government's spending cuts. The $360 million aid cut will cover 23 per cent of the Government's spending reductions of $1.5 billion in 1989-90.
You are pointing to me, Mr. Speaker, that my time is running out. Therefore I will conclude.
It seems to me that in coming to Parliament and seeking this borrowing authority the Government has to be consistent with itself. It has to prove to the Canadian public that its long-term plans and policies as expressed in the Speech from the Throne, which is basically a blueprint of the Government's intentions, are being carried out. That is the reason why we looked at the substance of the speech of the Minister of Finance to see how the Government would be tackling the question of implementing the sustainable development which was so highlighted in the Speech from the Throne. That is a legitimate expectation-not raised by us but by the Government. We looked at the way the Government saw itself implementing its policies through such an important instrument called the Budget and what we found was contradictions and denials of the main mandate that the Government has set for itself.
On energy alone there is an enormous vacuum that the Minister of Energy has failed to fill. We do not know at this stage what is the intent of the Minister of Energy in terms of Canada's commitment and role in slowing climate warming. All we know is that existing projects which will increase Canada's momentum in climate warming have been confirmed instead of having been turned around.
Evidently, Mr. Speaker, I have tested your patience to the limit of the time allocated, and I thank you.


The Acting Speaker (Mr. Paproski):: I enjoy listening to the Hon. Member. However, I regret that he has run about a minute or so over his allotted time.


Mr. Mark Assad (Gatineau-La Lievre):: Mr. Speaker, I just wanted some time to bring to the attention of the House a few points with respect to Bill C-ll, the borrowing authority Bill. When we see the amount of money that is going to be borrowed, $24.8 billion, how
June 19, 1989

can the average Canadian possibly understand what it means, let alone talk about the deficit which is a few hundred billion dollars? None of us will be strapped with it ourselves individually so we do not worry about it.
My colleague from Davenport explained some of the weaknesses of the Budget, be it in the foreign affairs envelope or environment. Needless to say, the record of the Government in the environment has been extremely weak, although it had a conversion like Saul did when he went to Damascus. However, nothing has really happened.
Our whole tax system has to be overhauled. It is such a complex system that no one really wants to tackle it, or else there are too many vested interests protecting the system as it is. Far be it for me to say who is right and who is wrong about the whole tax system. I am not an expert in the tax system. I guess that few people are. However, there are basic principles that were brought out many years ago by the Carter Commission which started in 1967 under the late Right Hon. John Diefen-baker. It was a a great initiative on his part that there should be a Royal Commission into the tax system. It took many years before the Carter Commission could write up its conclusions. Unfortunately, the document, as credible as it was, was never published. It was used at Harvard University and in Scandinavian countries as a basis for seeing how a comprehensive and just tax system could be implemented. The document was remarkable. I say in this House that Kenneth Carter is probably one of the unsung heroes of Canada.
The basic principles he outlined would make the tax system fair and equitable for all Canadians. However, some 25 years later, if we look at the tax system and the deficits that are being accumulated, it is obvious to any Canadian that something is drastically wrong. Nonetheless, we go on without a deep reform of the whole tax system.

Mr. Speaker, I said that about 25 years ago, a study was made of the taxation system in Canada, and that we have never really wanted to come to grips with the problem. Hon. Members opposite have heard it all before: The rich don't pay taxes! It may be just an expression, but if we look at the taxation system in Canada, there is a great deal of truth in it. Incredibly so, in fact. When we see the advantages for the financial elite in our country, we have
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to conclude that the wealthy in this country do not pay their fair share.
I believe, Madam Speaker, as the Carter Commission pointed out 25 years ago, that there is a way to be fair and equitable towards all Canadians. There is an expression that was very apt at the time, but unfortunately, it wasn't taken seriously-

Mr. Speaker, you probably remember the expression of that time: "A buck is a buck". No matter how it was earned the Government had a right to tax it. However, over the years we have seen loopholes in the law. They are loopholes that are not a mysteiy and that were dictated by the financial leaders of Canada. The Minister of Finance had to go along with some of their requests. I become impassioned on this issue. There are but a few Members of this House who have gotten up to point a finger to say that the financial elite in this country used the tax system to their benefit to the disregard of the middle class. I read a book which influenced me greatly. It is one by Linda McQuaig. She now works for The Globe and Mail. It is entitled Behind Closed Doors. It was translated into French. I have been told that it is a good translation.

The French title is La part du lion. The book shows how in the past 25 years, Ministers of Finance have been increasingly pressed to hand out tax benefits. To whom? Not to the middle class but to the financial world, which has never paid its fair share. I say the time has come to take another look at the basic principles proposed by Kenneth Carter in the report of his Royal commission of inquiry on the subject.

For anyone who is interested it is a complicated affair, that is for sure. There is no doubt that if anybody wanted to sit down and look at the tax laws obviously one would have to be a lawyer because it is so involved. However, no one can make me believe that with common sense we cannot get to the basic principles. What Canadian would not agree that the most fundamental principle in a democracy is that it would be fair and equitable? But the fact is that it is not. Is it any surprise that after all these years we have a deficit that is getting out of proportion? When we compare our population of 27 million to the United States with well over 240 million, our deficit on a

June 19, 1989
Borrowing Authority
per capita basis is twice as high. There is no mystery that something in our system is flawed.
It is time that we woke up to this problem. I hope to see the day when the average Canadian, especially the middle class which is the backbone of this country, will ask each and every Member of Parliament what their role is to ensure that the tax system is fair and equitable. There is no other way to make it work than for the majority of people to call upon their individual representatives to sit down and find a way to make the tax system fair and equitable. We are not asking for any more.

Mr. Speaker, this has been a particular concern of mine for years, and after lunching from crisis to crises, in time we will have to take a much better look at what happens in a country with a deficit that is out of control, and realize that our tax system is far from being fair and equitable.
We should take a look at the problems we will be facing in the next few years. In only a few years, after what happened in Saint-Basile-le-Grand, the environment has become an extremely important issue. It has become the most important issue in our daily lives, and rightly so. Maybe this should have happened 20 years ago, but at least it did happen, and we are thinking about it, and we will have to keep on thinking about it. However, it is going to take a lot of political will and public funds to solve the problem in the years to come.
The other problem is municipal infrastructures. [English]
I want to deal with the question of infrastructure. We are beginning to see that as a result of years of neglect, our roads, bridges and other infrastructure are deteriorating rapidly.
A couple of years ago a professor from Cornell University estimated that the repairs to the infrastructure in the United States, which he considered to be in an alarming state of deterioration, would cost approximately $500 billion just to bring it to a reasonably safe level. A couple of weeks ago we met with the Mayor of
Quebec, who is president of the Union des municipalites de Quebec. They anticipate that they will not be able to absorb the amounts needed for the maintenance of the municipal infrastructure.
During the last election the Liberal Party of Canada stated that we need massive expenditures in sewage treatment. There is an increasing volume of letters on this matter. I know that in my constituency, mayors are asking me if there is any possibility for some help to the municipalities for their infrastructure.
We know that in the future Canadians will be asking Parliament for this help because it is the Government of Canada that has the most powerful borrowing authority, as illustrated by this Bill in which the Government is asking for $24.8 billion, and perhaps more.
The provinces are having difficulty because of the Government's policies. They must absorb many of the expenditures and as a result of the deficit we will be in a very difficult position to help the provinces, let alone the municipalities that need assistance with their infrastructure.
I recommend Linda McQuaig's book Behind Closed Doors. While it is not gospel, it provides a basis for everyone to at least recognize that it is time for us to consider total reform. We were given a tremendous example 25 years ago and those principles still hold true today. Let us look at that again and perhaps in the years to come we will see this reform as part of the solution, along with the constraint in spending that we will have to impose upon ourselves. Perhaps we will have a just and equitable tax system for all Canadians that we can say we developed through a tremendous amount of political will and in spite of pressures against reform.


John Harvard: Mr. Speaker, my hon. colleague talked about taxation and the need for reform. I think we all realize that there is great need for reform.
He mentioned Kenneth Carter as being the unsung hero in this country. I would like him to expand on what he meant by that.


Mark Joseph Assad: Mr. Speaker, the Kenneth Carter Commission was established by John Diefenbaker in 1963. It was a Royal Commission into the tax system to see if there could not be a more comprehensive system.
June 19, 1989

While the process was very complicated, he could see how it could be simplified. The purpose was to develop a fair and equitable tax system.
Mr. Carter felt that a salary, investments, all forms of revenue would be taxable.


John Harvard: A buck is a buck.


Mark Joseph Assad: A buck is a buck, as I said to the Speaker. The basic principles he came up with 25 years ago still exist today.
I repeat that he was an unsung hero in this country. He was a man of integrity. He did a great service to this country and we did not even know it.
I have begun to look into his study. This issue required a tremendous amount of work and it takes someone with a great knowledge of the system to understand it. He was attempting to simplify it. The basic political will that we must have is to make it fair and equitable. I am sure that that is all any Canadian wants of us.


Ian Gardiner Waddell: Mr. Speaker, it seems that for most of my adult life the Liberals were in power in Ottawa. The man that you spoke of from the Carter Commission said a buck is a buck and should be taxed as such. Why was that not implemented? Why are we getting Liberals saying that we have this unfair taxation system? The Member put it very eloquently. There are people in this country who are not paying their fair share. Well, welcome aboard. Come over and sit with the New Democrats. That is what we were saying in the last election and before that. I will ask the Hon. Member two questions: One, do the Liberals not take some responsibility for the fact that we have this big deficit as a result of the mismanagement of the economy? Why did they not implement all those good ideas if they were so great? Why did they not implement them? Let us not have this hypocrisy here. Let us have some truth.


Mark Joseph Assad: Mr. Speaker, I do not think that we need any lessons from the NDP.


Ian Gardiner Waddell: Answer the question.


Mark Joseph Assad: I will answer his question. As I look to the period of that Royal Commission that was established by the late John Diefenbaker, and at the attempts made under the Minister of Finance, Mr. MacEachen, to
Borrowing Authority
correct some of the inequalities in his Budget of 1979-am I correct, Mr. Speaker?


Mr. Mills:: 1981.


Mark Joseph Assad: I believe at that particular time there was some difficulty with his Budget. There was a tremendous amount of pressure, and he had to put aside some of those things that he felt were fair and equitable. In answer to your question, I agree that the Liberal Party at that time did not implement some of the things they could have, but nevertheless it does not change the fact that we consisted of 284 Members in this House and our job was to make sure that the tax system was fair and equitable.
Today with the knowledge that we have, and knowing that it takes problems to bring things to a head, I agree that a reform is needed in the whole tax system. I am not trying to whitewash the Party that I have the honour of belonging to in this House, but nevertheless we are all Members here. We all represent average Canadians. I am sure that there is no one in this House who can get up and tell his constituents that this is a fair and honest tax system no matter what Party you represent. A buck is a buck and the facts are the facts and you know them as well as I do, no matter what Party you represent, be it our pseudo-socialists at one end or the Conservative Party across the way. We all have obligations toward our fellow Canadians. If you can find a constituency where they disagree with what I have said today I will retract it all.


Stanley J. Hovdebo: Mr. Speaker, I will take this opportunity to speak on the borrowing bill. The most chilling part of the Budget that we have been faced with in the last month or so is the fact that it intends to tax every area in which we as Canadians have been operating, where we have been transferring money and goods. It is a major tax grab, but a tax grab which the Government said was necessary because it had to deal with the deficit. Besides the tax grab, the Government has said that it is spending far too much in certain areas and therefore it has to cut back. It is cutting back on old age security, family allowance, cutting back wherever it can. In so doing, it is changing the fabric that has made Canada the kind of country that it is.
We have on one hand a major tax grab and a major cut of services. The reason given for this change was that it was a means of dealing with the deficit. What really happened? Instead of making a major impact on the deficit, it is as high as it ever was and we continue to accumulate a considerable amount more each year, at this time probably close to $30 billion or more. In the process, we have pushed the national debt or the

June 19, 1989
Borrowing Authority
accumulated deficit, whatever you want to call it, up to something over $300 billion. It has become a major factor in the expenditures of this country. Are we to believe that by increasing the taxes and reducing the services that this country has looked at all the possibilities of reducing the deficit, if it is so necessary to do, and the Government claims that it is.
We should perhaps talk a bit more about what I like to call the four phases of the Minister of Finance (Mr. Wilson). If you look back through the last year, you will find that the Minister of Finance and his Government-I cannot blame it all on the Minister of Finance-have had four different decisions. There was the pre-election decision which was: "We have done such a great job of the economy and in directing the country that we have no real problem. Perhaps there is a little deficit there, but let us not worry about it. We are doing so well that we do not need to worry about it. The country has turned the comer. Our policies have pushed the country around the comer. We have all of these good things that we are going to give you, such as a major child care program and drought relief. We are going to support agriculture so that farmers can be sure they are going to get some returns." All of these were part of the pre-election phase, number one.
Then the election came along, which is phase number two. "The deficit is no longer a problem. All the things that we said we were going to do and did not do because money was short, because of the bad job that the Liberals did in governing the country, because of the wastage, and all the things that the Nielsen Report was supposed to do for Canada, we are going to do. We do not have any problems any more. Just put us back into power and we will give you child care and $800 million worth of drought relief." That was phase number two.
Then we got out of that election. The Government was returned with a reduced majority, but they were returned, and we have a post-election, pre-budget period during which the Government and the Minister of Finance suddenly rediscover the deficit. The Minister told us that none of the projects that the Government had been planning and promised-remember this was the Government that had been in place before the election-to do during and before the election were possible now because all of a sudden the deficit was so
important that it could do nothing. Everything that the Government had promised during the election would have to go by the board because the deficit is so large that it has to do something about it. I told you what they did about it, they increased taxes, reduced services and increased the deficit. Face number three, the post-election, pre-Budget period.
Let us look at face number four, the Budget. What did the Minister of Finance do in the Budget? He said that we cannot afford any of these things, that we will have to step back and curtail economic growth, we will have to accept more unemployment, we will have to accept higher interest rates, we will have to curtail economic growth until it hurts. The most chilling factor is that we are still going to have a $30 billion deficit, that we are still going to push the accumulated deficit to over $300 billion, and we are still going to be paying a high interest rate on that accumulated deficit.
The reason for all of this did not go away and it is not predicted that it will go away in the next four years. Therefore we find ourselves here now debating, not the four faces of the Minister of Finance, but the result of what the Government has been doing for the last four years which was assisted in this direction by the previous Government.
The Budget is attacking universality, although I know the government side will say that they are not attacking universality, that everyone is going to get their pension and everyone is going to get their family allowance. However, they are attacking universality in the sense that old age pension, which has been considered a right by all people across Canada regardless of class or category, will be clawed back from people in a particular category.
I would think that before very long after this goes into effect someone will challenge the Government on this as it is discriminatory. If my friend from Vancouver and I each make $50,000 but part of my income comes from an old age security cheque, I will be taxed more than him. I think the time is coming when someone will challenge that and the Government is going to lose. Although this may not be a direct attack on universality, certain people will not receive retirement benefits when they reach the
June 19, 1989

age of 65. The same will happen with regard to family allowances.
We have prided ourselves over the years on putting in place a safety net for the people of Canada. That net meant that if people got sick or found themselves without a job, there would be a worth-while and effective net in place for which they had paid. That safety net is being attacked. We should be most cognizant here of the fact that this is the beginning of the attack. We cannot be secure in the knowledge that the Government will not do more next time. It attacked the universality of the Old Age Security and the family allowance. It changed the structure of unemployment insurance so that it no longer resembles the insurance that we had.
Where will this end? This should be our major concern. Will it reach the point that if you can afford it you will have to pay for the schooling of your grade school and high school-aged children? Is it going to reach the point that if you are rich enough medicare and hospitalization will be your responsibility, that the Government will not maintain that kind of a net? Will there be a further change in the attack on family allowance and Old Age Security next year so that if you earn $30,000 you will have it all clawed back and the year after that if you earn $20,000 you will have it all clawed back until no one gets Old Age Security if they are getting a minimum wage? Will it stop at unemployment insurance? We do not know where it is going to stop.
Our Party has always felt that we have a responsibility to let the Government know that it had alternatives to reduce the deficit, that it could be reducing the amount that the accumulated deficit is costing us. We do not believe that our only duty is to oppose. We believe that we should also point out the weaknesses in legislation and the alternatives available to the Government. We have a different philosophy and different ideology than does the Government or the Liberal Party. We work from a base which we believe to be the best for the people of Canada. We recognize that the ideas which we put before the Government now and in the past are good ideas. I point to the social fabric of the country as proof of that. The ideas which have built the basic social fabric of the country were ideas which our Party or our predecessors put before previous Governments. I speak
Borrowing Authority
of old age security, health care and family allowance, to name a few. Part of the social fabric of the country was formed as a result of ideas and structures which this Party put before this Parliament many years ago.
When I first came to this House, the Member for Winnipeg North Centre at that particular time, Stanley Knowles, told me, when I was very disgruntled at how little impact we were having, that we do have impact, that every one of the programs that I am now speaking about were private Members' Bills put before this Parliament 30 years ago.
The Government seems intent on tearing the social fabric which the people of Canada have put in place and supported. What can the Government do? It can do a lot. As I pointed out to one of the earlier speakers, there have been over 1,000 foreign and domestic acquisitions in Canada in the last year. Those acquisitions have done nothing to increase the number of jobs that we have. In fact, if anything, they have decreased the number of jobs.
We have in Canada the highest concentration of corporate power of any industrial country in the world. The top 1 per cent of the enterprises control almost 80 per cent of the assets in Canada. Nine families alone control 46 per cent of the value of all the shares in the largest 300 corporations in Canada that are traded on the Toronto Stock Exchange.
We have this kind of a structure in Canada. The policies of this Government are further increasing this kind of structure. Every time we allow a corporate merger or a corporate take-over, we lose. We lose, particularly if it is a foreign take-over. We also know that in the last three years we have experienced in Canada a deficit of interest and dividend payments of over $15 billion annually.
What I am talking about is that $15 billion of interest and dividends earned in Canada have left Canada to go to other nations. Fifteen billion dollars, which is half of our deficit this year. Every time we allow a merger, we increase the amount that will leave the country. Where does it end, when we are 100 per cent owned by corporations other than Canadian corporations, so that every dividend that is paid in country leaves this country

June 19, 1989
Borrowing Authority
and we become mainly a country with large and successful huge corporations which we do not own.
When the Swedish Government found that they had increased from 7 per cent to 7-1/2 per cent of their corporations foreign owned, they had a huge debate in the parliament in Sweden. The basis of that debate was, should we put in place certain restrictions which would limit the amount of foreign ownership. All of these things are ways in which this Government can start looking and dealing with the problems of deficit if it thinks it is so important that it do so.
I talked about mergers. Let us talk about one other issue in the financial structure. The Government keeps telling us that on one hand it cannot change the interest rate, that it is important that the interest rate be set by the market. The director or the president of the Bank of Canada is under the auspices of the Government, and if you do not believe it, go and ask John Diefenbaker. He made the Bank of Canada become subservient to the Parliament of Canada. This particular Government does not seem to think that that would work. If we reduce the interest rate by 1 per cent, we would reduce the deficit by $1.5 billion. We have the power to do it.
There are alternatives which this Government can look at and can use to reduce the deficit and do what it says is so important that it do. However, it is unwilling to do it because it does not direct the direction of our economy. It is done by somebody outside of the Government. Those mergers and those large corporations have more power than this Parliament.I think that is a veiy sad state of affairs.


