1989-05-08

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38 Elizabeth II

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Published under authority of the Speaker of the House of Commons by the Queen's Printer for Canada
Available from Canada Communication Group - Publishing, Supply and Services Canada, Ottawa, Canada K1A 0S9.
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Monday, May 8, 1989
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Prayers
Mr. Deputy Speaker:: It is my duty to inform the House of the unavoidable absence of Mr. Speaker.



ROUTINE PROCEEDINGS


Hon. Monique Landry (Minister for External Relations):: Mr. Speaker: today, on the eighth of May, I rise in the House to draw your attention to International Red Cross Day and to pay tribute to the thousands of Canadians and millions of people all over the world who have dedicated their lives to promoting the humanitarian principles of the International Red Cross movement.
In 1988 and 1989, the International Red Cross is celebrating its 125th anniversary. As part of the celebrations, the International Red Cross Committee and the national associations have asked the governments of all countries to commemorate International Red Cross Day.
The Government of Canada, with its unfailing dedication to the ideals and principles of the Red Cross movement, wishes to make this day a special occasion.

Many Members will have noticed a special display outside the Parliament buildings containing the distinctive Red Cross flag. That flag was first flown in Canada by the founder of the Canadian Red Cross, Surgeon Major George Sterling Ryerson, during the North West Rebellion in 1885.
The Canadian Red Cross Society was later given official recognition in 1909 with the adoption by Parliament of the Canadian Red Cross Society Act. Mr. Speaker, the Government of Canada believes that one of
the most important functions of the Red Cross movement is the humanitarian assistance it provides to persons suffering the ravages of war. In an ideal world where armed conflict would be but a sad memory, such assistance would not be necessary. However, we are all tragically reminded on a daily basis of the utter havoc such conflicts can wreak and how we must strive to relieve the sufferings of the victims of those unfortunate events.

The Canadian Government, through the Canadian International Development Agency, has worked closely with the International Committee and the Canadian Red Cross to provide international assistance to those regions where armed conflicts are taking place.
Today, the Government wishes to announce that a contribution of $150,000 is being made through CIDA so that a Canadian medical and hospital team can be sent to Pakistan this August.
The team will be located in Peshawar, in Pakistan, where it will provide Afghan refugees with badly needed medical and hospital services.
Canada is also pleased to announce its participation in an independent international telecommunications network established by the Red Cross. The Canadian Government, through the Department of Communications, has granted permission to the Canadian Red Cross for establishing and operating a radio station that will be used to transmit and receive urgent messages.
By extending this telecommunications network to Canadian territory, the Red Cross will be able to organize relief operations more quickly and more lives will be saved.
One of the most important developments that occurred 125 years ago was the adoption of the first Geneva Convention for the protection of the victims of armed conflict. Since the adoption of that instrument, international humanitarian law has progressed, culminating in the adoption of the four 1949 Geneva Conventions, and the two additional Protocols of 1977.

May 8, 1989
Routine Proceedings
Canada ratified the Geneva Convention in 1965. It is the intention of the Government to table implementing legislation for the protocols in the House in the near future. Following parliamentary approval and Royal Assent, Canada would join those countries that have reaffirmed their commitment to international humanitarian principles through ratification of the protocols.

Mr. Speaker, Canada takes great satisfaction in joining countries throughout the world to celebrate International Red Cross Day.
Together with Canada's constant efforts to promote peace, security and stability throughout the world, our country's humanitarian action is dedicated to providing relief and protection to those in need.
On behalf of the Canadian Government, I wish to congratulate the International Red Cross movement and express our appreciation for its vitally needed humanitarian services.


Mr. Jesse Flis (Parkdale-High Park):: Mr. Speaker, I would like to congratulate the Minister for recognizing 125 years of hard work, devotion, and unmatched dedication toward helping the needy, the poor, and the dispossessed. This is the type of devotion that has made the Red Cross an institution that is the most widely recognized and respected and, in some instances, feared for its objective and truthful reporting of situations around the world.
Approaching the Parliament buildings this morning I noticed a most beautiful sight. I saw the Canadian Red Cross flags flanked by our beautiful Canadian flags. The maple leaf of the Canadian flag is becoming a symbol of peace around the world. That is Canada's reputation today, and I think that we should keep that reputation. The cross on the Red Cross flag is known around the world as a symbol of humanitarian assistance.
My first encounter with the Red Cross movement was back in my primary school days at Orpington Public School in Saskatchewan. The school no longer stands. However, in 1939, 1940, and 1941 the teacher asked the class to make little kits containing a bar of soap, a face towel, a comb, and a toothbrush. These went to help the
war effort. Other students were asked to knit something. I remember knitting a beautiful black and white scarf. Of course, to me it was beautiful. At the end of the month the teacher collected all the projects to send overseas. I remember as a grade two student crying, not wanting to part with this scarf that I had knitted for the Red Cross effort. However, I did part with it. You will be happy to know, Mr. Speaker, I can still knit today thanks to the Red Cross training that I received in the primary grades.
I am sure the Minister would not mind if I added to her comments about the importance of the Junior Red Cross movement in Canada. As a former educator, I know the importance of the Junior Red Cross movement. Classes can elect their own president, vice president, secretary, and treasurer. This teaches excellent leadership. Anything the class decides is again helping children in less advantaged countries.
Today there is an excellent program called "Child Alive". Students put together a package that contains water, salt, baking soda, and sugar. This package costs 10 cents. By contributing 10 cents to this package, children are saving thousands of lives through this rehydration program. The sole purpose of this little package is to help children who are dehydrated. This rehydration program saves thousands of lives.
Another excellent program with which the Minister would be pleased and impressed is the "Spellathon" program. Students collect pledges for the number of words they can spell. The money raised goes toward human development projects around the world. Those are only two of many projects in which the Junior Red Cross of Canada is involved.
I would also like to recognize the Youth Department of the Canadian Red Cross. That Department is involved in international youth exchanges. I was very pleased to hear that there will be such an exchange and a youth conference to be held in Solferino, Italy. Why is it important that students from around the world meet in Solferino, in northern Italy? Back in 1859 Henri Dunant, a Swiss, saw the thousands of wounded soldiers on the battlefield in pain, agony, and dying. He got a group of people together to do something for the wounded during the wars. This was the beginning of the world Red Cross movement.
May 8, 1989

I am very pleased that the International Red Cross movement will be hosting such a conference in Solferi-no with hundreds of youths gathering there from all over the world. I understand our Canadian students will be exchanging visits with African students, Italian students, and others. I know of no better organization than the Red Cross to develop "international students". Our students become international students through this type of movement.
Through two World Wars the Red Cross has operated at risk to its members to alleviate the suffering that results from conflict between countries and within the boundaries of any given country. It has transcended location, race, religion, culture, and language. It has transcended all those factors that create strife, and has succeeded with continuing aid from different countries.
What Surgeon Major George Sterling Ryerson had in mind when he first founded the Canadian Red Cross during the Northwest rebellion in 1885, has blossomed into a movement that involves every single one of us Canadians, man, woman and child. On a daily basis we hear of wars and civil strife in every part of our world, and then we hear of the Red Cross efforts. As much as possible it gives us some comfort that the suffering and pain is not ignored. If the Red Cross is active, some of the pain and suffering will be dealt with in an effective and compassionate manner.
When the bombing in Lebanon escalated, CIDA worked in conjunction with the Red Cross to distribute food, clothing, and medical aid to the people suffering from the increased fighting. On this side of the House, we urged for more help. We asked that more assistance be given to those people who had fled Beirut for neighbouring countries, because the Red Cross cannot do it alone. It needs international help.
On this side of the House, we are disappointed that there will not be an increase in moneys that we can offer the Red Cross to continue its effort. We are disappointed, as are all Canadians, that the Canadian commitment to humanitarian aid is not as strong as we had hoped. I know that this is no fault of the Minister, because I know that she would like to see the funding go up to .7 of GNP instead of the .43 announced in the Budget. I think we should remind ourselves that poverty and hunger breed anger and hostility, which eventually leads to conflicts and wars. By making an investment now to prevent hunger and poverty we save ourselves billions of dollars and we save this planet billions of dollars.
Routine Proceedings
I would ask the Minister, as a gesture to the important work carried out by this organization, to rescind the cuts that were imposed on CIDA in the last Budget. This would be a gesture that would truly celebrate the 125 years that the Red Cross has been in existence.
Ms. Lynn Hunter (Saanich

Gulf Islands): Mr. Speaker, let me begin by commending the world organization of the Red Cross on its 125th anniversary. This organization does excellent work both within Canada and overseas to alleviate suffering. It responds to real human needs in the event of natural disasters such as hurricanes and earthquakes, but also carries out the dangerous work in war zones. The work is not only dangerous, it is dirty and depressing.
I had the opportunity to see the commendable work the Red Cross does in Africa under very difficult circumstances.
When I arrived on Parliament Hill this morning and saw the Red Cross flag, flanked by Canadian flags, I remembered the Red Cross flags that I saw in Africa. They were a symbol of hope and a symbol of safety.
I think Canadians should take pride in the kind of contributions we have made to the Red Cross in its efforts to provide medical supplies, clothing and shelter in situations of war and natural disasters.
One aspect of Red Cross work that is not so well known is its work with refugees and prisoners of war. The International Committee of the Red Cross is one of the sole agencies that monitors the treatment of prisoners of war. When I was in Africa I went to a prisoner of war camp with a Red Cross representative, where 7,000 young men were harboured during the last five to seven years. The International Committee of the Red Cross was attempting to repatriate them to their homeland.
It is those kinds of workers to whom we pay tribute today on this 125th anniversary. The same man with whom I visited the prisoner of war camp had just returned from similar work with refugees in El Salvador. He was subjected to bombardment and intimidation by the Government of El Salvador, but that did not stop him because people like him are committed to doing the real work that must be done in situations of war. It is those people who try to alleviate the suffering in those situations to which our geopolitical position has contributed.