The Acting Speaker (Mr. Paproski):: Questions or comments. Debate. The Hon. Member for Winnipeg- St. James.


John Harvard: Mr. Speaker, I welcome the opportunity to take part in this debate. It gives me the opportunity to put some of my views on record. I think that the Government in its preoccupation with deficit reduction runs the risk of throwing the baby out with the bath water. Let me try to explain that.
If we go back to the election day, November 21, 1988, what we have witnessed is an unprecedented barrage of Government propaganda. After the election was completed, the Government put its propaganda wheels in motion and those wheels have been running at unbelievably top speed ever since. Canadians are sensitized to
this matter of deficit reduction. I think that most Canadians appreciate that the deficit is a problem. However, we have to be careful. As I said earlier we cannot throw the baby out with the bath water.
Let me, if I can, touch on a couple of areas. First, the CBC, the Canadian Broadcasting Corporation.


Some Hon. Members:: Oh, oh!


John Harvard: Well, you can perhaps make fun of the CBC, but I will tell the Hon. Members, it is a fundamental service in this country. We cannot do without the CBC.


Some Hon. Members:: hear, hear!


John Harvard: I will remind the Hon. Members, and I will remind my colleagues from Calgary and from Selkirk, that it was a Conservative Government that started the CBC, it was Tories who started the CBC. It was people like R. B. Bennett who realized that we could not run this country and this country could not survive without the CBC.
All we have to do is check the records. In fact, the late Prime Minister, the Prime Minister of that period going back more than 50 years, made some very, very eloquent speeches in defence of establishing a public broadcasting system in this country. Do you know why, Mr. Speaker? I will tell you why, because back in the 1930s when television was not around but radio was,listen to this, the Canadians in those days, yes, even Tories, were concerned about American influence. They were concerned about the incursion of American programming into this country. They decided to do something about it. They set up the CBC. It is one of the smart things which the Tories did in this country. They established the CBC.
Over the years, the CBC has done a tremendous job and established a world-wide reputation. The Canadian Broadcasting Corporation is known as one of the best networks, bar none, anywhere in the world. In fact, there are professionals in the broadcasting field, Mr. Speaker, who will tell you that the CBC is the best. It is not No. 2 and it is not No. 3. It is the best, even ahead of that well known famous BBC in Great Britain. That is the kind of reputation which the CBC has. It is that kind of service provided by the CBC and that kind of reputation of the CBC that is in danger now because of the cuts which are proposed in the Budget of the Hon. Minister of Finance (Mr. Wilson) of a couple of months ago. Unfortunately,
June 19, 1989

over the years, and perhaps because the CBC did such a great job, the CBC was just simply taken for granted.
For a while, back in the 1940s and 1950s before the private sector got its act going, particularly on the television side, the CBC was really the only act in town. It was really the only show in town. People just took it for granted. Now, because of the advent of private sector television and radio-and they have been in the game for a long time-the CBC needs support. It cannot be taken for granted any more. That is why those of us who are so strongly in favour of public broadcasting have come to the defence of the CBC. The CBC is an endangered species because of this Government.
Let me tell you something, Mr. Speaker. In the Budget of the Hon. Minister of Finance there are proposed cuts over the next four years neighbouring about $140 million. Do you know what that would do, Mr. Speaker? First, it would make the CBC unrecognizable. In fact, that is not my word. That is a word used often, since the Wilson Budget, by no less than the President of the CBC.


The Acting Speaker (Mr. Paproski):: The Hon. Member for Winnipeg-St. James (Mr. Harvard) will have 15 minutes left in his debate, plus 10 minutes questions and comments.


ALLOTTED DAY, S.O. 81-WEST COAST SALMON AND HERRING INDUSTRY
[Stage Direction]
The House resumed from Thursday, June 15, consideration of the motion of Mr. Stupich:
That this House reaffirms the Government's pledge to the West Coast salmon and herring industry to "not allow jobs, historically established, to be threatened" by any Government response to GATT rulings.
The Acting Speaker (Mr. Paproski):: It being six o'clock, pursuant to the order made on Thursday, June 15, 1989 and Standing Order 45(6), the House will now proceed to the deferred divisions on the business of supply.
Supply
Call in the Members.


The Acting Speaker (Mr. Paproski):: I declare the motion lost.
Pursuant to Standing Order 45(6) the House will now proceed to the taking of the deferred divisions at the report stage of Bill C-2, an Act to establish the Canadian Transportation Accident Investigation and Safety Board and to amend certain Acts in consequence thereof.
*
*


CANADIAN TRANSPORTATION ACCIDENT INVESTIGATION AND SAFETY BOARD ACT
[Stage Direction]
The House resumed from Friday, June 16, consideration of Bill C-2, an Act to establish the Canadian
Transportation Accident Investigation and Safety Board and to amend certain Acts in consequence thereof, as reported (with amendments) from the Standing Committee on Transport; and the motion of Mr. Benjamin:
Motion No. 5
That Bill C-2 be amended in Clause 4 by striking out lines 10 to
13 at page 6 and substituting the following therefor:
"as full-time members persons who, in the opinion of the Governor in Council, after consultation with members of the transportation industry, are knowledgeable about one or more of the following modes of transport:
(a) air transportation (b) marine transportation (c) rail and commodity pipeline transportation."
The Acting Speaker (Mr. Paproski):: Accordingly the first question is on Motion No. 5. Shall I dispense with the ringing of the bells?


Some Hon. Members:: Agreed.


Nelson Andrew Riis: I rise on a point of order, Mr. Speaker. Perhaps you will find that there is unanimous consent to apply the vote that we have just taken on the opposition day motion to Motions Nos. 5, 6, 7, 8, 9, and 10.


Jean-Robert Gauthier: I take it that the NDP are not voting for Motion No. 11. We are.


Miss Grey:: Mr. Speaker, I am in favour of Motions Nos. 5, 6, 7, 8, and 10. I am opposed to Motions Nos. 9 and 11.


Mr. Tobin:: Mr. Speaker, as the sponsor of the motions that stand in the name of the Liberal Party, we agree with the proposition made by the NDP House Leader to apply the vote taken earlier on the opposition day motion to all the motions proposed today, with the exception of Motion No. 11 with respect to which the NDP will oppose.


Mr. Benjamin:: Mr. Speaker, you can record me as voting in favour of Motion No. 11.


Some Hon. Members:: Hear, hear!


The Acting Speaker (Mr. Paproski):: Does the House agree that the division just taken be recorded as applying to Motions Nos. 5, 6, 7, 8, 9, and 10?


Some Hon. Members:: Agreed.


The Acting Speaker (Mr. Paproski):: Accordingly the first question is on Motion No. 5.
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Accident Investigation


The Acting Speaker (Mr. Paproski):: I declare the motion lost.
The next question is on Motion No. 6. Mr. Benjamin moved:
Motion No. 6
That Bill C-2 be amended in Clause 5 by striking out lines 38 to 43 at page 6 and lines 1 to 11 at page 7 and substituting the following therefor:
Members
Anderson
Atkinson
Beatty
Bernier
Bird
Blenkam
Bouchard (Roberval)
Bourgault
Brightwell
Campbell (Vancouver Centre)
Charest
Cole
Cook
Corbeil
Cote
Crosbie (St. John's West)
de Cotret
Dick
Domm
Andre
Attewell
Belsher
Bertrand
Bjomson
Bosley
Bouchard (Lac-Saint-Jean)
Boyer
Browes
Chadwick
Clark (Brandon-Souris)
Collins
Cooper
Corbett
Couture
Darling
Desjardins
Dobbie
Dorin
"5.(1) The Governor in Council shall appoint one Chairperson who shall have demonstrated an understanding of the role of an investigatory body, have knowledge of law and due process and not be an expert in any individual mode covered by this Act.
(2)	The Governor in Council shall, in consultation with the Board, designate one Member to be the Vice-Chairperson of the Board.
(3)	The Chairperson is the chief executive officer of the Board and subject to paragraph (a) hereof, shall have the responsibility for the administration of the Board and such powers and duties as are delegated to him by the Board.
(a) In exercising the powers conferred on him by subsection 5(1), by the Public Service Employment Act and Financial Administration Act,

June 19, 1989
Accident Investigation
the Chairperson is subject to and shall act in accordance with the general policies, resolutions, rules and regulations of the Board.
(b) In the event of the absence or incapacity of the Chairperson, the Vice-Chairperson has and may exercise and perform all the powers of the Chairperson.


The Acting Speaker (Mr. Paproski):: I declare the motion lost.
The next question is on Motion No. 7. Mr. Comuzzi moved:
Motion No. 7.
That Bill C-2 be amended in Clause 5
Allmand
Anawak
Arseneault
Axworthy (Saskatoon-Clark's
Barrett
Bellemare
Berger
Blackburn (Brant)
Boudria
Callbeck
Catterall
Comuzzi
Crawford
Dionne
Ferguson
Flis
Foster
Funk
Gauthier
Grey (Beaver River)
Harvard
Hopkins
Hunter
Karpoff
Kilger (Stormont-Dundas)
Langan (Mission-Coquitlam)
MacAulay
Manley
Marleau
McGuire
Mifflin
Mills
Nystrom
Parker
Phinney
Proud
Robinson
Samson
Skelly (Comox-Alberni)
Stupich
Tobin
Waddell
Whittaker
Young (Gloucester)
++NAYS
Members
(a) by striking out line 43 at page 6 and lines 1 to 3 at page 7 and substituting the following therefor:
Anderson
Atkinson
Beatty
Bernier
Bird
Blenkam
Bouchard (Roberval)
Bourgault
Brightwell
Campbell (Vancouver Centre)
Andre
Attewell
Belsher
Bertrand
Bjomson
Bosley
Bouchard (Lac-Saint-Jean)
Boyer
Browes
Chadwick
"responsibility for"
(b) by striking out lines 6 and 7 at page 7.


The Acting Speaker (Mr. Paproski):: I declare the motion lost.
The next question is on Motion No. 8. Mr. Tobin moved:
Motion No. 8
That Bill C-2 be amended in Clause 12 by adding immediately after line 12 at page 11 the following:
"(3) At meetings of the Board convened for the purpose of discussing a specific transportation occurrence, at least one member of the Board shall be qualified in the mode of transportation which is the subject matter of the occurrence.


@Acting Speaker: I declare the motion lost.
The next question is on Motion No. 9. Mr. Tobin moved:
Motion No. 9
That Bill C-2 be amended in Clause 19 by adding immediately after line 33 at page 19 the following:
"(17) An employee statement obtained pursuant to a collective agreement is privileged, and no person shall have access to such statements, except as authorized in writing by the person who made the statement.


The Acting Speaker (Mr. Paproski):: I declare the motion lost.
The next question is on Motion No. 10. Mr. Tobin moved:
Motion No. 10
That Bill C-2 be amended in Clause 24 by adding immediately after line 36 at page 22 the following:
"(3) The Board shall append to the final report any recommendations made in the draft report but not included in the public report, and recommendations and comments made by the Minister of Ttansport or any other Minister or observer designated as such under 23(2)(d)."


The Acting Speaker (Mr. Paproski):: I declare the motion lost.
The next question is on Motion No. 11. Mr. Tobin moved:
Motion No. 11.
That Bill C-2 be amended in Clause 32 by striking out lines 19 to 25 at page 31.	
The House divided on the motion, which was nega-	
tived on the following division: (Division No. 39)
 YEAS Members	
Allmand	Anawak
Arseneault	Assad
Baker	Belair
Bellemare	Benjamin
Berger	Bevilacqua
Blondin	Boudria
Caccia	Callbeck
Campbell (South West Nova)	Catterall
Clancy	Comuzzi
Copps	Crawford
Dingwall	Dionne
Duhamel	Ferguson
Flis	Fontana
Gauthier	Gray (Windsor West)
Harb	Harvard
Hopkins	Jordan
Keyes	Kilger (Stormont-Du ndas)
LeBlanc (Cape Breton Highlands-Canso) MacAulay	
MacLellan	Manley
Marchi	Marleau
McGuire	Mifflin
Milliken	Mills
Pagtakhan	Peterson
Phinney	Pickard
Proud	Rocheleau
Simmons	Stewart
Tobin	Vanclief
Wappel Young (Gloucester)-57	Wood
 NAYS Members
Althouse	Anderson
Andre	Angus
Atkinson	Attewell
Axworthy (Saskatoon-Clark's Crossing) Barrett	
Beatty	Belsher
Bernier	Bertrand
Bird	Bjorason
Blackburn (Brant)	Blenkam
Bosley	Bouchard (Roberval)
Bouchard (Lac-Saint-Jean)	Bourgault
Boyer	Brightwell
Browes	Campbell (Vancouver Centre)
Chadwick	Charest
Clark (Brandon-Souris)	Cole
Collins	Cook
Cooper	Corbeil
Corbett	Cote
Couture	Crosbie (St. John's West)
Darling	de Cotret
Desjardins	Dick
Dobbie	Do mm
Dorin	Fee
Feltham	Ferland
Fisher	Fontaine
Friesen	Fulton
Gardiner	Gerin
Gibeau	Gray (Bonaventure-fles-de-la-Madeleine)
Greene	Grey (Beaver River)
Guilbault	Gustafson
Harvey (Chicoutimi)	Harvey (Edmonton East)
Hicks	Hogue
June 19, 1989

Holtmann	Homer
Homing	Hovdebo
Hughes	Hunter
Jelinek	Johnson
Joncas	Jourdenais
Karpoff	Kempling
Kilgour (Edmonton Southeast)	Koury
Kristiansen	Landry
Langan (Mission-Coquitlam)	Langlois
Larrivee	Leblanc (Longueuil)
Lewis	Loiselle
Lopez	MacDonald (Rosedale)
MacDougall (Timiskaming)	Malone
Marin	Martin (Lincoln)
Masse	McCreath
McCurdy	McDermid
McDougall (St. Paul's)	McKnight
McLaughlin	McLean
Merrithew	Mitchell
Mitges	Monteith
Moore	Nicholson
Nowlan	Nystrom
Oberle	O'Kurley
Parker	Plamondon
Plourde	Pronovost
Redway	Reid
Reimer	Ricard
Richardson	Riis
Robinson	Roy-Arcelin
St-Julien	Samson
Scott (Hamilton-Wentworth)	Shields
Siddon	Skelly (Comox-Alberai)
Sobeski	Soetens
Sparrow	Stevenson
Stupich	Tardif
Taylor	Tetreault
Thorkelson	Tremblay (Rosemont)
Tremblay (Lotbiniere)	Tbraer (Halton-Peel)
Valcourt	Van de Walle
Vankoughnet	Venne
Vezina	Vien
Vincent	Waddell
Weiner	Wenman
White	Whittaker
Wilbee	Wilson (Swift Current-Maple Creek-
Assiniboia)	Young (Beaches -Woodbine) -153


The Acting Speaker (Mr. Paproski):: I declare the motion lost.


Benoît Bouchard: that the Bill, as amended, be concurred in.


The Acting Speaker (Mr. Paproski):: Is it the pleasure of the Elouse to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


The Acting Speaker (Mr. Paproski):: All those in favour of the motion will please say yea.


Some Hon. Members:: Yea.


The Acting Speaker (Mr. Paproski):: All those opposed will please say nay.


Some Hon. Members:: Nay.
Accident Investigation


The Acting Speaker (Mr. Paproski):: In my opinion the yeas have it.
And more than five Members have risen:


Jean-Robert Gauthier: Mr. Speaker, I think you would find unanimous consent to apply the vote taken on the opposition day motion earlier today to this vote.


Nelson Andrew Riis: Mr. Speaker, I think you would find that if we are to have a standing vote, the vote that we just had on Motion No. 11 ought to be applied to the report stage motion.


Brian Vincent Tobin: Mr. Speaker, for greater clarity, are we to understand that the vote we just had on Motion No. 11, if applied to report stage, would mean that the NDP has voted with the Government on report stage?


Nelson Andrew Riis: Mr. Speaker, I want to make it perfectly clear that on the report stage motion, yes, we are supporting the Government and that the Member for Regina- Lumsden is voting with his caucus.