May 8, 1989
Routine Proceedings
While I commend the Minister's tribute to the International Red Cross, and agree that there should be a strong humanitarian gesture, we must also be conscious that we are not simply building a bigger band-aid while cutting funds for real development work that will bring long-term solutions to poverty and suffering. That is exactly what the Government of Canada is doing in its most recent Budget. It has cut funds for overseas development assistance while maintaining constant funds for the type of work done by the International Red Cross.
While I celebrate International Red Cross Day, it is with real sadness because the Government of Canada has reneged on its promise to try to contribute to solving the world's problems in development work. It is only contributing to building a bigger band-aid.


PLANT BREEDERS' RIGHTS ACT
Hon. Don Mazankowski (Deputy Prime Minister, President of the Privy Council and Minister of Agriculture) moved: for leave to introduce Bill C-15, an Act respecting plant breeders' rights.


Mr. Deputy Speaker:: Shall the Hon. Minister have leave to introduce the said Bill?


Some Hon. Members:: Agreed.


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Motion agreed to, Bill read the first time and ordered to be printed.

Mr. Don Blenkarn (Mississauga South) moved: for leave to introduce Bill C-238, an Act to amend the Interest Act.


Mr. Deputy Speaker:: Shall the Hon. Member have leave to introduce the said Bill?


Some Hon. Members:: Agreed.


Donald Alex Blenkarn: Mr. Speaker, this Bill is one that I believe is required to deal with the problem with the way interest is calculated by companies selling goods on
credit by credit cards. Some companies charge interest, even though there has been partial payment, right back to the date of the purchase of the goods when sending out their invoice for the next period to the holders of the cards. Others just charge back to the original billing date.
This Bill requires all companies to charge only from the billing date and only charge interest on a monthly basis, not on a daily interest basis. The current system of interest charges is, in my view, totally unfair to the consumer. This amendment to the Interest Act is necessary.


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Motion agreed to, Bill read the first time and ordered to be printed.

Mr. Derek Blackburn (Brant):: Mr. Speaker, I rise under the provisions of Standing Order 36 to present a petition signed by several people living in the Ottawa area who want to bring to the attention of the Government the fact that bank service charges have been increasing at an average of 19 per cent per year, which is five times the rate of inflation. They argue that voluntary agreements and industry self-regulation have a poor record of success among Canadian corporations. They call upon the Parliament of Canada to pass legislation that would regulate and control bank service charges and provide consumer protection to banking Canadians.


Mr. Nelson A. Riis (Kamloops):: Mr. Speaker, it is an honour to present a petition pursuant to Standing Order 36 on behalf of a number of Canadians who show that 41 per cent of social assistance recipients in Ontario are children. This percentage is higher in other provinces in Canada.
They point out that in all regions of Canada social assistance recipients live well below the poverty line as defined by Statistics Canada. They are asking Parliament to consider the advisability of increasing funding for social programs that are delivered by the federal Government, transferring payments for programs delivered by the provinces, and working with the provinces to raise social assistance rates to at least the poverty line.
May 8, 1989


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


Mr. Deputy Speaker:: Shall all questions stand?


Some Hon. Members:: Agreed.


Mr. Jim Fulton (Skeena):: Mr. Speaker, I rise pursuant to Standing Order 52 to request an emergency debate on the impact of chemical waste in fuels on the health of Canadians and on our environment.
Just as Governments and the public have reached a heightened state of understanding of the urgent need to keep toxic and hazardous waste out of the environment, we learn of the organized criminal activity of mixing hazardous chemical wastes such as PCBs and solvents into fuel and selling it to various firms and gas stations.
There is a particularly grisly side to this criminal activity. Canadians have been knowingly exposed to materials shown to cause brain, nerve, liver and skin disorders, and of exposure to toxics known to kill.
These are crimes that involve hundreds of millions of dollars in illegal gains. An emergency debate is absolutely necessary to ensure Canadians of the concern of Parliament, to widen public knowledge of the dangers posed by the tainted fuels, to encourage anyone with knowledge of these life-threatening crimes to contact immediately law enforcement agencies, to awaken Parliament to the need for stronger enforcement and compliance procedures for cradle to grave handling of toxics, to awaken Parliament to the need for follow-up health and environmental impact assessments, and to launch the full force of the law against the criminals before they disappear with their ill-gotten gains.
This is an emergency. I believe that debate is required now.