Raymond John Funk: Mr. Speaker, I rise on a point of order. I also want to register my vote on this question as being with my caucus.


The Acting Speaker (Mr. Paproski):: The division just taken will be applied in reverse to the motion for concurrence in the Bill at report stage.


The Acting Speaker (Mr. Paproski):: Therefore, I declare the motion carried.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Paproski):: It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: The Hon. Member for Fundy Royal (Mr. Corbett)-TRANSPORT-VIA Rail-Continued service of Atlantic Limited; the Hon. Member for York West (Mr. Marchi)-IMMIGRATION-Private sponsorships-Government position; the Hon. Member for Algoma (Mr. Foster)-AGRICULTURE-Farm marketing boards/Discount of farm market quotas.

It is my understanding that a full hour is to be provided for Private Members' Business. Therefore Private Members' Business will end at 7.44 p.m.


PRIVATE MEMBERS' BUSINESS - MOTIONS   FOOD AND DRUGS LABELLING OF DRUGS
Mr. Murray W. Dorin (Edmonton Northwest) moved:: That, in the opinion of this House, the government should consider the advisability of amending the Food and Drug regulations in order to require the labelling of all drugs, irrespective of their intended use, so as to include a quantitative list of all medicinal and non-medicinal ingredients.
He said: Mr. Speaker, I first introduced this motion with the intention to speed up discussion already under way about labelling. I consulted with my colleagues in the House and I believe Your Honour will find unani-
June 19, 1989

mous consent for the House to accept a one word amendment to this motion. Therefore I move:
That this House accept an amendment substituting the word
"qualitative" for "quantitative" and that we debate the amended
motion at this time in the House.


The Acting Speaker (Mr. Paproski):: Is there unanimous consent?


Some Hon. Members:: Agreed.


[Stage Direction]
Amendment agreed to.
Murray Dorin: It is my pleasure to begin this debate on more extensive ingredient labelling for the medicines we need and use in this country. I hope the debate will speed the efforts currently under way and change attitudes among interested parties who are already in constructive consultation with the Department of National Health and Welfare.
I have several people to thank for the information I have today. The staff and volunteers of the Allergy Information Association, especially the executive director Mrs. Susan Daglish, have provided me with excellent scientific information and case histories. Their organization is the only national organization which represents allergic individuals and health professionals in this field.
I also owe a great deal of my information on this subject to Dr. Ed Napke, chief of the Product Related Disease Division of the Department of Health and Welfare. Dr. Napke's work in public and professional education, scientific drug monitoring and study has probably done more to advance policy in drugs and allergies than any other Canadian scientist.
There have been other endorsements of my motion's intent from organizations and individuals across the country. The Alberta Hospital, Edmonton, especially the mental health hospital board, and the Association for Vaccine Damaged Children have been very supportive. The association drove home to me the fact that vaccines, too, are drugs and reinforced my belief that we have a long way to go in this country in helping patients and relatives make responsible decisions about the health care they receive.
As well, I should mention Jamie Lawson, parliamentary intern who is responsible for gathering much of the information for this motion today.
Drug Labelling
Without the efforts of these people I would have been unable to present to the House anything more than statistics and scientific knowledge. If we stuck to "just the facts", we would be missing some very basic facts.
The Non-Prescription Drug Manufacturers' Association, the Canadian Drug Manufacturers' Association and its umbrella organization, the Federation of Canadian Health Care Associations, have all written to me endorsing the principle of full ingredient disclosure.
Here are some of the facts as seen from the consumer's point of view. Currently, voluntary guidelines request disclosure of excipients causing widespread sensitivities for non-prescription drugs. Excipients for prescription drugs need only be listed voluntarily in the professional reference work, compendium of pharmaceuticals and specialties. Many companies release no such information at all. Let us consider the occasional result.
An individual does not feel well and makes an appointment with the family doctor, then stops at the drug store to fill the prescription. After bringing it home and taking it according to the directions, the individual settles down to wait to feel better. In minutes the person begins to feel something, to feel worse than during the whole day. What is happening?
What might be going on is an adverse reaction to something the person did not even know he was taking. It is something called an excipient.
As I discovered, there are literally dozens of excipients in many medicines. They do not directly serve a healing, diagnostic or protective purpose. In some cases they are meant to be the "Mary Poppins" chemicals, the spoonful of sugar to help the medicine go down. Others hold powders together in a pill form, prevent chemical reactions and decomposition, release the medicine slowly, or make a dose easy to hold, swallow, or apply.
Some prescription creams have up to 58 such chemicals which many used to call inactive ingredients. Unlike the medicinal ingredients which are the working chemicals that make the drug worth taking, these chemicals have long been ignored by society in many respects. The best drug testing in the world focuses mostly on the drug itself, not the excipients. Drug experiments are initially aimed at healthy animals which are chemically different

June 19, 1989
Drug Labelling
from ill humans. Even the latter studies which focus on humans will not always capture the rarer reactions to the drug in combination with different living environments.
Different companies put approved drugs in completely different "chemical packages" and frequently each firm will offer certain drugs with different flavours and in different forms.
In addition, each body is chemically different. Obviously we know casually that John and Maiy are allergic to different things in different ways, but this is based in part on their different day-to-day environments in a way which is very hard to predict.
Dr. Napke pointed out:
Man is a walking test-tube. Each time a chemical is added or subtracted the balance may be upset.
He has also been quoted on the subject of how reliable even the most respected and dependable studies are, given the setting in which they take place. Testing, no matter how professional, cannot foresee all possible adverse drug reactions. This kind of perfect world is not what this motion can promise.
What this motion can promise is a way of reducing risk to patients by keeping them and their physicians better informed. It is based on the premise that consumers have a right to know what is in a product when they buy it, not just when they take it home and use it. By letting patients, physicians, and pharmacists know what is in a given pill we can make progress on several fronts.
First, people with known allergies to foods and drugs could avoid them more easily. Let me read a letter given to me by the Allergy Information Association:
I have a 16 month old child. She was tested after a year of problems, and corn is her major allergy. My baby is very underweight with all her sickness, only 22 pounds. She has had three ear problems in six weeks and I can't find an antihistamine/ decongestant she can tolerate. Most have a corn syrup base which caused a severe reaction: hyperactivity, destructiveness, irritability, colic pain, gas, crying constantly and not sleeping. The reaction took 36 hours to leave her system after I discontinued medication. Doctors and pharmacists can't help me any more and I am at a loss. Could you recommend children's medications which are com free?
As another example, there is currently a human rights case before the Ontario courts in which a woman was denied a permanent position at a firm because of a violent allergic reaction to ASA or aspirin during a
three-month probationary period. She says that she lost her job not because she was so foolish as to take aspirin but because she took a medication which contained ASA without listing its fullingredients.
Second, labelling excipients will make diagnosis of allergies much easier. In one recent case, a 36 year old man was allergic to polyethylene glycol which is added to many drugs, shaving lotions, and milk products. One day he took a normal drug just as anyone here might. Suddenly his blood pressure dropped, he lost consciousness, and he went into a seizure. He was experiencing life threatening anaphylactic shock. His doctor phoned the manufacturer which turned down his emergency request for information. The manufacturer would not even confirm that polyethylene glycol was present in the drug until the doctor threatened to list the brand name of the medication as cause of death if the patient died.
I am sure that most Canadians, including drug manufacturers, are appalled by this story. The Allergy Information Association has sent me numerous cases of allergic reactions or other medical emergencies in which time was wasted negotiating with companies to get vital ingredient information. We cannot end all of the risk, but why not end the life threatening delays and fatal errors that can be prevented?
Even with the best will in the world, the current system is costing lost hours in people's life and work, lost dollars in the Government's medical support programs, and lost lives and wasted talents in the homes and workplaces of this country.
According to the AIA at least 20,000 Canadians suffer from an allergic reaction to a drug every year. Some
5,000	Canadians per year are actually admitted to hospital mainly because of a drug reaction. In fact, 3 per cent of all acute care admissions to hospital are due to adverse drug reactions. There are also other forms of substance intolerance such as diabetic reactions to sugar filling in pills. Persons with celiac disease react to the presence of gluten, a substance found in most cereals and in such medication as capsule shells.
The general term for allergies and these other types of substance intolerance is an "adverse drug reaction", or ADR for short. In Dr. Napke's opinion, which has been both unique and influential world-wide, ADRs should include any effect of the drug, including no positive
June 19, 1989

effect at all which does not aid in curing, diagnosing or protecting the patient.
ADRs, in other words, are what happens when a drug is not just a drug, but also a foreign and potentially harmful substance. Just how frequently ADRs occur in the general population is not clear, but surveys show that they affect between 5 per cent and 35 per cent of those in hospital.
No one can say for certain precisely how important ADRs are in part because of the lack of easily accessible ingredient information in the public domain. There are not reliable figures of lost jobs, tax burden, burden on the health care, or cost to the economy. Clearly, however, based on what information exists, we are looking at an extensive as well as a tragic problem in all these areas. It is important to bear in mind that allergies produce a broad range of symptoms. These reactions can change in intensity, triggering agency or symptom. Changes may evolve slowly or after periods of stress, pregnancy, and other changes to normal hormonal balance or from poor nutrition. It is also important to stress that allergy reactions are diverse and can be confused with many different illnesses. This makes the identification of a drug allergy even more difficult.
Beyond the all too familiar and unholy trinity of asthma, stuffy nose, and rashes, reactions can include fatigue, headache, insomnia, rapid mood changes, confusion, depression, anxiety, paranoia, hyperactivity, heart palpitations, muscle aches, joint pains, hives, hay fever, bed wetting, shortness of breath, diarrhoea, eczema, abdominal pains, and constipation.
Less common are the severe reactions including psychosis, seizures, and anaphylactic shock. Dr. Marshall Mandell, an expert in clinical ecology, has recently concluded that between 50 per cent and 80 per cent of the average day-to-day medical practice are patients with allergic reactions all too often misdiagnosed. Bearing in mind the complexities of allergies, the author of an article in the summer 1987 edition of the journal Vitamin Supplement made the following observation:
One of the most important aspects of the study of allergies is the
fact that they are highly individualized.
Drug Labelling
This point is particularly significant. If chemicals put in a drug affected or killed a large part of its users, we would expect the Government's regulators to ban it. In the case of ADRs, one person's drug is another one's poison. Because ADRs are individualized government regulators must still act, but they must concentrate their efforts on helping individuals protect themselves. We have to accommodate both the needs of the non-allergic person needing medicine, without standing in the way of another person's right to defend his own life and health.
If I may, I would like to give just a brief bit of information on this issue. I introduced this motion on December 15, 1986. I made it a motion because it requires only a single vote in the House and therefore can have a quick impact. It also avoids trapping the Government into language which inadvertently makes implementation difficult or impossible.
However, on August 18, 1987 it fell prey to the old danger of being talked out. Nonetheless, the debate was helpful for two reasons. In the first case, it demonstrated that this motion could attract support from all Parties. In the second case, the matter was pursued before the Standing Committee on Health and Welfare. After further hearings into drug, food and cosmetic intolerance, the committee submitted a report and a series of detailed recommendations on July 14, 1988 and demanded a reply from the Government.
Significantly, the committee recommended an approach which included labelling, but did not restrict itself to informing the public by way of labels. I accept these developments as promising, sophisticated approaches to the complexities of drug disclosure.
However, I would prefer to see labels than accompanying pamphlets or even toll free ingredient information hot line numbers printed on the package. I feel that labelling is simple, direct, and easily accessible when the key decisions are made to buy, prescribe or use a particular prescription or non-prescription drug.
During the early part of 1988 there was also considerable evidence that the Ministry was moving toward more action in drug labelling. On January 15, 1988 information letter No. 733 was issued by the Health Protection Branch of Health and Welfare on the subject of mandatory disclosure of all drug ingredients. The due date for replies to the document was only four months thereafter.

June 19, 1989
Drug Labelling
In veiy broad terms the information letter was suggesting that all ingredients be made public in qualitative alphabetical lists on all drug labels or in accompanying lists in the case of smaller containers.
By February the Minister for Health and Welfare would cautiously testify before the House committee that the question was no longer "should something be done?", but rather "what is practical?"
In August, the first company in Canada, Searle Canada Inc., voluntarily moved to reveal its excipients to the public through labelling and publications sent to the medical community.
I want to congratulate this company for taking this initiative which has two purposes; one, it demonstrates that this can be done by a company involved in the industry if it chooses to do so and, second, it paves the way for other companies which may not have yet followed suit. This fine action was praised by representatives of the industry, the Allergy Information Association and the medical professions.
Searle is reporting that the cost factors in changing labelling were minimal. I note, Mr. Speaker, that Searle has seen fit to send a representative here today from Toronto to observe this debate.
However, Searle represents only a small fraction of the market-place and the lack of consistency throughout the market limits trustworthiness of even an expanded voluntary system. The extent of labelling, what may be withheld as a trade secret and what not, the terminology to be employed; all of these matters should be standardized if the consumer or patient is to feel confident of what is there to be read.
I would like to close my remarks on a personal note. I first thought of this motion nearly two and a half years ago. I was angry about the allergy problems of my young children, angry that my wife, our doctor and I were pretty much shooting in the dark when it came to discovering what drugs they could tolerate. We got good information about the actual medicine in the children's drugs but there was generally only sketchy information about the additives, colouring, flavouring and fillers for drugs. I knew other people had the same problem but I did not
really know how serious this issue was, how many people were affected and how complicated a solution would be.
I now feel that by approving Motion 437 which is before the House today we have the opportunity to do something very important. I urge all Members to support this motion and to take the matter forward. I hope that the Government will see fit to act quickly.


Mr. Dave Dingwall (Cape Breton-East Richmond):: Mr. Speaker, I wish to begin by congratulating my colleague, the Member for Edmonton Northwest (Mr. Dorin), on his introduction of this particular motion on a subject matter which I believe is of great concern to a good number of Canadians. I want to congratulate him for seeking the consent and co-operation of other Members in terms of introducing the amendment that he started off with.
Some years ago, I believe in this Chamber, and perhaps you were here at that time, Sir, a former Prime Minister said, "Consumers have a right to know what is in a product when they buy it and not when they take it home and use it". Those were the words of the former Prime Minister of Canada, the Right Hon. Pierre Elliott Trudeau.
I wish to join with my colleague and support him in this particular motion which I think provides benefits to Canadians, particularly those who have a variety of diseases. There are approximately 3.5 million Canadians who are treated for allergic diseases every year, that is, one in six. Two million Canadians have hayfever, over one million have asthma, and one million are affected by other allergic conditions including eczema, hives and allergic reactions to food, medication and insect stings. Some allergic individuals suffer from more than one form of disease. Allergies tend to run in families. If one parent is allergic, the child has one in four chances of developing that allergy. If both parents are allergic it is likely that two out of three children will be allergic as well.
The question that we ought to pose is how are children in this great country of ours affected. Point five million children in this country have hayfever, .8 million children have asthma and .2 million children have eczema. Allergies may develop at any age, beginning as early as infancy. One in five children visiting doctors do so due to a major allergic disorder. Asthma is the most common cause of pediatric admissions to Canadian hospitals.
June 19, 1989

When allergic women are pregnant, approximately one-third have fever symptoms, one-third become worse and the condition of one-third remain the same way.
Those are some of the facts, Mr. Speaker. This amendment moved by my colleague from Edmonton Northwest provides good information to those Canadians who have an allergy themselves or have a child with a particular allergy.
We all know from previous debates in this House as well as in committees that the opposition presented to making these particular changes was also presented with regard to the Food and Drug Act concerning certain foods. In fact, opposition to labelling food came primarily from the food industry in other substantive matters which came before this House. I guess the same argument could be made here as well. I would like to go through those arguments briefly.
They said that labelling would reveal their secret recipes to the competition and that processing and cooking would change the protein structure of the ingredients to such a degree that the information would be meaningless. That is what they said with regard to the Food and Drug Act. They said that consumers would not utilize labelling because they would not bother to read them or, if they did, they would not understand the terms. They said that it would be costly and difficult to list ingredients on food packages. Those are only four arguments that were used.
In a non-partisan way I say that those arguments can be made with regard to the specific motion that we are dealing with. However, I think you will find that since the Act of 1969, whether it be pharmaceuticals or what have you, these particular arguments hold no water whatsoever. What is wrong with Canadian consumers having this knowledge about drugs? Surely there is nothing wrong with that kind of information being imparted to Canadian consumers and making it mandatory that the Department of National Health and Welfare have it included.
This is a very worthy motion, Mr. Speaker. I wish to congratulate my colleague again for bringing what I believe to be a substantive amendment to the attention of this House. I would like to congratulate all Members of the House from all Parties for the support that they wish to give to this particular motion.
Drug Labelling
We know that this motion is merely a proposal being made by a Member of Parliament expressing an opinion with regard to the changing of regulations. However, I think it goes to the heart of knowledge and information which we are imparting to Canadian consumers. Not only in my capacity as the official critic for National Health and Welfare for the Liberal Party of Canada, but also as a father and as a person who has been watching this particular matter for quite some time, I wish to concur with the comments made by my colleague and offer him my support for this motion.


Mr. Chris Axworthy (Saskatoon-Clark's Crossing):: Mr. Speaker, I am happy to rise in support of the motion of the Member for Edmonton Northwest (Mr. Dorin). I want to congratulate him on his persistence in once again bringing the subject of drug labelling to the House. He is asking us to consider the advisability of amending the food and drug regulations in order to require the labelling of all drugs, irrespective of their intended use, so as to include a quantitative list of all medicinal and non-medicinal ingredients.
In the wide array of methods utilized to improve health status, the use of prescription and non-prescription drugs has played an important role and for most people the drug prescribed and used does what it is intended to do. However, for a large number of people it causes an adverse reaction and there are two possible causes for this. It is either an adverse reaction to one or more of the active ingredients in the drug in question or to one or more of the excipient ingredients in the drug. In other words, either something which is in the drug to assist the individual with their illness causes an adverse reaction, or something which is used to enable that drug to be taken causes the adverse reaction.
The Canadian Society of Allergy and Clinical Immunology estimates the extent of those in our society who have adverse reactions to a variety of substances and drugs. For example, 3.5 million Canadians are treated for allergic diseases. That is one in six of all Canadians. A million Canadians have asthma. A million Canadians are affected by other allergic conditions, including eczema, hives and allergic reactions to food, medications and so on. One in five children visiting a doctor do so due to a major allergic disorder. In hospitals, 20,000 patients suffer allergic reactions to drugs and 5,000 people enter hospital because of allergic drug reactions. While both

Drug Labelling
prescription and non-prescription drugs have provided major gains to Canadians, they also give rise to major problems for other Canadians.
Present regulations require that only the active or therapeutic ingredients of drugs be disclosed. The excipient or non-active, non therapeutic ingredients do not have to be disclosed at the present time even though there is evidence to suggest that they do in some circumstances cause adverse reactions in some people.
The motion put forward by the Member for Edmonton Northwest (Mr. Dorin) would require the disclosure of all ingredients, including flavours, colourants, binders, lubricants and preservatives, all ingredients of the drugs both active and inactive. All the motion asks is that consumers have the right to know what is in the prescription and non-prescription drugs they will consume. Surely, all consumers have a right to know the contents of those drugs so as to protect themselves from adverse reactions and consequences and so as to make decisions on whether or not to use the drug in question on the basis of knowledge of its content. In this way, consumers could be protected. Costs to the health system of those people who do have adverse reactions could be reduced.
A similar issue arose when regulations were put into place requiring the disclosure of ingredients of foods. The food industry was opposed to the inclusion of such ingredients on the basis, they argued, that it would reveal secret formulations of their products and that manufacturing processes changed the chemistry of ingredients so that much labelling might not be meaningful. They argued that no one read the labels. They argued that it would be costly and difficult to list the ingredients on labels. We are hearing the same sorts of concerns today from drug companies. As we have heard, though, Searle voluntarily responded to the need for disclosure, thus indicating that it cannot give rise to too large a competitive disadvantage and cost to provide that information and they should be highly congratulated for making that move.
Not only were the concerns of the food industry at the time of regulations on food products shown not to come to pass, they also did not deter the government of the day from passing the regulations in question. It is hoped on this side of the House that any concerns about the
costs and other difficulties with regard to labelling will not be affected today either and that the Government will respond to this motion which, as we all know, has the support of all sides of the House.
Consumers should have the right to know the contents of the prescription and non-prescription drugs they take. Pharmacists and members of the medical profession should know of all these ingredients too so that they can advise their patients and have some confidence in the effect of the drugs which they are to prescribe.
The information in question, which the Member for Edmonton Northwest is asking to have considered for inclusion on drug labels, is already provided to the Government in the process of drug regulation. The information, therefore, is already available and already presented in a form which could be readily translatable onto a label. We need only to ensure that that information is added to the list of active ingredients on the label of drugs which are sold in Canada.
I and my Party wholeheartedly support the motion put forward by the Member for Edmonton Northwest. Canadians have a right to know the ingredients of what they are consuming. The Government of Canada owes it to all Canadians to provide them with this information in a readable and legible form at the time they make the purchase and/or the decision to use any drug in question.
The rule, Mr. Speaker, should be disclosure of the information. As I say, I wholeheartedly support the motion put forward by the Member for Edmonton Northwest.


The Acting Speaker (Mr. Paproski):: The Hon. Parliamentary Secretary. Then I will recognize the Hon. Member for Winnipeg North.


Mrs. Lise Bourgault (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, I welcome the opportunity this evening to rise in the House to speak to the motion presented by the Hon. Member for Edmonton Northwest (Mr. Dorin).
Mr. Speaker, I have a personal interest in this motion, but I would also like to take this opportunity to expand on the Hon. Member's motion and say that, in addition to the therapeutic or medicinal ingredients that are needed in order to prepare the dosage form. These ingredients include, for instance, what are commonly
June 19, 1989

referred to as excipients, lubricating agents, binders, preservatives and colouring agents.
The safety of these ingredients is generally well established and the ingredients themselves are widely used in industrialized countries. However, in recent years, a small number of non-medicinal ingredients has been associated with harmful effects in a small percentage of patients with very specific allergies.
It is not always possible to eliminate or find substitutes for these non-medicinal ingredients. In some cases, the nature of the medicinal ingredient itself limits the range of non-medicinal ingredients used with it. Furthermore, the nature of the medicinal ingredient may be such that not using a certain non-medicinal ingredient may compromise the stability of the pharmaceutical preparation. It is also a fact that substitution of a non-medicinal ingredient does not guarantee that some people would not be allergic to the substitute product.
Obviously, Mr. Speaker, individuals who are sensitive to certain substances need and are entitled to know the composition of any medication before taking it.
The Health Protection Branch of the Department of National Health and Welfare has received many inquiries from individuals, consumers' groups and health professionals, and many expressions of concern about the lack of a statement of non-medicinal ingredients in pharmaceuticals.
For many years, the food and drug regulations have required the name and amount of medicinal ingredients to be given on the label of any medication.
In recent years, representatives of the branch have worked closely with the pharmaceutical industry to determine how to inform consumers on the nature of non-medicinal ingredients in drugs.
These negotiations between government and industry have resulted in the manufacturers' associations adopting voluntary guidelines for the listing of non-medicinal ingredients. For non-prescription drugs, these guidelines specify that ingredients known to cause allergic reactions in a large number of individuals will be listed on the drug label. Since prescription products are not usually distributed to consumers in their original packaging, informa-
Drug Labelling
tion on the non-medicinal ingredients will be given to the Canadian Pharmaceutical Association, which will publish it in the Compendium of Pharmaceuticals and Specialties (CPS), a publication available to physicians and pharmacists and, to a lesser extent, to consumers, in public libraries.
Although these efforts have proved useful, the concept has not been accepted by all interested parties. Furthermore, most if not all ingredients can cause allergic reactions, although very few have been found at fault. Clearly, regulatory action was necessary in order to guarantee that health professionals as well as Canadian consumers would have access to information on non-medicinal ingredients in pharmaceutical products.
In January 1988, the Health Protection Branch issued Information Letter No. 733, in which it proposed that the qualitative declaration of all non-medicinal ingredients on the labelling of drug products should be made mandatory. This Information Letter received ten times the usual response, Mr. Speaker. In fact, we received 155 letters. The vast majority of respondents, 140, were in favour of the proposal, while 35 disagreed, but only on the manner of disclosure of the information. Although alternatives to listing the ingredients on the label were suggested, none of these suggestions satisfied the consumer's need to have access to the information when and where the drug was purchased.
In July 1988, in its fourth report, the Standing Committee on National Health and Welfare recommended amending the Food and Drug Regulations to require a full qualitative listing of all ingredients in all pharmaceutical products. The Department of National Health and Welfare is committed to adopting provisions requiring the declaration of non-medicinal ingredients. Provisional regulations are now being drafted and will be published in Part I of the Canada Gazette, simultaneously with the Department's response to the concerns expressed in response to Information Letter No. 733.
In order to reduce any negative economic impact of the proposed declarations on the pharmaceutical industry, it is suggested that implementation of the new provisions be delayed. Manufacturers will then be able to

June 19, 1989
Drug Labelling
change the labelling of their products as appropriate and exhaust their existing stock of labels.
Thanks to a sensible approach to the implementation of the new regulations on drug labelling, the Health Protection Branch of the Department of National Health and Welfare will continue to fulfil its mandate, which is to protect the health and safety of Canadians.
Mr. Speaker, in concluding, I would like to add that Health and Welfare Canada was already considering a motion similar to the one presented by the Hon. Member for Edmonton Northwest (Mr. Dorin). In the spirit of parliamentary reform, the Government was pleased to let our hon. colleague present a Private Member's motion, as we did in the case of Ms. McDonald of the New Democratic Party when she was the Member for Broadview-Greenwood.
The Hon. Member, who agreed to propose an amendment to his motion so that it would meet all the Department's requirements, is to be commended for the work he has done in this respect and especially for his concern for the health of his fellow Canadians.


Mr. Rey Pagtakhan (Winnipeg North):: Mr. Speaker, health safety for all Canadians is paramount. It is a basic right. I therefore rise today to speak in favour of Private Members' Motion No. 437 as amended:
That, in the opinion of this House, the Government should consider the advisability of amending the Food and Drug regulations in order to require the labelling of all drugs, irrespective of their intended use, so as to include a qualitative list of all medicinal and non-medicinal ingredients.
The past couple of decades have seen Canada at the forefront of efforts to label products for consumer safety. We now label packaged food and textiles. Today, we consider a motion to label all drugs and drug packaging similarly to include in this labelling a list of both medicinal and non-medicinal ingredients. We, in this House, have another opportunity with this motion for Canada to play a leadership role.
Allergies are a problem for millions of Canadians and for many of them the problem can be very serious, even life-threatening. Minute amounts of a substance have been known to cause sickness and even death. The key to
preventing an allergic reaction is avoidance of contact with the offending substance. Thus, it is of the utmost importance that individuals with allergies are aware of the substances to which they may be exposed.
There are two additional equally important considerations. First, a physician when cognizant of the specific ingredients in a given product is better equipped to make a timely diagnosis of an allergic reaction in a patient who is reacting adversely for the first time to that drug which has been given for some other reason.
Second, a physician is assisted in explaining a seeming inefficacy of a drug in which the action of the active ingredient is hindered or nullified by the adverse action of certain inactive ingredients in the said drug in some individuals.
Indeed, the arguments in favour of this motion are strong from the point of view of making a correct diagnosis, of evaluating an unexpected response to treatment and of preventing a medical catastrophe.
It may be argued that labelling would reveal secret ingredients to competitors; that consumers would not take the time to read the labels even if they were there; and that it would be costly and/or difficult to list ingredients on the packaging for medications.
I suggest that trade secrets ought to be subservient to consumer safety; that those with a life-threatening allergy to a substance would be diligent and take the time to read the labels; and that costs of such labelling would be minimal while the benefits would be substantial for those with known allergies.
A basic principle in patient care is informed consent. Also, knowledge by a medical doctor of all ingredients in any pharmaceutical agent taken by a patient or individual ensures the doctor's proper action in case of an emergent, adverse or untoward reaction to that pharmaceutical agent. Thus, giving those who suffer from allergies the knowledge required to make safe and wise choices of drugs is a societal obligation. Giving physicians all the information will enhance the delivery of exemplary health care to all Canadians.
Thus, today I speak in favour of a change to the regulations of the Food and Drugs Act to provide for the mandatory labelling of non-therapeutic ingredients in medications.
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I congratulate my colleague the Hon. Member for Edmonton Northwest (Mr. Dorin) for introducing this excellent motion. Indeed, I am privileged to add my own and my Party's support to this motion.


Mr. Stan Wilbee (Delta):: Mr. Speaker, I am pleased to have this opportunity to respond to the motion that has been put forward by the Hon. Member with respect to the labelling of pharmaceuticals. This is a current initiative within the Department of National Health and Welfare and I welcome the opportunity to advise the House of the progress it has made in this area to date.
I would like to address this motion in relation to preventive health care. The issue of drug labelling of non-medicinal ingredients has been a priority in the Department for some time. Non-medicinal ingredients are not normally associated with any action on the taking of a medication for the first time. However, in recent years the health professions and the regulatory agencies have noted that some individuals are intolerant or experience adverse reactions ranging from mild to severe, including several forms of allergy.
The reactions that have been reported have varied considerably. They can range from relatively minor skin rashes to generalized symptoms of fatigue, nervousness and headache to more serious gastrointestinal or neurological effects and may even result, as some Hon. Members have mentioned, in shock or death. The responsible agent is only rarely identified.
A finite number of substances used as non-medicinal ingredients in drug products are known to cause adverse reactions in sensitive individuals. A few examples of these are lactose, a commonly used filler in pharmaceutical products, the yellow colouring agent, tartrazine, sodium metabilsulphite and related compounds used as antioxidants to preserve flavour and prevent decomposition, benzoates and parabens commonly used as preservatives and gluten, a protein found in certain types of starch which must be avoided by those suffering from celiac disease.
It is evident that although only a small proportion of Canadians appear to have adverse symptoms from some ingredients, the range of reported effects is very broad. It is also clear that such ingredients are widely used in
Drug Labelling
society without any discernible problems for most Canadians.
Drug products contain non-medicinal ingredients to perform various functions related to the quality, safety and effectiveness of these products. For example, nonmedicinal ingredients may hold a tablet together or maintain the sterility of the product. They may contribute to the rapid release of the medication after ingestion or maintain the potency of the medication within the drug product. It is readily evident that the complete elimination of non-medicinal ingredients is not possible for all products.
Since non-medicinal ingredients are essential to the availability of safe and effective drug products, it is necessary to minimize the exposure of individuals to non-medicinal ingredients to which they know they are intolerant or allergic. The initial response of the Department of National Health and Welfare to these concerns was to solicit the voluntary support of the pharmaceutical industry. As a result, drug manufacturers' associations adopted voluntary guidelines for the disclosure of potentially harmful non-medicinal ingredients.
Prescription drug manufacturers chose to declare the content of those non-medicinal ingredients that have been clearly associated with symptoms of intolerance or allergy in some people. This information was given to the Canadian Pharmaceutical Association for inclusion in the drug monographs of the reference textbook, the Compendium of Pharmaceuticals and Specialties, commonly known as the CPS. Non-prescription drug manufacturers disclose the presence of selected non-medicinal ingredients known to cause allergic reactions on product labelling.
While these efforts have been helpful, voluntary labelling and other voluntary declarations have not been universally accepted. It is also apparent that there are many non-medicinal ingredients which have the potential to cause sensitivity or allergic effects. Only full label disclosure will eliminate the continuing debates over whether a particular ingredient is a sensitizing agent and should be declared. To that end, the Department of National Health and Welfare published Information Letter No. 733 soliciting comments on a regulatory proposal to require the listing of all ingredients on the

June 19, 1989
Drug Labelling
labels of all drug products. The responses to this regulatory initiative are currently being evaluated.
Some of the issues that will be reviewed prior to the preparation of regulatory amendments include quantitative as well as qualitative declaration of non-medicinal ingredients, a consistent method of declaration on the product labels, particularly with regard to the nomenclature of the non-medicinal ingredients, exemptions of certain types of products from the requirement to declare non-medicinal ingredients on their product labels and appropriate implementation of the regulatory requirements to minimize the economic impact on pharmaceutical manufacturers and on society.
Regulatory amendments will be drafted with consideration of these and other comments received. The Health Protection Branch, with the co-operation and commitment of the pharmaceutical industry, will continue its efforts to safeguard the health and safety of Canadians by providing the ingredient information needed for the informed use of drug products.


George Baker: Mr. Speaker, this is just a note concerning the motion before the House. I listened with some interest to the Parliamentary Secretary. The Government of Canada is now preparing new regulations to change the existing regulations in the Food and Drug Act to do basically what this resolution wants the Government to do.
Hon. Members will notice that about 15 minutes ago, the Parliamentary Secretary mentioned that the Information Letter No. 733 to which the hon. gentleman just referred got 155 responses from the manufacturers, and 140 were in favour and 35 disagreed with the manner but did not disagree with the intent of the regulation. Therefore, now that the manufacturers agree and the companies agree, the Government of Canada is going to change the regulation to agree with the manufacturers and what the companies agree that they agree with. That is some leadership.
If that is not a good illustration of leadership, this is what the Parliamentary Secretary said further to that. She said that the regulation will be brought in later on so the manufacturers can clear out their existing labels. Those were her exact words. That is leadership. That is
concern for the health of Canadians on the part of the Government of Canada.
Perhaps the Government of Canada should be showing more leadership here. Perhaps it should be more concerned about the health of Canadians as is the Hon. Member who introduced the resolution and other Hon. Members who have spoken to it. The Government should not wait for the companies to clear out their labels before bringing in the regulations that the companies agreed to bring in, really.


Mr.   Maurice@: Mr. Speaker, I would also like to take this opportunity to speak to the motion presented by the Hon. Member for Edmonton Northwest (Mr. Dorin), because we all know that the fact that a number of people are allergic to non-medicinal ingredients is a matter of concern to regulatory bodies, health professionals and the pharmaceutical industry.
As we know, Mr. Speaker, an allergy can be extremely dangerous and harmful. It could even cause the death of a person who ingests a substantial dose of an ingredient that causes an allergic reaction. It is harmful because it may deprive a patient of medical care and thus prolong that person's illness.
Earlier, the Hon. Member for Gander-Grand Falls (Mr. Baker) commented on the Government's lack of leadership. I simply want to say this: I don't think that the Government showed a lack of leadership by asking for the views of industry. We must remember that the Government submitted the information to this sector to get a reaction or comments with respect to the proposed changes, because after all, this is a scientific sector. It isn't always possible to get the information we want. However, in recent years, science has seen some very important developments.
Today, with this information we are now able to go ahead with these regulations and even save lives, because unfortunately, there are still too many people who have those allergic reactions and the only way to stop or prevent this, is to provide information on all drug ingredients, both medicinal and non-medicinal.
Mr. Speaker, I support this motion and I believe it goes a long way towards improving the present situation, and before concluding, I want to say that although we are all for progress, the fact remains that thanks to this information, certain findings were sent to the Depart-
June 19, 1989

ment. The Department is now trying to decide the best way to make the information available to the general public, so that it is done right and especially so that it is understood by all who will have to take those drugs.
So, Mr. Speaker, I close by congratulating my colleague from Edmonton Northwest, of course, for having presented this motion, for being consistent and for trying to move everything forward in the health field so that everyone-industry, professionals and government-can reach a consensus in order that everyone might be able to advance science in a concrete way, in the interest of patients and to avoid unnecessary loss of life from now on. So, once again, I congratulate my colleague. Thank you, Mr. Speaker.