Some Hon. Members:: Hear, hear!


Mr. Deputy Speaker:: The matter raised by the Hon. Member is no doubt a very important one. Unfortunate-
The Budget-Hon. B. Bouchard
ly, the Chair must find at this time that it does not meet the requirements of Standing Order 52.


Mr. Deputy Speaker:: Order. I wish to inform the House that because of the Minister's statement, Government Orders will be extended 18 minutes past one o'clock today.



GOVERNMENT ORDERS


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The House resumed from Wednesday, May 3, 1989, consideration of the motion of Mr. Wilson (Etobicoke Centre) that this House approves in general the budgetary policy of the Government, and the amendment of Mr. MacLaren that the motion be amended by deleting all the words after the word "That" and substituting the following therefor:
"this House regrets that the Government has imposed unfair taxes and has cut vital programs, including child care, regional development and agriculture, in an effort to reduce its annual deficit, despite the fact that this effort has been rendered futile by the Government's ill-conceived high interest rate policy; and
That this House condemns the Government for pursuing these policies that fall most onerously upon lower and middle-income Canadians and that are certain to hinder the further development of the Canadian economy."
Hon. Benoit Bouchard (Minister of Transport):: Mr. Speaker, it is a pleasure to take part today in this debate on a Budget that is about responsibility, about the future and about the challenges that Canadians must face in the years to come.
Mr. Speaker, last month the Throne Speech gave us a vision of the future based on economic growth, diminishing disparity, protection of the environment and the preservation of adequate and generous social programs for those who really need them. What we see today in the Budget brought down by the Minister of Finance are the means to achieve those goals.
Today's political reality has changed. Yesterday's politicians-we were not among them, unfortunately-managed abundance. And even after abundance had become a thing of the past, their successors in the early eighties governed as though nothing had changed, which

May 8, 1989
The Budget-Hon. B. Bouchard
explains the deficit we inherited in 1984 and which we are still struggling to control.
The extent of the deficit made it necessary for us to make some difficult choices. However, those choices produced results. They have helped us to reduce the deficit and bring the inflation rate down to acceptable levels. Thanks to responsible financial management and concrete action, our economic growth rate is one of the highest among the world's major industrialized countries.
Budgetary responsibility and the state of the economy are two concepts that are closely linked. We cannot, Mr. Speaker, neglect one without compromising the other. They have both, however, reached a stage that will be crucial for Canada's future.
At a time when national economies are becoming increasingly open and free trade offers us tremendous scope for development, there are a number of basic conditions that must be met: Canadians must be competitive, they must be trained, and they must be technologically advanced. There is also a broader but nevertheless essential condition: the Canadian economy must be capable of sustained growth.
All this cannot be fully achieved with the kind of deficit we have today and with a national debt that costs us more than one-third of each dollar that we spend.
Mr. Speaker, Members on all sides of the House cherish certain values that are very much of this country. We all believe, for example, that the state must maintain many high-quality social services. We believe that the state must fight regional disparities and that environmental protection remains an absolute priority. We all believe in the need for national standards for the distribution of services.
Well, if we all believe in these objectives, we must ensure that our economy can maintain them. But that is not all, Mr. Speaker. There is also an important question of moral responsibility to future generations. We do not have the right to leave our children in straitened circumstances because of an uncontrollable debt burden.
And the Budget presented to the House by the Minister of Finance (Mr. Wilson) is not an easy one to present, but it had to be done if responsibility means anything. This Budget is not only forward-looking. It also deals with today's realities, Mr. Speaker. The measures proposed to us by the Finance Minister are a
solid foundation for our economic prosperity in the 1990s. The measures to control the deficit and public debt are a key to the future of this country. And the measures designed to establish a framework for longterm economic growth are also essential.
Mr. Speaker, the same reasoning applies to the Department that I direct. Transport has always been the motor of the economy. It is, so to speak, the arteries through which circulate the agricultural commodities, raw materials and finished products that feed this country's economy.
The various modes of transport account for 4.8 per cent of our gross domestic product and 3.9 per cent of our total employment. Every day, 130,000 Canadians travel from one city to another using commercial transport and every day, the Canadian transport system handles 1.9 million tonnes of merchandise of various kinds.
Mr. Speaker, over these last few years, we have been committed to providing Canadians with a transportation system that is first of all safe, reliable and efficient and that in every way promotes the freedom to move which lies at the heart of what Canada is about. Since free trade with the United States is a reality, the contribution of transportation will be even more decisive for our future economic development.