Mr. Harry Chadwick (Brampton-Malton):: Mr. Speaker, I am pleased to address the House on the issue of labelling of drug products in Canada and to apprise the House of recent regulatory initiatives taken by the Department of National Health and Welfare in this area.
The Health Protection Branch of the Department of National Health and Welfare, as part of its mandate to protect the health and safety of Canadians, has the responsibility to regulate and evaluate the labelling of all drug products. It has been a requirement of the food and drug regulations for many years that a quantitative listing of all medicinal ingredients be displayed on the labels of all drug products.
In recent years, concerns have been expressed by both consumers and health professionals on the lack of information available about the non-medicinal ingredients included in those products.
This information is especially vital to those who suffer from sensitivities to certain substances. Although the majority of Canadians are not affected by non-medicinal ingredients in drugs, some individuals experience reactions which can range from mild to incapacitating in effect.
The Health Protection Branch recognizes the special needs of those individuals who are sensitive to non-medicinal ingredients in drug products. In response to that concern, Information Letter No. 733 was issued in January, 1988, to seek a uniform and practical approach to the full disclosure of those ingredients. The informa-
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tion letter proposed that the food and drug regulations be amended to require the qualitative declaration of all non-medicinal ingredients on the labelling of drug products.
Responses to the information letter were received from pharmaceutical manufacturers, industry associations, health advocacy groups, health professional associations and individuals. The principle of disclosure of non-medicinal ingredients received overwhelming, if not unanimous, support.


The Acting Speaker (Mr. Paproski):: The period for the consideration of Private Members' Business has now expired.

Pursuant to Standing Order 93 the order is dropped to the bottom of the list of the order of precedence on the Order Paper.



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 third time and passed.
The Acting Speaker (Mr. Paproski):: The Hon. Member for Winnipeg-Saint James has the floor. He has 15 minutes left plus 10 minutes for questions and comments.


John Harvard: Mr. Speaker, I was interrupted by the clock at 6 p.m., 1.45 hours ago. I would like to repeat two or three of the points I made before six o'clock. I was talking about the CBC, which is more than 50 years old. It has been serving this country for more than half a century. It was established by a Conservative Government and a Conservative Prime Minister, R. B. Bennett, who saw the wisdom of establishing a public broadcaster in this country. One of the major reasons, in fact, the major reason Mr. Bennett believed in establishing the CBC was because of the fear

June 19, 1989
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of the influence of American programming from across the border. In those days it was radio, not television. Mr. Bennett and the Tories of the time saw a threat. They wanted a public broadcasting system to offset that threat and offset that American influence. They went ahead and established the CBC.
Over the last 50 years and more the CBC has established an extremely enviable record. Unfortunately, many Canadians have begun to take the CBC for granted. We cannot take the CBC for granted any more, particularly in the face of the Budget, and particularly in the face of the proposed cuts in the Budget which will run to $140 million over the next four years. That is simply too much for the CBC to take, particularly when one considers that the CBC has been suffering cuts for a good while, not only in the last 12 months, but perhaps for more than five years.
The President of the CBC has also stated that he is alarmed about the proposed cuts. I wish to refer to a newspaper article of some time back with the headline: "CBC fears loss of entire network". In that particular regard the President was talking about Radio Canada International. The article states:
He says Finance Minister Michael Wilson's budget will make the CBC unrecognizable in four years from now, and argued if the possible shutdown of stations or even entire networks is what the Government wants, it must help wield the axe.
We know that the Hon. Minister has stated otherwise. He stated that he decides on the cuts and decides on this bad medicine, but it will have to be the board of directors of the CBC and the bureaucracy within the CBC which will have to administer the bad medicine.
The article further states:
-the $140 million in fresh cuts in CBC funding announced this week are "immoral" and "devastating" and will confront the publicly-owned system with options that are "horrible" to contemplate.
"If these cuts are actually finalized, the CBC will not be recognizable four years from now," he said in a telephone interview.
That is the type of evidence adduced and brought forward by the President of the CBC. He should know what he is talking about.
It would be a tragedy if these cuts were effected in such a Draconian manner. We need both the radio network and the television network of the CBC. I hear the Tories mumbling and grumbling.


John Horton McDermid: You are doing the grumbling.


John Harvard: It is too bad that the Tories have been Americanized in the past few years. They can have the republican system, and the private radio systems from the States. They can have the private television networks, and they will get with it all the junk that the Americans have become so famous for in television and radio-junk! The CBC is far superior to that stuff which comes across the border.


John Horton McDermid: The CBC buys all those junky programs from the United States.


John Harvard: What junky programs?


John Horton McDermid: The CBC buys them. Watch it.


John Harvard: Oh, yes? Only because people like you try to starve the CBC.


John Horton McDermid: One billion dollars is starving?


John Harvard: You don't know what it costs to run a network. You have no idea.


John Horton McDermid: Neither does the CBC.


John Harvard: The CBC brings this country together. This is a huge country with a massive land mass. We do not have a great many people, only about 26 million or 27 million. It takes a public broadcasting system devoted to bringing the people together, to celebrate our differences, to tell us the Canadian story. That is what a Canadian public broadcasting system can do. The private sector cannot do that. That is not to criticize the private sector. The private sector has a different preoccupation. It has a different target. Companies are in it to make a profit. They are there to attract advertising. Their whole notion concerning programming is entirely different.
I am not here to quarrel about private broadcasting and its need to make a dollar. I do not quarrel with that for a moment.


John Horton McDermid: Where have you worked all your life?


John Harvard: I will tell you, sir, I worked in the private sector for 13 years and I worked at the CBC for 18 years.
June 19, 1989

I happen to know something about both systems. There happens to be a place for both of them, something Tories cannot seem to understand.


The Acting Speaker (Mr. Brightwell):: I would ask the Hon. Member to address the Chair and perhaps get on with his dissertation rather than arguing with other Hon. Members.


John Harvard: Thank you, Mr. Speaker, and I apologize. I certainly meant to speak through you, Sir, to those Members opposite. I get my dander up because I do not know where Members opposite live. I do not know whether or not they live in a swamp, in a bush or somewhere on the moon. This is a great country. One of the reasons why it is a great country is because we have the Canadian broadcasting system. It has been said many times, and something which I did not say first, if we did not have the CBC someone would have to invent it. That is the absolute truth.
The Tories wake up to the CBC. However, they do not even realize that they are receiving information programming on radio in the morning. There is the Gzowski show between nine and 12. As It Happens, which is a venerable show, has been on the air for about 20 years. The CBC has some of the greatest television programs that will ever be seen. Does The National have an equal? Does The Journal have an equal? I doubt it very much.
The National and The Journal are high profile shows. They are watched by millions of people, including Tories. They like the CBC except when they walk into this Chamber. Something happens to them then. They lose their marbles.
There are also programs like Fifth Estate which has probably been on the air for something close to 15 years. It is one of the finest programs one will ever see. Man Alive has probably been on the air for more than 20 years. I could go on and on with regard to the kind of service the CBC provides.
Do you know what, Mr. Speaker? I feel passionate about this, not because I worked there but because of the vital role it plays and because, unfortunately, a great many Canadians have taken the CBC for granted. Not only that, but the CBC has been guilty of not blowing its own horn. I wish that over the years the CBC had adopted some of the free enterprise promotion that has made private radio and television stations so successful. I
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do not think the CBC has done a very good job of blowing its own horn.
In these difficult times it is people like those of us in the Opposition, we Liberals, who have the responsibility to come to the defence of the CBC.
I read an article in The Globe and Mail written by some chap from London, Ontario. It left me incredulous. He said that CBC programming was boring. When we think that probably three million Canadians on average watch The National and something over two million Canadians watch The Journal every night, that is really boring, right?
There are some famous drama productions that have appeared on the CBC such as Anne of Green Gables.


Mrs. Dobbie:: You named one, good.


John Harvard: I could run down a list a lot longer than that, I remind the Hon. Member for Winnipeg South (Mrs. Dobbie). Does the Hon. Member not wish that she represented Winnipeg South Centre?
CBC programming is not boring. Canadians have shown over and over again that they appreciate the work of the CBC, that they appreciate the programming that is provided by the CBC. We have to come to the defence of the CBC.
Another point I want to raise has to do with possible commercials on CBC Radio. As you know, Mr. Speaker, a number of years ago there was advertising on CBC Radio. Then, through some strategic moves-


Dorothy I. Dobbie: By the Liberals?


John Harvard: Yes, of course, by the Liberals. Who else? There was a good decision to take commercials off CBC Radio.


Dorothy I. Dobbie: And let the taxpayers pay.


John Harvard: The Tories simplify. They cannot seem to grasp what the CBC is all about. They cannot grasp what public broadcasting is all about.
When commercials are taken off a radio network, something which was done a number of years ago, the raison-d'etre of the corporation or the radio network in particular has changed. The type of programming that draws advertisers does not have to be conducted. Mass appeal programs do not have to be broadcast. In the main, programs of public service can be carried out, programs that the private sector cannot air. That is not

June 19, 1989
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to damn the private sector. It has a different reason for its existence.
That is the reason why we need the CBC and why we a non-commercial CBC radio network.
There was a rather prominent Tory from my province who asked in committee a few weeks ago what would be wrong with putting commercials on CBC Radio. There would be a lot wrong. Putting commercials on it would change the whole character of CBC Radio.
I would now like to deal with the Canadianization program at the CBC. The CBC has been trying to increase the amount of Canadian programming in prime time viewing hours. The objective of the CBC over the last few years has been to increase Canadian content in prime time to about 95 per cent. That is a laudable goal. It is a difficult goal to achieve, particularly in these times. I think that right now Canadian content in prime time on the CBC television network is somewhere between 85 per cent and 90 per cent. It still has a short distance to golit is apparent in the wake of the cuts announced in the Budget that the increase in Canadian content in prime time is going to have to be slowed down. The corporation will not reach its target. That is too bad because it was a laudable goal. The CBC had really hoped to achieve it, but it is now impossible. It simply costs a lot more money to produce Canadian content programs than to buy that cheap stuff from the United States. To a great extent what the Americans are doing is using Canada as a dumping ground to dump some of that stuff. Unfortunately, the corporation because of its financial restraints does not have any choice.
I can assure you, Mr. Speaker, if CBC people had their druthers, they would like to have a lot more Canadian content programs.


Dorothy I. Dobbie: Mr. Speaker, I would like to ask the Hon. Member a question about the practices of the CBC as a Crown corporation. It is my understanding that in the provinces, when a member of the Crown corporation leaves to go into public service it is frequently the practice to give them a leave of absence for five years and then take the person back. Is that the practice of the CBC? The Hon. Member should be able to tell me since he was a member of the CBC employment force when he ran for office. Perhaps he could tell the House if it is
the practice of the CBC to take ex-employees back if they have served time in the public service?


John Harvard: Mr. Speaker, I can tell the Hon. Member for Winnipeg South (Mrs. Dobbie) that I am not aware of the CBC granting anyone a long leave of absence. I know that the CBC has granted people leaves of absence for two or three months, but when she is talking about a Member of Parliament who will be away for at least four or five years, I have never heard of such a thing. I can assure you that I have no intention of returning to the CBC.


Joy Langan: Mr. Speaker, I think it is sad that those four Members opposite find it great sport to heckle. I think they possibly missed the point the Hon. Member was making, that the CBC is like VIA Rail, it is the glue that keeps this nation together.
I wonder if the Hon. Member would consider reiterating his position so that they might give him the courtesy of listening.


John Harvard: Mr. Speaker, I thank the Hon. Member for the question. I would be very happy to repeat a couple of things I said. In a democracy like ours in Canada, I think the CBC is indispensable. We need a public broadcaster that will disseminate information. The free flow of information is absolutely essential to a democracy and if we have a strong democracy in this country, which I believe we do, one of the reasons for it is the CBC.
Canadians are well informed. They are enlightened and know the issues. They know how bad the Government is, and they know how good the Opposition is.
We need the CBC to do that kind of programming. More than that, the Canadian story is complex, the Canadian story is many faceted. It is multi-dimensional. It reaches out to the farthest comers of the county. We need a public broadcaster like the CBC to bring us together and to celebrate our differences, to tell the Canadian story. It is a great institution which has done a wonderful job. I hope it will continue to do that job, but it needs our support.


Mr. Malone:: Mr. Speaker, I think the central theme to the Hon. Member's speech is not to cut CBC because of the good things it has been doing. He gave us Anne of Green Gables as an example of good programming. I would be surprised if he would find any significant
June 19, 1989

percentage of Canadians anywhere who would disagree with him.
He said that The Journal was good. We all have variations, and some will question and doubt one program or another, but we need to recognize that it costs $1 million a week for the program.
The pertinent point I want to put to the Hon. Member is that it is not simply a question of whether something is good and should not be cut. That question can be asked of every agency of government. The fundamental question is whether or not the country has a problem with the deficit. The fact is that we are spending 30 cents of every dollar simply to pay for the interest on the debt and if we do nothing, it will rise to over 50 cents by 1993. Does the Hon. Member not see that as a problem? If so, what would he cut?
Is the debt a problem to this nation and its future, and if the answer is yes, what would he trim to bring it into balance?


John Harvard: Mr. Speaker, I thank the Hon. Member for those questions. They are appropriate and responsible questions.
I am concerned about the deficit. I wish the Tories had been concerned in the last four or five years. One of the reasons we have a problematical deficit is that the Tories allowed the debt to rise almost 100 per cent in the last four or five years. If they had not allowed the $170 billion to rise to $340 billion, we would not have the deficit we are facing today.
The Hon. Member asks where I would cut. I say to the Hon. Member for Crowfoot that first you have to establish priorities. I question the Government's priorities when it proposes to make cuts of $140 million over the next four years to the CBC. It should be looking at interest rates. If the interest rates were not so high we would not have such a high deficit.
The Hon. Member for Winnipeg South giggles.


Dorothy I. Dobbie: Because you are silly.


John Harvard: They do not like to hear the truth and the facts. According to economists, the high interest rates have probably added some $3 billion to $5 billion to the deficit. If the Government would address the high
Borrowing Authority
rate of interest perhaps some of the other things would come into place. It has not done that.


Arnold John Malone: Mr. Speaker, all I can say is that the rhymlesser, the timelesser, the worser the free verser. I can hardly believe that someone so recently from the Liberal past could come here after August of 1981 when interest rates were 21.75 per cent at the Bank of Canada, 25 per cent for consumer loans and over 30 per cent for many other card loans, and talk about this period of time as one of high interest rates. He knows full well that the pressures on interest rates are world-wide, including in Japan, the United States, Europe and elsewhere.
I put the question to him again: What would he cut? If the country is in debt he has to be able to respond. If he is going to respond seriously to the question, what would he cut?


John Harvard: Mr. Speaker, I think I have adequately answered the question already. I think the Hon. Member is misinformed, as usual. It is getting to be a disease on that side of the House.
There is no disputing the fact that we had high interest rates in the early 1980s. The entire western world was in an economic mess and the Canadian economy was sucked into that. For the last four or five years western economies have been doing very well. We should have been doing much better than we were.
As a result of the foolhardiness of the Government, the debt rose. In the last number of months, particularly since the election, there has been an unconscionable rise in interest rates. That is your answer.


Dennis Joseph Mills: I am not really convinced that you understand how important this issue is on the other side of the House. I have just been reading from the Atkinson Lecture of Mark Starowicz at Ryerson Polytechnical Institute on March 12,1985. This is just a short preamble and then I will address my question to my colleague whose passion for the CBC has to be respected by everybody in this House because it is a very important institution. However, here are some facts:
Canadians now spend over half their leisure time watching
television. That is an average of 23 hours of television per Canadian
perweek- By the time our children reach the age of 12, they will have

June 19, 1989
Borrowing Authority
spent 12,000 hours watching television, more time than they will have
spent in school.
I would like to give another recommendation from Mr. Starowicz who is a respected man in this industry and by all Members of the House. He talks about the political broadcasting system being one of our great defence systems for our sovereignty. He makes this statement: "Fifty per cent of Canadian television should happen on the Canadian broadcasting system within the next five to 10 years. This is simple dignity for nationhood."
I would like to ask my colleague who has been a member of the industry for many years if he feels that this is at all possible with the way the national Government is treating the CBC today.
And more than five Members having risen:


The Acting Speaker (Mr. Paproski):: Call in the Members.


John Harvard: Mr. Speaker, I thank the Hon. Member for his question. No, I do not think it is possible for the CBC to continue in the way that it has for the last few years in the face of these cuts. Television is a very, very expensive business. It takes a lot of resources to do the kind of programming that one expects of a public broadcaster. I repeat, through you, Mr. Speaker, to the Hon. Member, that it was no less a personage than the president of the CBC, Mr. Juneau, who said that if these cuts go through, the CBC will become unrecognizable, that the cuts would be devastating. That is the kind of evidence that we must consider.


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated. Is the House ready for the question?


Some Hon. Members:: Question.


The Acting Speaker (Mr. Paproski):: Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


The Acting Speaker (Mr. Paproski):: All those in favour of the motion will please say yea.


Some Hon. Members:: Yea.


The Acting Speaker (Mr. Paproski):: All those opposed will please say nay.


Some Hon. Members:: Nay.


The Acting Speaker (Mr. Paproski):: In my opinion the yeas have it.
Anderson
Atkinson
Beatty
Bernier
Bird
Blackburn (Jonquiere)
Bosley
Bouchard (Lac-Saint-Jean)
Boyer
Browes
Chadwick
Clark (Brandon-Souris)
Collins
Cooper
Corbett
Couture
de Cotret
Dobbie
Dorin
Ferland
Friesen
Gibeau
Greene
Gustafson
Hicks
Holtmann
Horning
Johnson
Jourdenais
Koury
Larrivee
Lewis
Lopez
MacDougall (Timiskaming)
Marin
Masse
McDermid
McLean
Mitges
Moore
Oberle
Plamondon
Pronovost
Reid
Ricard
Roy-Arcelin
Scott (Victoria-Haliburton)
Sobeski
Sparrow
Tardif
Thorkelson
Tremblay (Lotbiniere)
Valcourt
Venne
Vien
Weiner
White
Wilson (Swift Current-Maple
Andre
Attewell
Belsher
Bertrand
Bjomson
Blenkam
Bouchard (Roberval)
Bourgault
Brightwell
Campbell (Vancouver Centre)
Charest
Cole
Cook
Corbeil
Cote
Darling
Desjardins
Do mm
Felt ham Fontaine Gerin
Gray (Bonaventure-iles-de-la-Madeleine) Guilbault
Harvey (Chicoutimi)
Hogue
Horner
Hughes
Joncas
Kempling
Langlois
Leblanc (Longueuil)
Loiselle
MacDonald (Rosedale)
Malone
Martin (Lincoln)
McCreath
McKnight
Merrithew
Monteith
Nicholson
O'Kurley
Plourde
Redway
Reimer
Richardson
St-Julien
Shields
Soetens
Stevenson
Tetreault
Tremblay (Rosemont)
TUrner (Halton-Peel)
Van de Walle
Vezina
Vincent
Wenman
Wilbee
Creek-Assiniboia)-115

++NAYS
Members
Allmand	Althouse
Anawak	Angus
Arseneault	Baker
Belair	Bellemare
Benjamin	Blackburn (Brant)
Caccia	Callbeck
Catterall	Clancy
Comuzzi	Crawford
Dingwall	Ferguson
Fisher	Flis
Fontana	Foster
Funk	Gardiner
Gauthier	Grey (Beaver River)
Harvard	Harvey (Edmonton East)
Hovdebo	Jordan
Keyes	Kilger (Stormont-Dundas)
Kristiansen	Langan (Mission-Coquitlam)
LeBlanc (Cape Breton Highlands-Canso)	MacAulay
MacLellan	Malepart
Manley	Marchi
Marleau	McCurdy
McGuire	McLaughlin
Mifflin	Milliken
Mills	Mitchell
Nystrom	Pagtakhan
Pickard	Proud
Riis	Simmons
Skelly (Comox-Alberni)	Stupich
Taylor	Tobin
Vanclief	Waddell
Wappel Young (Beaches -Woodbine)-63	Young (Gloucester)
[Translation]


The Acting Speaker (Mr. Paproski):: I declare the motion carried.
Bill read the third time and passed.


Nelson Andrew Riis: Mr. Speaker, I rise on a point of order. Considering the progress we have made today, I think you might find unanimous consent to call at ten o'clock.


Mr. Lewis:: Mr. Speaker, I hate to do this. I too appreciate the progress we have made, thanks to co-operation from the opposition Parties. However, I would give the undertaking that once we are through a brief debate to complete second reading stage of Bill C-9 we will call it ten o'clock.


BANK ACT
[Stage Direction]
The House resumed from Wednesday, April 26, consideration of the motion of Mr. Loiselle that Bill C-9, an
Bank Act
Act to amend the Bank Act, be read the second time and referred to a legislative committee, and the amendment of Mr. Rodriguez:
That the motion be amended by deleting all the words after the
word "that" and substituting the following therefor:
"Bill C-9, an Act to amend the Bank Act, be not now read a second
time but that it be read a second time this day six months hence".
The Acting Speaker (Mr. Paproski):: The Hon. Member for Port Moody-Coquitlam has the floor.


Ian Gardiner Waddell: Mr. Speaker, I want to begin by thanking the Government House Leader for giving me this opportunity.
I would point out that when I last rose to give this speech on April 26, 1989 there was a problem. It was the evening of the budget leak. As I rose to speak, I was interrupted by the Government House Leader who moved that the House continue to sit beyond the ordinary hour of adjournment for the purpose of continuing consideration of second reading of Bill C-9, an Act to amend the Bank Act. That really was not the truth at all. The Minister was trying to keep the House going because of the budget leak.
I want to quote the remarks I made at that time because they were rather prophetic. As reported at page 1001 of Hansard, I said:
He is absolutely right. When you play those kinds of games it comes
back to haunt you in this House -
Now I would like to continue my remarks on the Bank Act, and I will pardon my colleagues if they wish to watch me from other places.
The Hon. Member for Nickel Belt (Mr. Rodriguez), our Party's critic in this area, has already made his speech. It was a very exciting speech and I will try not to repeat too much of what he said.


Mr. Friesen:: Any of it.


Ian Gardiner Waddell: Our position, to be serious for a moment because this is a very serious matter, is that the banks have been gouging their customers for years on service charges. There is so much gouging going on that the Canadian public rose up and started to complain about this. Complaints came from everywhere, including from the Chairman of the Finance Committee.
The Government set up a special committee to look into changes to the Bank Act to deal with these bank service charges. The committee reported and, unfortu-

Bank Act
nately, the Bill had no teeth when it came back to the House.
This Bill is the same as Bill C-140 which died on the Order Paper just before the last federal election, though small business is included in this Bill. We in the NDP opposed Bill C-140 and we are also opposed to this legislation.
We oppose this Bill for a number of reasons. The Bill provides few guarantees for customers and small business against unfair service charges and does nothing to keep fees and increases under control. Hon. Members will recall a famous National Film Board short movie which won an award years ago. It was a cartoon about a person who went into a bank and was terrified. Things have not changed very much. People are not terrified of going into banks, but they are still getting ripped off while the banks are making immense profits and are the most protected of industries in Canada. Not for them wild competition, not for them the free market. They want to be protected and they also want to be able to charge as much as they can possibly get away with. They have certainly got away with a lot, and they will continue to get away with a lot after this Bill becomes law.
The Government laboured and brought forward this mouse of a Bill. The principle is that the banks can be trusted to keep service charges in line. In other words, they will self-regulate themselves. The Government took that same position on interest charges on credit cards. The charges came down a little bit when Parliament put a lot of pressure on the banks, and as soon as Parliament recessed the interest charges climbed back up. We say that one cannot trust voluntary compliance through the banks on the matter of service charges, and that is the first weakness in the Bill.
The second weakness in the Bill is that there are a number of charges that the Bill does not remove, which it could remove, such as charges for deposits and withdrawals, charges for cashing NSF cheques, charges for closing accounts, charges for maintaining a minimum balance, charges for providing the current balance on an account, and charges for errors made by the bank. The banks make an error, and you pay. You close your account, you pay. You don't have the right minimum balance, you pay.
We also object to the self-monitoring provisions in the Bill. I will address that in a moment. Hopefully, if I have time at the end of my speech, I will add some positive measures that could be taken in the House to oppose gouging by the banks on service charges.
First, the weakness in the Bill and the concept of voluntary compliance. The legislation does not force the banks to do anything about their service fees, except have them disclose the charges and notify their customers about increases or new fees. I gather the philosophy is, if the customers do not like it, they can go to another bank. Except, the problem is that the other bank will have the same service charges and fees.
In the case of small businesses, banks are not required to disclose all the charges, but only those defined as a "core list".
The Government bases this approach on the assumption that the disclosure and notification of charges will open up competition. This does little for a customer who has a mortgage or a small business that has a loan with a bank. They cannot just walk out of that bank. They would have no option but to accept the increases because it would cost them too much to transfer their loan or their mortgage.
In terms of voluntary compliance, the banks' past record has not been good. By all accounts, 1988 was a banner year for the banks. The Royal Bank had a net income of more than $700 million; the Bank of Nova Scotia's income was $506 million; and the Canadian Imperial Bank of Commerce had record earnings of $591 million. Despite those huge earnings, the banks did not hesitate to raise service charges. The Royal Bank raised 15 of its service fees on November 1 by 4 per cent to 6 per cent, with the cost of writing an NSF cheque going up 12 per cent. I am not condoning writing NSF cheques, and certainly would not do it myself-not knowingly, anyway, Mr. Speaker. However, the charges are excessive for that accident happening, which does happen to the majority of people.
In 1987 the five major banks collected more than $1 billion from bank service charges. We need to ask then, can we really trust the banks to voluntarily keep their service charges in line, which this Bill does?
I mentioned some of the charges that are put on that this Bill does not remove, which could be removed. The Bill does not prohibit those charges, for example, for closing an account, for maintaining a minimum balance, and so on. We should have legislation that forces the

banks to provide a basic no-frills account which would provide basic services free of service charges. The banks are making enough money from investment of our money that they could afford to do this. The recommendation for a no-frills account was a central feature of a study of service charges conducted by the Finance Committee in the spring of 1988.
I mentioned self-monitoring of banks. If customers are not happy with the way complaints are made to banks, they can contact the Office of the Superintendent of Financial Institutions in Ottawa. The Superintendent of Financial Institutions looks good on paper, but the problem is that it is not a real guarantee at all. The Superintendent of Financial Institutions may have a big name, but he or she does not have a mandate to protect consumers. In fact, the Office of the Superintendent is there to ensure that financial institutions remain solvent, not to be an appeal as an ombudsperson on bank service charges.
This Bill will only create more pressures for an agency that is already overworked. More important, the Superintendent's job is to ensure that banks stay in business, not that they satisfy customers. It is possible to imagine how those two interests could conflict.
What are we proposing, because one has to be positive as well as negative? We would accept the recommendations of the Finance Committee, such as to require the provision of free basic banking services. That is the basic no-frills service, to prohibit certain unfair charges such as the minimum balance charge and the charge-back for cashing an NSF cheque. We would agree to those recommendations; however, they do not go far enough.
In addition to what the Finance Committee proposed, we would propose a freeze on all bank service charges for one year. Why? Well, service charges have increased over the past five years at an annual rate of 19 per cent. The banks are making $1 billion a year from those bank charges. An argument can be made that the banks have over-charged consumers and should be prepared to give customers a break for one year.
There have been precedents where federally regulated corporations have been required to compensate consum-
Bank Act
ers when over-charging is demonstrated. For example, the CRTC has made a number of rulings vis-a-vis Bell Canada where consumers have received money back from Bell.
We would suggest the establishment of a financial services ombudsperson empowered to perform consumer advocacy, referee and long-term policy advice with the banks. This office would be an independent entity with a toll-free number in order that consumers across Canada could call with complaints. We live in the modem world, and that could be done. It would also advise Parliament regularly on consumer relations in relation to financial services.
The Hon. Member for Nickel Belt (Mr. Rodriguez) has tabled a private Member's Bill in this Parliament to implement the recommendations of the Finance Committee and to implement the proposal of a one-year freeze and a financial services ombudsperson. The Hon. Member's Bill would extend those guarantees to all customers and small businesses. His Bill would set up a no-frills account that would not have charges for deposits and withdrawals, for cashing an NSF cheque, or for maintaining an account. Second, a personal account will not charge customers for deposits and withdrawals, for maintaining a minimum balance, for cashing NSF cheques, for closing an account, or for errors made by the bank. Third, there would be a freeze on bank service charges for one year. Fourth, it would create a financial services ombudsperson.
These are positive recommendations that would bring some justice for consumers. The banks have made a lot of money in over-charging and gouging people on service charges. It is about time that we took concrete action. We do not know why the Government is not doing that. There is public pressure from consumers for a fair shake here. The banks have been making a pile. They are heavily protected in the Canadian environment. It is not a free-market economy for them. They get together and do their thing and fix service charges. It is no accident that they all have the same policies. There is not going to be competition there. We need more teeth in this Bill. This is not half a loaf, it is about a tenth of a loaf. We want the whole loaf.

June 19, 1989
Bank Act


The Acting Speaker (Mr. Paproski):: On questions or comments the Hon. Parliamentary Secretary to the Secretary of State for External Affairs.


Mr. Boyer:: I listened to the former resident of the lakeshore and his thoughtful speech about the present relationship between consumers and banks, and thought there were many good suggestions made. Not directly touched on by the Member in his speech, but nevertheless a point on which the Member may wish to comment, is the report in the press today with respect to the relationship between political Parties and banks providing credit cards with a discount rate for Party members who use those credit cards. This is something which has been entered into between the Liberal Party of Canada and the Royal Bank of Canada, and apparently between the Ontario New Democratic Party and the Bank of Montreal. I certainly hope that our Party would not enter into that type of arrangement.
However, I want to ask the Hon. Member who has brought a lot of common sense to the subject tonight in his speech what his view is of that type of formal relationship between a political party and a credit card issuing company to provide affinity cards and whether he thinks that is appropriate. Does it not in fact set a double standard which Canadian consumers might justifiably criticize when seeing political parties using their relationships with banks to extract for the benefit of party members who are also card holders an interest rate that is fully 1 per cent lower than that which is charged to other customers of the bank?


Ian Gardiner Waddell: Mr. Speaker, I thank the Hon. Member for his question. I note that he pointed out that I come from Toronto Lakeshore. I have been trying to hide the fact that I really do come from Toronto in all the years in which I sought election in western Canada. However, there have been some events in the last few months that have made me say that I am proud of my origin in Toronto. It is in the great Province of Ontario which has a lot of representation from my Party.
With respect to the credit cards, I disagree with the Hon. Member. I will be honest and straightforward with him. I do not think the fact that my Party and New Democrats are able to get a credit card through the banks is going to stop us in any way from criticizing the
banks. I do not mean to say that the Hon. Member was directly saying that, but there may have been that implication. After all, I just stood up for some 20 minutes and kicked the bejabers out of the banks. I do not think we will have a conflict. I do not know what the Hon. Member's wallet is like but mine is full of credit cards, although probably not with as many as his. We live in a modem world. We use credit cards. There is no sense ignoring that. If we can negotiate a deal with a Canadian bank by which we get a good deal for our Members who are using credit cards anyway, then let us face it, there is not anything wrong with that. As a matter of fact, I think it makes good business sense, something for which I would like to see my Party noted.


Patrick Boyer: Mr. Speaker, I was neither suggesting that this arrangement would preclude or prevent New Democrats from criticizing the banks, nor that there is something wrong with having an agreement between a Canadian political party and one of the banks with respect to affinity cards. The point I was making was why should that agreement provide for a lower rate than that which is paid by other consumers. As he said, he spent 20 minutes denouncing the banks. Why does he not continue with some of the logic that is there and carry the force of his argument through consistently and in this Chamber turn the mirror on himself and his own Party and accept that this is an area in which the New Democratic Party has made a mistake? I will repeat it here on the floor of the House. I would never support such an arrangement between the Progressive Conservative Party of Canada and a credit card company. I think Canadian consumers would certainly look with jaundice and a heightened sense of dismay at political parties negotiating that type of reduced rate of interest for party members, whether it is the New Democratic Party or the Liberal Party-


Raymond John Funk: They finance your elections.


Patrick Boyer: -compared with what consumers pay. I want him to answer that specific question.


Ian Gardiner Waddell: Mr. Speaker, I admire the Hon. Member very much. He is one of the stronger Members of this House. However, let him not be holier than thou. His Party receives contributions from banks and so on. Will his Party now stop accepting those contributions in an election campaign? Will it stop accepting contributions
June 19, 1989

from companies and so on? It is absurd for the Hon. Member to have a holier than thou attitude. He is trying to nail us in this area as if we will be defensive and say: "Oh yes, we made a mistake". I do not think that we have made a mistake. I think that we got a deal for our Members through a negotiating process. It is open to other Canadians and other groups to negotiate these deals as well. There is no double standard, as he calls it. There is a straightforward standard. The standard is that we live in a modem world in which we use credit cards. We are members of groups which can negotiate certain rates. The Hon. Member probably gets a corporate rate when he rents a car from Budget. Or does the Hon. Member turn that down because it is discriminatory of others who cannot obtain that rate? Let us not be holier than thou.


Mr. Jerry Pickard (Essex-Kent):: Mr. Speaker, I rise today to address the proposed amendment to the Bank Act, specifically Bill C-9 and its corresponding regulations.
The Bill was introduced to the House of Commons on April 13, 1989, by the Minister of State for Finance (Mr. Loiselle) and was the result of extensive reviews conducted by the House Standing Committee on Finance during 1988.
This Bill, as we are all aware, is the second effort of the Government to introduce legislative changes respecting banking service charges. The first effort, Bill C-140, having died on the Order Paper due to the fall election, was similar in content to the present Bill before us. There are some minor modifications, the dominant one being the introduction of business deposit accounts in the legislation. That is the basic difference between these two proposals.
Although Bill C-9 does address some of the concerns expressed by organizations such as chartered banks, consumer advocate groups, banking associations, trust companies, credit unions, the Superintendent of Financial Institutions and the Minister of Corporate Affairs, the legislation falls short of adequately addressing all concerns expressed by these groups. Indeed, the legislation falls short of proposing many of the recommendations of the House of the Commons Standing Committee on Finance.
Bank Act
Perhaps the Bill could be viewed as a good start, but certainly it is not complete in its approach to the governance of banks in Canada. There are a number of areas in which the proposed legislation is deficient.
I wish to take this opportunity to review these concerns, concerns that are not only mine but also those expressed by business, citizens and bank organizations. I bring these matters forward in the hope that Hon. Members opposite will agree with the importance of these concerns and make some serious effort to amend Bill C-9 prior to its final passage so that these matters will be adequately addressed.
Bill C-9 reduces the need for banks to disclose to both personal and business deposit account holders the various charges for services rendered by the bank. Further, the Bill and, in turn, its regulations provide guidelines for the timing of disclosures of charges.
Although this is a much needed introduction, it does not go far enough to provide specific details to be followed by banks for such disclosures. The banks have argued that due to various types of accounts it would not be possible simply to place signs in branches advising the charges of the bank. The proposal would permit the use of brochures to advise account holders of various service charges. The question remains: Does the banking system need to be so complicated that it is not possible for the banks to provide simple instructions to its customers? Is it necessary to produce volumes of brochures on service charges? If the sign method is too complicated, how do banks intend to keep the brochure method an easier way of disclosing service charges?
The Bill and its accompanying regulations should specify the form of disclosure required to comply with the legislation. According to this legislation, we would permit the banks to draft and circulate their own brochures on this very important matter. If it is our intention to provide the understanding of bank service charges and if it is our intention to ensure quantity of this information, then surely it must also be our intention to ensure quality of the information to Canadians. We will not be able to achieve the goals for improved disclosure to individuals if we are not ready to regulate the disclosure content to ensure the information is frank and honest.