Pre-confederation Canada had to struggle constantly to meet its transportation challenges. This rugged land of vast spaces needed unifying bonds. Our early needs for unification were met through the realization of Sir John A. Macdonald's grand dream of a transcontinental railway. The openings of the St. Lawrence Seaway and the Trans-Canada Highway in 1959 and 1962 had enormous positive impact on economic development and transportation. Our expanding airways and communications have reduced the size of the country. We are all now truly neighbours in this great nation.
Transportation must continue to play its vital role as we enter the next decade and the next century. In looking forward I see a transportation system with at least these four essential elements.
First, it will be safe. Second, it will be efficient and effective. That is to say it will make the. best use of each mode of transportation: air, rail, marine, car, truck and bus. Third, it will be responsive. That is to say it will meet the needs of shippers and travellers. Fourth, it will be
May 8, 1989

innovative, both in the use of technology and in the service it offers.
How do we achieve this vision? Our action plan for transportation has many parts. First and foremost, as always, it has to be safe. Safety will never be compromised. Canada already has an excellent safety record, but we must be vigilant. We must seize every possible opportunity to improve it.
Having said that, we have implemented over the last four years strong legislation and measures to ensure the safety of those who use our transportation.

In 1985, we passed amendments to the Aeronautics Act. In 1987, we proposed improvements to the Canada Shipping Act. Last year, we presented new legislation on rail transport safety.
Furthermore, we have negotiated a national safety code for trucks and buses with the provinces, for which we pay a large part of the costs.
Finally, on April 7 in this House, I tabled Bill C-2 to create an independent multimodal board of inquiry for transportation accidents. The Standing Committee is now considering this Bill and we hope, Mr. Speaker, that it will be passed soon.
Our constant concern for transportation safety is also reflected in the Budget of the Finance Minister (Mr. Wilson). No safety-related activity has been reduced as a result of budgetary decisions.

Our action plan does include the transportation items in the Budget now before us. The objective of the branch line rehabilitation program to improve and upgrade the rail branch line system for western grain has largely been achieved so the program is being terminated one year earlier than planned. This will ensure that more innovative and cost-effective ways of transporting western grain will be developed.
The Budget also proposes to end the At and East grain and flour rail subsidy program. The At and East subsidy has outlived its original purpose which was to assist in the competitive development of Canadian routes and ports for export trade. Our Canadian ports are now successful and can compete effectively against their U.S. counterparts. Therefore, this subsidy is a non-essential expense to the taxpayers of Canada and its elimination is consistent with our commitment to sound transportation policy.
The Budget-Hon. B. Bouchard


Some Hon. Members:: Hear, hear!


Benoît Bouchard: Mr. Speaker, as we called on all areas of Government to take on a share caused by the deficit, we decided to stop the pattern of ever increasing subsidies given to VIA Rail. Indeed, Canadians can no longer afford to pay an average $100 every time someone takes a train, a service that only represents 3 to 5 per cent of all inter-city travel in Canada, and further, 25 per cent of Transport Canada's budget.
The Government expects the financial and operational performance of VIA Rail to improve and function in a more cost effective manner. To begin the process of rationalizing the operations of VIA Rail in a most cost effective new regime of rail passenger service, the reference levels for VIA Rail have been reduced to $541 million this year and will continue to be reduced further in the years to come.
Now that the reference levels have been established, VIA Rail will prepare a new business plan that respects the new fiscal realities that Canadians can afford. However, service to truly isolated communities will be maintained.
The Government has distinguished itself during the past four years through fiscal responsibility and judicial allocation of the federal-provincial financial resources. When money is scarce it is spent where it is most needed, where it is most likely to produce results.
Improved efficiency in the way transportation is managed will give rise to better co-ordination, particularly in the surface mode. We are developing a wide multi-modal approach that will allow better co-ordination of transportation. Close co-operation with all modes, especially surface is essential when planning our marine transportation policy.
Cost recovery in marine transportation is an issue of vital importance to my Department.
We are now developing a cost-recovery policy for marine and other modes of transportation to support deficit reduction and overall system efficiency. Such a policy will be responsible and fair, and will be finalized only after full consultation with the industry.

This increased demand, Mr. Speaker, has come at a price. As a result- Mr. Speaker, I shall go back- Fortunately, I am coming to the air sector, where demand, as you know, has grown tremendously in recent years. So much so, Mr. Speaker, that I have skipped over some of my papers!

May 8, 1989
The Budget-Hon. B. Bouchard
Air carriers have done what they had to do. They have been extremely innovative, they have replaced outdated equipment, they have changed service levels and their operating strategy. They have also implemented many ways to improve system efficiency.
Now, Mr. Speaker, this increase has also come at a price-a serious congestion problem. The industry is always asking us to increase airport capacity, to clear more aircraft for takeoff and landing and to give priority to commercial flights.
This increase in air traffic has aroused some public concern, especially regarding safety and noise pollution and also level of service and fares.
But we must say that the answer to the problem of increased air traffic must take account of divergent concerns and interests. However, we do intend to consult both the public and the industry to find answers and solutions.

In this regard, the Minister of State for Transport (Mrs. Martin) and I met extensively with many groups and individuals in the Toronto area about congestion at Pearson International Airport. The construction of Terminal 3 will alleviate some congestion and inconvenience but numerous problems remain. We are preparing an overall strategy to resolve the problems that air travellers are experiencing throughout southwestern Ontario. This type of approach will also be taken in seeking solutions to capacity problems at Vancouver International Airport.
The initiatives that we are proposing, and those we shall put forward in the coming months, will be dictated by the imperatives of the Budget in addition to renewed concern for ensuring transportation safety and efficiency.
There are many other issues that I would hope to deal with here but what is important in today's debate is to consider the facts and the reality of the measures that are contained in the Budget statement.

Mr. Speaker, the Government has shown that while preparing the future, we have not neglected the essential needs of the present.
I asked Canadians to look at the facts. I also ask them, when they judge this Budget, to consider the spirit in which it was made. The reason we are taking difficult measures today is that we are managing an inheritance bequeathed to us by others. Personally, I do not wish to
leave future governments a fiscal heritage like the one we had in 1984 and which we will have to grapple with for many more years.
We are convinced, as we have shown in the past, that responsible management of public finances is much better than a short-sighted policy. What is at issue here, Mr. Speaker, is whether we wish to maintain the Canada we know and of which we are proud: a country committed to growth, to reducing inequalities, to compassion for the less fortunate, a country that wants to face the challenges of the environment, peace and openness to the world with firmness and generosity.
These challenges are not one Government's alone, Mr. Speaker. They belong to a whole generation of Canadians in every walk of life who have a basic responsibility: to leave their children as much opportunity for development as we had.


Mr. Allmand:: Mr. Speaker, again this morning we have a Minister of the Crown supporting this Budget because he says it is necessary to deal with the deficit. I want to ask the Minister, who was a member of the Cabinet before the election, where was he during the pre-electoral period last summer and during the election campaign when the Government was making promises and commitments in the amount of $17 billion? The Government did not mention the deficit during the election campaign and did not mention any requirement for cutting programs-old age pensions, family allowances or unemployment insurance. As a matter of fact, the Government said the opposite during that period of time. The Government did not alarm the country with the problem of the debt or the deficit. Immediately after the election the Tories discovered the deficit. They discovered this deficit and then in the Budget before this House, the Tories have brought in drastically increased taxation and severe cuts in important programs for Canadians.
I want to ask the Minister, and I put it to him straight, as a member of the Cabinet for the last three or four years, and especially as a member of the Cabinet last summer in the pre-electoral period and during the election campaign, is he telling the Canadian people and this House that he was not aware of the deficit, that he was not aware of the national debt, that he was not aware of the need to curtail expenses and to deal with the economic situation? Is he telling Canadians that he only knew about this problem after the election?
May 8, 1989


Benoît Bouchard: Mr. Speaker, I have been a member of this Cabinet since 1984 and with very great pride. Since 1984 we have had to cope with a deficit that we inherited from a Government which played a major part in the development of that deficit long before 1984.


William Warren Allmand: That is why you made $17 billion in promises.


Benoît Bouchard: The Member for Notre-Dame-de-Grace (Mr. Allmand) is one of the most experienced former Ministers of the former Government. He knows very well how his Government wasted the people's money from 1970 on, but particularly in 1984.
I said in my speech that the 1970s were the years of abundance. Money was spread everywhere without for one minute having in mind what would happen after that period of time. What we faced in 1984 was a $38 million deficit which had to be reduced. It has been reduced and that is the bottom line.
In four years, the Liberal Party created a debt of about $225 billion. We tried to reduce it and we have succeeded. But it is obvious that we could not cure all the illnesses that the former Government created over 15 or 20 years.
The Member for Notre-Dame-de-Grace knows, because he was in this House of Commons as I was, that almost every day, every week since 1984, the Minister of Finance (Mr. Wilson) or other Ministers have raised the problem of the deficit which we have been able to lower.


William Warren Allmand: It was $17 billion in promises.


Benoît Bouchard: That is why Canadians made their decision on November 21. They knew what we did. They knew what the Liberals did previously. That is why we are still on this side of the House. I think you have your answer, Mr. Speaker. Canadians had confidence in 1984 and 1988 because they believed that what we did then we will continue to do. We will carry on. When we look at the reality of today we see it is a tough, responsible Budget. We do not look back at yesterday. We need people for today and tomorrow.