June 19, 1989
The legislation is silent on the issue of charging penalties against individuals and businesses for depositing non-sufficient funds cheques.
Although the banks have recently been more willing to accept the concept of no penalties for NSF cheques on personal accounts, they are still reluctant to waive the penalties in such instances on business accounts. I am sure we must all agree that when either the individual or a business accepts a cheque, the recipient should not be penalized because the cheque has not been issued in good faith and turns out to be NSF. One may suggest it is only a nominal charge, about $10, but this impacts on the individual finances as well as on business profits. In some cases, the service charge can be equal to or almost as much as the cheque itself.
Let us take the example provided to me by a newspaper delivery boy in a town in my area. I recognize that newspaper boys and girls are not big business, but in the particular instance that happened a year ago, this newspaper boy accepted a cheque for payment of a few weeks of delivery. The cheque itself, barely over $10 in value, was returned NSF. The boy was charged a $10 service fee and the bank saw nothing wrong with the system. Its response was that this was its policy.
It was only after rigorous intervention on behalf of the youth that the bank waived the service fee. Certainly it is not the intention of our bank system to unjustly penalize persons or businesses who accept cheques in good faith. Certainly it is not the intention of our institutions to introduce our youth to a business world that would have no compassion or understanding for an individual who works hard for his money only to find out that he or she can be penalized for trusting people.
Where is the bank's responsibilities in these cases? All persons and all businesses utilize banking services. Indeed, any financial transaction will undoubtedly include a bank customer. We encourage the use of banking institutions and services in our society. In return for providing these services the banks are compensated, and compensated quite handsomely. Chartered banks are recording record profits that are supplemented by fees generated by service charges. Yet they are reluctant to
Bank Act
waive the penalty against the innocent depositors for non-sufficient fund cheques.
The legislation must be altered to address the most discriminatoiy practice. Legislation must include a prohibition for all depositors of NSF cheques from penalty. This is the only fair and equitable method of addressing the issue.
At the time of introduction of Bill C-9, the Minister indicated that the responsibility for handling complaints must first rest with the financial institutions. The Bill and its corresponding regulations provide for the establishing of a complaints procedure, which calls for banks to handle complaints first.
Only after exhausting this procedure would the complainant be permitted to apply to the Superintendent of Financial Institutions. However, neither the Bill nor its regulations stipulate the method which the bank must follow in processing complaints. There is no guideline or timeframe. In short, there is no guarantee that the complaint would be handled in an orderly and expeditious manner. The Bill simply requires the bank to file its complaint procedure with the Superintendent.
If the banks are provided with the opportunity to be first to deal with complaints, should the legislation not provide the guidelines to be followed? Is it not possible, with the current proposal, for banks to introduce lengthy arbitrary appeal processes? I believe it is possible.
Further, if it is our intention to make this process more simple and understandable, it would certainly be more advantageous for all parties to uniformly apply a complaints system. Therefore, I ask the Government to reconsider this issue, acknowledge the problems that could arise as a result of a Bill not providing sufficient direction in the complaints process, and introduce changes before final passage that would ensure uniform, prompt and sufficient procedures for customer complaints.
Bill C-9 in its present form attempts to address the very serious matters of disclosure of bank service charges and complaints system. The Bill is silent with respect to NSF cheque penalty charges. The Bill only addresses banks, pursuant to the Bank Act, and those banks are listed on schedules 1 and 2 of the Act.
June 19, 1989

What about other financial institutions that deal in deposit accounts, such as credit unions, the trust companies and the loan companies? What about governing these financial institutions?
Again, in pursuit of uniform and equitable legislation governing deposit accounts, service charges and complaints procedures, it must surely be argued that the rules must apply equally to all financial institutions. To this end, would it not be advisable to introduce legislation that covers all financial institutions? The banks, trust companies and co-operatives should all operate under similar guidelines.
Certainly, the Canadian Bankers Association would welcome the introduction of legislation to govern trust and loan companies and co-operatives. These institutions should certainly not be given an advantage over chartered banks by being permitted to operate by different rules.
I suggest that it would be prudent for the Government to not only strengthen this legislation as it relates to banks, but also to introduce further legislation that will address service charges, NSF cheques and complaint processes for the rest of the Afinancial services industry.
In summary, I wish to emphasize the importance of the issues raised in Bill C-9 and its corresponding regulations, and to further emphasize the need for the Government to reconsider certain provisions of the proposed legislation. Action is necessary to strengthen this legislation and extend it to cover all financial institutions.
If we are in doubt of the serious nature of banking service charges and its importance to the business community, let me refer to the Federation of Independent Business, an item, Small Business Views the Banks, The Bottom Line, edition 1988:
The issue of service charges has risen quickly to become the single most significant concern of one in every four small businesses in Canada. There is no doubt that the banks are relying more and more on service fees as a profit source. This is explained by the banks as a result of the fact that "less low cost money on account is now available for banks to lend out to other customers; depositors prefer term deposits et cetera to non-interest bearing accounts." In summary it seems that small firms are seeing their service charges increasing at rates far above the rate of inflation, and often more than once a year, with no compensation gains in other areas.
Bank Act
The House of Commons Finance Committee itself made specific recommendations with respect to service charges. Recommendations based on the hearings conducted in 1988 included the elimination of certain types of charges and the modification of other charges. An example is the charge for not maintaining a minimum balance in accounts. Such a charge penalizes low-income Canadians when account balances dip below the magic minimum balance figure that is established by the bank. This relatively new practice of levying a maintenance fee was a special concern of the committee. The Bill does not address this matter.
The negative response to the proposed legislation's lack of addressing the NSF cheque situation was evident in the Consumers Association of Canada response:
The Association welcomed the alacrity with which the service charge legislation was re-introduced, but said it hoped the Finance Department would have gotten even tougher with the banks-(the association) was disappointed the draft legislation wasn't tougher. The government had an opportunity to have another go at it and should have forced banks to eliminate some fees, like penalties for bounced cheques.
Although banks may have no difficulty in complying with Bill C-9 because "banks were already complying with what was proposed in the 1988 draft legislation", there is concern among members of the Canadian Bankers Association and its comments bear this in mind:
The Banks believe they are capable of regulating themselves and do not need such legislation. We are generally satisfied - The Canadian Bankers Association believed that similar rules should be introduced to cover the rest of financial services industry, including trust companies and loan companies and co-operatives, which were also subject of last years public hearings.
The Government has seen fit to introduce service charge legislation. Bill C-9, in its current form commences the much needed overhauling of the system. What the Bill lacks is clearer, more defined policies with respect to disclosure of charges and complaints procedures and elimination of certain charges. What the Bill does not do is extend its proposals to all financial institutions.
I would further suggest that in order to assist the Government in these matters, the Bill be referred to the House of Commons Standing Committee on Finance. This committee, because of its previous review of the Act and its recommendations in 1988, is very capable of

Bank Act
reviewing the Bill and making further recommendations on this issue.
In order to address these matters, in order to eliminate the discrepancies to the Bill that are not solved in the proposed amendment, in order to treat all Canadians fairly, in order to treat all financial institutions equally, I request the Government to amend the proposed legislation prior to the final passage. I ask this Government to undertake these changes expeditiously and present to the House and the people of Canada a comprehensive piece of legislation that will meet our financial needs today and in the years to come, that will instil customer confidence in our banking and financial service industry.


Some Hon. Members:: Hear, hear!


Mr. Loiselle:: Mr. Speaker, I have listened very carefully to the intervention of the Hon. Member for Essex- Kent (Mr. Pickard). I would like to congratulate him on many of his very positive remarks on Bill C-9.1 would be tempted to say the same for the Hon. Member for Port Moody-Coquitlam (Mr. Waddell) who spoke before him. I am pleased to see that there are very positive suggestions. This is a first step, and we will follow it very carefully.
I cannot address all the points that he has raised on this particular Bill on bank service charges, but he said that we fell short of addressing all concerns of the various groups. Of course, we are very much aware of that and that is a good start. As far as profits, I would like to remind the Hon. Member that the banks are widely held financial institutions, and we look at them very often as huge monsters, but their profits are disseminated all across Canada to a large part of our population.
He spoke about brochures instead of signs. A man or a woman going to a bank to look at the charges relevant to a particular bank would find it difficult to go around and copy down from the various signs that would be posted there. We feel that it would probably be much better to have a small brochure available at every bank. Then you could go around to three or four banks, very quickly pick those up, go home and study them at length. We thought that this would be a more open way of dealing with it.
My last remark would be to reply to his point that we should apply the same rules to the other financial institutions, the trust and loan companies. I would like to remind the Hon. Member that our constitutional capacity to intervene in those institutions is much less clear than it is with the banks over which we have very real responsibility in other areas. Our responsibility is very often limited to the solvency issue and all contract matters come under provincial jurisdictions. We have looked at that, but I am pleased to tell him that following efforts that have already been made by the banks, many other institutions have followed suit. We can only hope that it will continue to be so.
One thing I would like to ask him: Could he possibly indicate to me if he feels that additional competition in the arrival of 60, for example, annex or Schedule B banks and the fact that the trust companies and loans and credit unions are there to compete with the banks is not in itself a good way of solving the charges issue also?


Jerry Pickard: Mr. Speaker, I thank the Hon. Minister for his question. I feel that the market-place is definitely a place to have controlled competition, but I feel the major problem with that competition is that if everybody is not playing by the same set of rules, if everybody is not controlled in similar respects by using the same parameters within which they can operate, a difficult situation is created for each one of our financial institutions. I recognize that we do have provincial bodies that govern certain of our financial institutions as well as federal bodies that govern other financial institutions. I believe it is really the nature of this Government's policy that we should move beyond where we are right now, negotiate some regulations which would make the playing field of all financial institutions fair and equitable.
If it is just the market-place that is going to control what is happening, it seems to me that when one financial institution comes forward with a group of policies, with a group of regulations, others follow very quickly. It appears that interest rate charges are often very close to the same in each one of our banks. It appears that service charge rates are the same with all of our banks. It appears that we get a very close correlation between charges from one institution to another. I think

the market is the place that determines much of that. There is no question that if one bank is a long way out of scope, they are not going to be doing the business.
I do think that when it comes down to this issue that I am looking at, that the average person cannot go through a hundred different regulations that each bank has, if it is such a complicated issue that the banks have to provide all kinds of package policies, provide different charges on every operation that they carry out, the consumer is almost at a loss to figure out what this bank is doing and try to make comparisons with others. It is not just a simple matter of comparing an interest rate to an interest rate. With many of these package policies put together by banks, you get three or four services at a certain fee. Three or four different services provide a different fee. I believe the average consumer is unable to go through that without a tremendous background of accounting or other similar experience.


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


Joseph R. (Joe) Comuzzi: Mr. Speaker, I am pleased to rise today to take part in the debate on this legislation which is a Bill to amend the Bank Act in Canada. The Hon. Minister of State (Finance) (Mr. Loiselle)said in his contribution to this debate on April 26 on page 979 of Hansard that Bill C-9:
-responds to the many recommendations put forth by the Standing
Committee on Finance and Economic Affairs.
Indeed this Bill did adopt some of the committee's recommendations. Why though did the Government not see fit to incorporate all of the committee's recommendations which make good sense, are fair to all Canadians, and would improve the content of this Bill considerably from its present form?
Let me refer specifically to these recommendations. The first recommendation of the committee's report to the House on May 31 suggested that banks and other federally regulated financial institutions be required to provide accounts that would make basic banking services available. For these basic accounts no charges shall be levied for maintenance of the account, making a limited number of deposits into or withdrawals, or payments by cheque on the account, providing the current balance of the account and transferring to the basic account the
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balance of any other account of the customer with the financial institution.
Surely Canadians should be able to expect that the most basic services provided by financial institutions, as cited in the recommendations, be provided free of cost. Such an amendment would ensure that poorer families, infrequent users of the bank, young children and indeed our senior citizens, who are less likely to conduct or require more complex financial transactions, can satisfy their more limited banking needs free of charge in the six banks that control banking in this country.
The current Bill fails to address this issue. More important, Bill C-9 ignores the committee's second recommendation that financial institutions be prohibited from levying charges for a variety of services. For example, recommendation 2(D) states that financial institutions be prohibited from levying charges for any transaction which results from an error or unauthorized action by the bank.
Does it not make good sense that if a financial institution makes a mistake that the cost of that mistake is not incurred by the customer? It should be incurred by the bank. Why should such a recommendation not be adopted by the Government? Why also does this Bill not prohibit charges for closing accounts, inactive accounts, or maintaining a savings account when the balance falls below the amount specified by the bank? It is curious that these salient recommendations, which would undoubtedly be in the best interests of Canadian bank customers, were not included in the new legislation which is before the House today.
Perhaps the Hon. Minister of State for Finance would respond that these recommendations would be inconsistent with his government's position, that as he stated in this House competition, not regulation, is the best way to guarantee a fair and reasonable approach to establishing prices. Have you ever heard anything so foolish, Mr. Speaker? It insults the intelligence to think that competition among the six banks in this country is going to regulate these affairs rather than regulation.
This reasoning ignores two very important facts. First, it assumes that bank customers ought to have the right to be charged for services rendered by the financial institution. It suggests that competition will establish fair prices for the customer while not ensuring that no charges will be levied on certain services. It does not exclude the possibility, but it is highly unlikely, that a financial institution will voluntarily eliminate service charges.

June 19, 1989
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Second, perhaps more important, this is a "big city" perspective. What sort of competitive market forces does the Minister expect will come into play in small towns and rural Canada?
In many areas of my riding of Thunder Bay-Nipigon there is either a single or perhaps no financial institution at all. How would competition instead of regulation do anything to help many of the residents in northern Ontario, and in fact many sections of northern Canada? The provisions of this Bill intend to allow banks to have access to the costs associated with conducting their financial transaction at that institution. In theory this will allow a customer to select which bank provides the services sought by the individual or business at the lowest cost.
This might hold true in Toronto, Vancouver, Montreal or Winnipeg, but what are the implications for places such as Nipigon, Hurkett, Red Rock or Armstrong? This legislation does little or nothing for these communities. In fact, Armstrong, Ontario, a community of over 2,000 people 200 miles away from Thunder Bay has absolutely no financial institution at all and there and in many other areas there is little room for dissatisfaction with our financial institutions. In the smaller communities in northern Ontario the code which applies is usually "What you see is what you get".
Moreover, this legislation offers nothing to the many communities across Canada, and there are several in my riding, which desperately require the establishment of a financial institution. A Bill meant to increase competitiveness between banks will not assist these small places in northern Ontario.
It could be argued that increasing competition between financial institutions and prompting them to lower service charges will decrease their income, hence further reduce their incentive to set up comparatively more costly branches in rural communities. I would not find it surprising if such considerations were never given any thought by the Government. After all, in the name of competition, or more accurately, ignorance, the Government has also decided to abandon VIA Rail passenger service, shut down rural post offices, and deregulate air travel, reducing the quality and quantity of flights to rural and small town Canada. The Government is one thing, it is consistent in its disregard for northern Ontario. More important, the Government is consistent
in its complete disregard for rural and small town Canada.
The Canadian Federation of Independent Business concurs that increased competition will have a negative effect on small towns in Canada. It argues that since banks are now pursuing much larger accounts, because of deregulation, profit margins on big business lendings have been decreased. As a result, financial institutions are imposing larger and more numerous charges on small businesses. Greater competition has forced financial institutions to undertake cost-saving measures such as closing branches in small towns, leaving small businesses in the community without financial institutions with which to deal.
We in the Official Opposition are also very concerned about the need now to penalize businesses or persons who deposit a non-sufficient funds cheque into accounts. In its report to the House the Standing Committee on Finance and Economic Affairs stated: "It seems unfair to penalize someone who accepts a cheque in good faith and does not receive payment from the person who wrote the cheque. There may be other reasons why a cheque is returned unpaid, such as errors. The committee is of the view that those who issue cheques should be responsible for ensuring that payment follows. A depositor of a cheque should generally be assumed to act in good faith, and there should be no double penalty for one single error". Such a proposal makes good sense, especially for small businesses. The Canadian Federation of Independent Business is adamant that there should be no penalty imposed on the person who deposits the NSF cheque.
Does it seem fair that the owner of a small business with limited resources and facilities for verification is not only stuck with an NSF cheque but that a penalty must be paid as well for depositing such a cheque in this financial institution? It makes very little sense. Reason would dictate that the individual issuing such a cheque would be fully responsible and incur whatever penalties or costs there may be and it would be up to the financial institution to impose that charge.
As a result of this intervention I hope that the Government will consider its position with respect to rural and small-town Canada and its financial institutions. I hope it would consider its position with respect to seniors and the services that they should expect from our banking institutions, and consider its position with re-
June 19, 1989

spect to our young children and bring the necessary changes in the Bank Act before this House for approval.


The Acting Speaker (Mr. Paproski):: Questions and comments. The Hon. Member for Burin-St. George's.