Mr. Benjamin:: Mr. Speaker, the Minister of Transport (Mr. Bouchard) and his three predecessors made state-
The Budget-Hon. B. Bouchard
ments about providing VIA Rail with new locomotives which they have done, and new rolling stock which would put VIA Rail in a position of cost recovery and reduce its dependency on the national treasury by $300 million to $400 million a year. He and his three incompetent predecessors have spent more money fixing up old passenger cars than what it would cost to purchase new ones. When will the Minister put an end to that nonsense and exercise some sound business practices in the operation of VIA Rail?


Mr. Milliken:: After they close it down.


Benoît Bouchard: Mr. Speaker, this Government and the previous Government have spent $5.4 billion since 1977.


Leslie Gordon Benjamin: Good money after bad.


Benoît Bouchard: I listened to the Member, I hope he will listen to me. Since 1984 we have added $1.2 billion and $600 million in capital to that. We face the same prospect in 1989 as we did in 1984. The question is not what kind of service we give first but what amount of money we can afford to spend on a mode of transportation which only 3 per cent of Canadians use. We have a limited budget. The Member knows that. The NDP always have money to spend, because it is not expensive for them. We told people we had an explosion in air travel and many other modes of transport but not in passenger rail transportation. Six million Canadians have travelled. Twenty-five per cent of all money expended is on air service compared with 3 per cent of Canadians using rail passenger service. We have to face the reality of today and decide on the most effective way of spending the money allocated in the Budget for the DOT. We will spend $541 million, $435 million, $395 million, $275 million and $250 million on rail passenger service over the next five years.


Mr. Assad:: Mr. Speaker, my comments are directed to the Minister of Transport. I would like to raise a local issue, and I am referring to Western Quebec. I am aware that there has been a lot of correspondence between the Minister and the Quebec Minister of Transport. Even his own colleague-she agrees with me-even his own colleague from Argenteuil-Papineau (Mrs. Bourgault)

May 8, 1989
The Budget-Ms. Callbeck
raised the matter of Highway 50, which is essential to the economic development of Western Quebec. In 1972, a federal-provincial agreement provided for the construction of the section from Hull to Buckingham. Subsequently, there were annual attempts to obtain another federal-provincial agreement. The Minister is getting a lot of mail. He has heard Quebec's views on the subject. Since his own colleague and the Government of Quebec are requesting it, why can he not consider the possibility of negotiating a federal-provincial agreement for the extension of Highway 50 to Lachute and Mirabel Airport?


Benoît Bouchard: Mr. Speaker, I agree we have had a lot of correspondence on the matter with the Government of Quebec. The federal Government, however, is not primarily responsible for highways. That responsibility lies with the Government of Quebec, which is entirely free to build roads as it sees fit. If it wants to build the section between Masson and Lachute, it is entirely free to do so. The real problem is the agreement. There is an agreement between Quebec and the federal Government that was signed in 1985 and expires in 1990, and we shall see whether the agreement is renewed next year. The fact remains that the Government of Quebec never made Highway 50 a priority, and not only that, it has always stated, through Mr. Cote, that development of this section of Highway 50 would have to be done under an agreement. I must say I share that view. This means that we will first see whether the agreement is renewed in 1990, and if that is the case, the Government of Quebec will tell us exactly what its priorities are.
In the list produced by Mr. Cote, Highway 30 was higher than Highway 50 and involved a federal contribution of $100 million for a bridge over the St. Lawrence Seaway near Valleyfield.
I am not saying that Highway 50 will not be built but, I repeat, Quebec will have to define its priorities under a new agreement, and when it does, we will see what happens. I repeat, it is a mistake to think that the Government of Quebec is not free to build. In fact, it is the province's responsibility. The federal Government is not responsible for roads. That is Quebec's responsibility.
You will notice that I did not approach this subject in my speech because roads are a provincial responsibility. I
am not saying it will not be done, but it will have to be done under an agreement to be negotiated at a later date.


Ms. Catherine Callbeck (Malpeque):: Mr. Speaker, on April 27, Canadians and the people of Prince Edward Island woke to the news that the federal Budget had been leaked after the alleged theft of one of its documents. Now, as the effects of this Budget slowly begin to sink in, I can tell the Government one thing for sure. The people of my province wish that the entire Budget had been stolen and never found.
Nevertheless, critics and commentators have been coming up with the winners and the losers in this year's Budget. It is not hard to figure out into which category the Province of Prince Edward Island fits. The Government's Budget has hit every aspect of the Prince Edward Island economy. The most brutal blow came from the announcement that CFB Summerside was listed for closure.
The impact of this callous decision is yet to be fully realized. Yet, together with the increases in personal income tax, increases in excise tax, increases in the federal sales tax, cut-backs in regional development, cut-backs in the funding of hospitals and education, and the list is never-ending, Islanders are the real losers. The Government's plan to introduce a national sales tax in 1991 will place another burden on the Island's fragile economy. All in all, the 1989 federal government Budget is devastating to the Province of Prince Edward Island.
When the Prime Minister (Mr. Mulroney), was last in Prince Edward Island, he spoke in Summerside during the fall election campaign. He spoke to the area's senior citizens. He commended the gathering, advising them that they personified the core values on which this nation was built. He identified those values as being the family, the community and the countiy. These values also represent the heart and soul of Prince Edward Island, but it is these values which have been most abused by the recent Budget.
Islanders are proud of their heritage and their role in Canada's development. Our motto reads, "The small under the protection of the great". After this Budget, our motto should be changed to read, "The small left to fend for itself".
May 8, 1989