Mr. Simmons:: Mr. Speaker, I want first of all to congratulate my friend for Thunder Bay-Nipigon (Mr. Comuzzi) for an outstanding speech, but more to the point, I thought a very compassionate treatment of a fairly difficult issue. It was a very inciteful approach to the matter. I want to congratulate him on that.
I can particularly identify with his concluding remarks, those which make an appeal to the Government. I see the Minister in his place and I saw him making notes. He is not an uncompassionate man. I would be prepared right now, Mr. Speaker, to take my seat if he would indicate even with a nod that he has not only heard the message but will respond to the excellent and very sensible plea put forward by my colleague for Thunder Bay-Nipigon.
This legislation, as I said when I spoke myself earlier in the debate, which seems weeks ago now, is a small step in the right direction. It could be a giant leap, I say to the Minister, if he would take the counsel of the gentleman for Thunder Bay-Nipigon-I was about to put a question.


The Acting Speaker (Mr. Paproski):: Yes, I wish the Hon. Member would. He should be commenting on the Hon. Member's speech and not on the Minister's remarks. The Hon. Member is a long time Member in this House. He knows exactly what he should be doing. I just thought I would remind him. I know that he is getting to asking the Hon. Member a question.


Roger Simmons: I thought I had mentioned the gentleman from Thunder Bay-Nipigon so often I was beginning to sound repetitive. I am prepared to do it, Mr. Speaker, even more often. I thought he gave a magnificent speech. He does not really leave a lot to question.
Bank Act
I guess my question for him, and it was in this context that I glanced over at the Minister who is there, being his attentive self tonight and I hope his compassionate self tonight, and I hope he would indicate to us-but let me put it to the Member, the future Minister, the Member for Thunder Bay-Nipigon instead. What reason has he to believe and what hope has he got that the excellent proposal he has made for improving the legislation, not dissimilar from the proposal which I have made during my speech, and with which I very much identify. What hope has he got? Has he got some signal from the Minister that maybe we can expect the changes that he has advocated to be incorporated in the legislation before it passes this House finally.


Joseph R. (Joe) Comuzzi: Mr. Speaker, if I can just comment that I know my friend and colleague is a long time Member of this House. As you know, Mr. Speaker, this is my first term. As a new Member, I am not used to those compliments.


An Hon. Member:: There is going to be more.


Joseph R. (Joe) Comuzzi: We should allow a little latitude with those with more seniority. I am hoping that with the recommendations which I have suggested in my intervention and in my remarks that the Minister, who happens to be in the House today, would listen to those very critical areas which we consider very important for rural and small town Canada. Those are the necessity and the needs of the services of our senior citizens in our country which require perhaps a little additional facility than is being provided to them today. In rural and small town Canada, those areas which are served by one financial institution, as I said, what you see is what you get. There is no competition in the financial institution in those small communities with 2,000, 3,000 or 4,000 people. There is only one banking facility. When we have only one banking facility, we do what the local banker insists that we do, especially if it is a small businessman in that area. When I was going to school some many years ago I can remember that it was-


An Hon. Member:: Four or five.


Joseph R. (Joe) Comuzzi: No, longer than four or five. They are very kind on this side of the House. They would come to school and they would say it is the wisdom of opening a bank account when we were young children with a paper route. We would go down to the bank and open an account. There would only be $2, $3 or $4 in that bank

June 19, 1989
Bank Act
account. Today there are going to be bank charges on those insignificant amounts. We want to train our young people how to become responsible citizens, how to be industrious, how to do the things that are so important for them to be good Canadians and good citizens of our country. Those are the type of things and those are the type of charges that we have got to prevent.
In answer to my colleague, it is hopeful that our suggestions and our recommendations are falling upon the compassionate ears of the Minister of State (Finance) (Mr. Loiselle).


The Acting Speaker (Mr. Paproski):: The Hon. Member for Beaches-Woodbine on a question or comment.


Mr. Young (Beaches-Woodbine):: Mr. Speaker, I also enjoyed listening to the remarks of the Hon. Member for Thunder Bay-Nipigon (Mr. Comuzzi) and especially the comments which he made about the minimum charges that banks make on minimum deposits. I recall that my daughter, who is 18 or so, who still goes to school and works quite hard on evenings and weekends, and tries to put some money in the bank, received a letter from her bank last week, as a matter of fact, advising her that if she did not maintain a minimum of $1,000 in the bank account that there would be a service charge levelled against it.
She not only thought this was unfair but I considered it to be outrageous, to say the least, particularly when you realize that banks over the last five years have had an annual rate of some 19 per cent and that they have generated over $1 billion a year on those kinds of service charges. It seems to me that these banks should be giving people like my kid and other Canadian kids a break, rather than going after them because they do not maintain $1,000 in a bank account.
My second question to the Hon. Member is, several years ago I happened to be in rural Ontario talking to farmers,, which is quite strange for a guy from the east end of Toronto but it was quite interesting. Those farmers told me of the tremendous problems which they face when a bank unilaterally closed a branch in their community. It created tremendous problems for farmers in that particular community where they relied on the bank to provide them with loans so that they could
continue to operate their farms. It seems to me that if these banks are going to be allowed to operate in the way that they do in Canada, the minimum they should be required to do is provide that basic kind of service, not only to the kids in the first part of my question but certainly to the farmers in this country who have contributed a great deal to the wealth and well-being of this country and Canadians.


Joseph R. (Joe) Comuzzi: Mr. Speaker, I thank my colleague on this side of the House for that question. Some years back when I was in business we called the minimum deposit the double interest type of charge. There was a period of time when the banks could only charge, if my memory serves me correctly, a certain rate of interest. In order to circumvent that rule, what they would say is that you would need a certain amount of money if you were in a small business, as I was for a number of years in Thunder Bay, but you would need to have a minimum deposit always on deposit in your bank. Those minimum deposits in a current account never drew any interest. The very fact that you had to have the minimum deposit in your line of credit meant that you were paying at that time a double rate of interest. That is what drew my mind when he was talking about his daughter of 18 years old and wanting to do banking with an institution in her community, that they would require at 18 years old to have a minimum deposit of $1,000 in the bank. It just does not make any sense.
I am sure that that $1,000 would not be drawing the rate of interest that would be going out on the other hand, which would be the loan that would be going out if she wanted to buy a car and needed $1,000. Those are the inequities that we are hoping can be addressed by the Minister of State responsible for this legislation.
The other problem that my friend also mentioned is the unilateral closing in small communities that he mentioned. I thank him very much for drawing to my attention, which I failed to do in my remarks, that small communities and farms throughout this country are affected when the local bank decides, for whatever reason, that it is not going to offer any further services.
I concur with him. I can see, Mr. Speaker, that you are getting ready to call it 10 o'clock.


The Acting Speaker (Mr. Paproski):: I am ready to call it 10 o'clock.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Maurice Foster (Algoma):: Mr. Speaker, on May 21 put a question to the Minister of Agriculture (Mr. Mazankowski) concerning a document which I had received from the Royal Bank of Canada. This resulted from the Government's action to freeze the income of Canadian farmers at the GATT. The decision was made and the Minister of Agriculture announced on April 14 that the Government was taking away the power of the Canadian Dairy Commission to raise the price of Canadian dairy products.
I do not think with regard to products going into international trade that there was a lot of dissatisfaction with this in the dairy industry because we are part of a global community in that regard. Farmers are concerned that their income is going to be frozen until 1991 on commodities which are used domestically. As a result of the Government's decision which was announced on April 14, the Royal Bank issued a memorandum to all of its lending institutions in the Ontario region saying they were concerned that the Canadian Marketing Boards and quotas would become a sacrificial lamb in the GATT negotiations.
We know that the Board of Directors of the Royal Bank of Canada and other large banking institutions are very close to the Government, and close to the Prime Minister (Mr. Mulroney). They obviously have a lot more information on this than the average Member in the House of Commons. This memorandum to all the Royal Bank branches is especially pertinent and of great concern to the Canadian dairy industry.
The Board of Directors go on to say that because the risk is so great of the whole marketing board structure being lost, they were withdrawing immediately 50 per cent of the value of quotas for the dairy industry and other supply-management industries for calculation of
Adjournment Debate
debt-equity ratios. They also went on to say that no quotas would be financed over a five-year period and that it would be necessary in some cases for branches to raise interest rates.
I asked the Minister of Agriculture why he was moving in this way, what was going on and what assistance and support would be provided to these producers who were losing in some cases 50 per cent of the value of their quotas for loan purposes.
The Minister really gave very little response. I was disheartened with that because this is a real problem for dairy producers across this country who want to renew or take out a new loan having the value of their quotas discounted by 50 per cent as far as providing equity in equity-loan ratios. I think the responsibility is on the Government. The Tories campaigned hard and long last fall saying that supply-management and marketing boards would be protected under the free trade deal, under the GATT deal, and yet supply-management and marketing boards are really under the gun as a result of the Government's actions. Clearly, it is not only the decision at the GATT to freeze farmers' incomes in 1991, it is the challenge which has been launched by the United States import controls which have been placed on yoghurt and ice cream. That issue, even though it has since gone into a free trade area with the United States, now challenges the right of the Government of Canada to impose import controls on milk constituents like yoghurt and ice cream. That subject is now at the GATT.
I am told that the chance of Canada winning that challenge is something less than a 50-50 chance. We not only have the prospect of larger imports from the United States with the tariff being removed over the next several years but also import controls not being effective at controlling those milk products coming from the U.S. The dairy industry has a great concern over this. The dairy farmers of Canada have published a long document in which they refute all the arguments the Government has made with regard to their position on the whole question of the dairy industry supply-management.
This Thursday morning in room 362 East Block, we will be holding a public forum in which we will give an opportunity to dairy farmers from across Canada to make presentations and express their concerns to the Government about how serious the matter is as a result of the Government's action, both in the free trade negotiations with the United States and the decision to

June 19, 1989
Adjournment Debate
freeze farmers' incomes for the next 20 months until 1991.


Mr. Bill Kempling (Burlington):: Mr. Speaker, I am pleased to answer on behalf of the Minister of Agriculture (Mr. Mazankowski). My understanding of the situation is that the Ontario district of the Royal Bank has decided to value quotas at 50 per cent of their face value rather than at full value, as it has done in the past when assessing the risk of loans to producers of supply-managed commodities. Lenders often discount the expected market value of assets based on their assessment of the marketability of those assets.
In Ontario, a recent court decision limits the security value of quota based on interpretation of the Provincial Marketing Act. This clearly has nothing to do with federal Government trade policy.
I wish to thank the Hon. Member for his concerns about farm market quotas. The Hon. Member has cited an internal document from the Royal Bank outlining changes to its lending policies on quota as evidence that federal trade policy is destroying Canada's supply-management systems. A representative of the Royal Bank has stated that the language used in the circular was inflammatory and should not have been used.
The Government has never waivered in its support of supply-management. We stood by this commitment when the Canada-U.S. Trade Agreement was negotiated and we continue to stand by it in the GATT negotiations.
As the Hon. Member knows, Article 11 of the GATT gives Canada the right to operate supply-management systems. We want to strengthen and clarify our Article 11 to guarantee this right over the long term. Because of the nature of GATT, however, we cannot negotiate this one article by itself. We would achieve nothing if we did not co-operate with other GATT members in a full review of the agreement.
The recent short-term measures agreed to in Geneva represent a necessary starting point for long-term negotiations on GATT rules for agricultural trade, including Article 11. During the course of negotiations, Canada and other countries have agreed not to raise any support prices to producers which are set above international market levels. These measures may not be perfectly fair
by country or commodity, but they are necessary to launch long-term negotiations.
Our national dairy policy does not operate in isolation from the rest of the world. There has been recognition in this round of talks that domestic support programs can lead to international trade distortion, so some shortterm adjustments may be required to guarantee a favourable long-term outcome.
It is unfortunate that these short-term measures and their impact on our dairy industry have been misinterpreted. We do not know yet what the latest cost of production data for industrial milk will show. Therefore, we do not know if the short-term measures will have any impact on the price of industrial milk.
The Government has been generous and flexible with dairy producers in the past. The target price for industrial milk is now $46.06 per hectolitre. It has remained at that level since February 1988, even though the cost of production formula indicated decreases on August 1, 1988, and February 1, 1989.
We have maintained the existing price because we were aware that drought was affecting feed costs in parts of the country. I can assure Members that banks do not set prices for milk quota. The value of the quota is set by producers based on what they are willing to pay for it. In Ontario, the average cost of buying dairy quota represents less than 7 per cent of the total farm assets. Therefore, the rest of the dairy farm assets are available as collateral if borrowing is required.
The Government remains committed to working with dairy producers and processors. It is the continuing co-operation of all participants that best assures the long-term success of Canada's dairy industry.


TRANSPORT-VIA RAIL-CONTINUED SERVICE OF ATLANTIC LIMITED
Mr. Bob Corbett (Fundy-Royal):: Mr. Speaker, as you are no doubt aware for many months, indeed going back for many years, I have been promoting the case for a substantial rail transportation system in the Dominion of Canada. I wish to reinforce the position that I have taken over that period of time with the Minister as a result of a question that I put to him in the latter part of May. I brought to his attention the fact that one of the major
June 19, 1989

trains out of the maritime provinces, the Atlantic Limited from Halifax to Montreal, was a well utilized train.
The important thing to recognize at this juncture in our efforts to attempt to address the deficit, which indeed we as Atlantic Canadians are no less prepared than any other Canadian to accept our responsibility for, is the fact that the rail transportation system in our nation has been something that we have long recognized in Atlantic Canada as one of the necessary links for us as Canadians to identify ourselves with in the rest of the nation.
This nation was forged on the system of the railway transportation links. In Atlantic Canada, it is not only a matter of building up our highway system or replacing one mode of transportation with another, as the Hon. Member for Carleton-Charlotte (Mr. Thompson) has repeatedly pointed out to the House of Commons. For a great many people in Atlantic Canada, it is the only communication link with members of the family who might have moved west because of varying economic reasons, or whatever the happenstance may be that they found it necessary to move to other parts of Canada.
I want to bring to the attention of the Minister, who rightly recognizes the concern of a mounting deficit on the part of rail transportation, that as responsible Canadians we must live up to our responsibility to future generations and address the mounting deficits. There has to be a continuity of our association in Atlantic Canada with the rest of Canada, and it cannot be arbitrarily cut off by a discontinuation of what we in Atlantic Canada have grown to accept as part of our historic relation to confederation.
I know you will relate to that, Mr. Speaker, being a westerner. To succeeding generations of Canadians who have grown up and travelled from one sea to the other, the rail communication links have meant a whole lot in our ability to relate to one another as Canadians. Indeed, no one on this side of the House would suggest that we continue with rail transportation links that are not well utilized, or where there are realistic alternative means of transportation.
Adjournment Debate
I want to hasten to add that road transportation from Atlantic Canada, the Maritimes, to Upper Canada is not a realistic alternative from our perspective. Indeed, it is recognized that in the Maritime provinces there is a population of approximately 1.7 million people and that in the two major transportation links, rail transportation and water transportation, there was in excess of 475,000 people who travelled just last year. That number is growing every year. Indeed, it represents far more than the figure of 3 per cent of the population that the Government often uses as an example of the few who are utilizing the rail transportation link.
It is with that in mind that I try to reinforce that in Atlantic Canada the number of people who utilize the main rail transportation link between that part of the country and the rest of the nation is far in excess of the 3 per cent figure. Practically half a million people in relationship to a population of 1.7 million in the Maritime provinces use that link. The majority of those are not from Upper Canada but are Maritimers who are travelling students, elderly people, people with no alternate means of transportation and individuals who want to continue their links with the rest of Canada. They depend on that rail transportation system to identify with the rest of Canada as being Canadians from Atlantic Canada. I want to reinforce that it is of no small consequence to those of us who live in the Maritime provinces. It is important that we recognize that there is a substantial number of Maritimers who depend upon that rail transportation system as being their support, their raison d'etre, for maintaining their identity as Canadians in this great dominion of ours.


Mr, Ross Belsher (Fraser Valley East):: Mr. Speaker, I want to thank the Hon. Member for Fundy-Royal (Mr. Corbett) for speaking out on behalf of the Atlantic region, which region he represents as a Member of this place.
As he knows, on May 3, 1989, VIA was asked to prepare and submit by June 30,1989, a new business plan that represents its new budget. This business plan will set out a course of action that sets out the budget realities. The new reference levels which decrease gradually from $541 million in 1989-90 to $250 million in 1993-94 reflect the Government's commitment to expenditure reduction and restraint.

June 19, 1989
Options which the Government expects the corporation to consider in developing its plan include productivity improvements, fare increases, the takeover of services by other interested parties, service reductions and route abandonments. No options are being ruled out. The one restriction that has been placed on such options is that rail passenger services to truly isolated communities along remote routes will be maintained.
As my colleague, the Hon. Minister of Transport (Mr. Bouchard) has stated, no decisions have been taken on the long-term future of rail passenger services in Canada. The impact of the new VIA budget cannot be determined until we hear from VIA with its new revised plan. Once thing is clear, however, these subsidies have been disproportionately large when compared to other modes. Last year alone they reached an unprecedented $641 million. This has been due to a large extent to the low level of VIA ridership. Rail passenger services
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currently retain only 3 per cent of the total Canadian intercity passenger traffic.
The air mode has a market share of 7 per cent. The automobile enjoys the lion's share of the market at 84 per cent, demonstrating Canadians' love affair with their cars.
Even the bus mode has a greater share of the market, being twice that of VIA, at 6 per cent. These figures clearly demonstrate that Canadians can no longer afford a service which is costing more and more and being used less and less.


The Acting Speaker (Mr. Paproski):: The motion that the House do now adjourn is deemed to be adopted.
The House therefore stands adjourned until 11 a.m. tomorrow, pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 10.21 p.m.
[Stage Direction]
Tuesday, June 20, 1989