Prince Edward Island was thrown into a state of disbelief when it was confirmed that CFB Summerside was slotted for closure. One cannot image the impact this decision had on the Prince Edward Island economy. It appears that every aspect of our life will be seriously affected by the closure of the Summerside base.
The Canadian Forces Base at Summerside cannot close. The Government must be held accountable for this decision. The process whereby this decision was made is as questionable as the end result. There were no consultations. There were no warnings. Islanders were stunned by this news, and as the reality of the decision hit home, so did the reality of the cost.
The base closure will remove over $50 million annually from the economy of Prince Edward Island. The job losses will be astronomical. In fact, 1,300 jobs will be lost or 10 per cent of the whole Summerside and area population. The figure of 1,300 refers to jobs directly affiliated with the base. Another 2,000 indirect jobs are at stake if the federal Government closes CFB Summer-side.
As my colleague, the Hon. Member for Egmont (Mr. McGuire), asked in his question to the Prime Minister last week, how can the Prime Minister possibly justify the closure of the only military base in the province? Is Prince Edward Island, a province within Canada's federation, not entitled to participate and fairly share in the economic activity generated through the defence efforts of our country? CFB Summerside is the only military base in the province, and to remove it as proposed is effectively to say to Islanders that the Government does not recognize its obligations. My colleagues from the Island and I are determined to recognize our obligations and to represent the interests of our constituents. The decision to close the Summerside base is completely unacceptable.
The federal Government has devalued life on Prince Edward Island. After the news about the base was out, property values plummeted overnight. Numerous property deals have fallen through and the phones in Summerside real estate offices are now painfully silent. The burden that has been placed on Islanders is monumental.
The Budget-Ms. Callbeck
This Government must be made to understand that it cannot pull tens of millions of dollars out of the Prince Edward Island economy without any thought for the people that it will so drastically affect. It is the Canadian people who my colleagues and I on this side of the House are most concerned about. Like all Canadians, however, Islanders are forced to deal with the Budget realities as they affect the individual. We must deal with them in conjunction with our economic disparity and the pending doom of the CFB Summerside closure.
The Island's three major industries will be affected by this year's tax increases and budget cuts. Farming, fishing and tourism will all suffer because of the Budget. The changes in the personal income tax, the federal sales tax hikes, the unemployment insurance program changes, the reduction in transfer payments, cuts to regional development programs will all contribute to make life more difficult for the individual Islander.
One of the hardest hit industries is agriculture, the main industry in my riding. It remains the most important sector of the Island's economy. Yet the Government has chosen to attack this industry. In Prince Edward Island, the Government's slashing adds up to enormous losses in revenue for the farmers. To give you some examples, the elimination of the interest subsidy on the Advance Payments for Crops Act amounts to an annual rebate loss of $350,000 to the farmers of Prince Edward Island. This program provides producers of storable crops with interest-free government guaranteed loans at harvest time. The objective is to ensure that producers can obtain cash in advance from lenders on the strength of their marketable crops.
Just this morning, Mr. Speaker, I received a letter from the Prince Edward Island Vegetable Growers Co-operative. They are very concerned about this amendment to the Advance Payments for Crops Act. I want to share some of those concerns with this House, and I quote:
The ACPA is the tool that provides the necessary financing to the producer allowing them to store product rather than placing it on the market at harvest time and depressing prices at that time and during the rest of the season. Since government supports orderly marketing and import replacements, it should not abandon a program that has been instrumental and successful in achieving these goals.

May 8, 1989
The Budget-Ms. Callbeck
This loan will no longer be available on an interest-free basis which means that the producer, the farmer, will lose. The farmers are also being penalized as a result of the Government's phasing out of the fuel tax rebate program. The reduced rebate on the gasoline and diesel fuel totals approximately $450,000 in lost revenue to the farmers of Prince Edward Island in any year. That is an annual loss of $450,000. We cannot forget that the farmers will also be subject to the same tax increases, the personal surcharge, the federal sales tax, the excise tax, as they are all Canadians. It appears that this Government is eroding those things which identify our province as Prince Edward Island.
Crop insurance, an important factor for farmers, was targeted in the Budget as being under negotiation. This means that the federal Government hopes to place a greater burden on the provincial Government in cost sharing for crop insurance. This would add up to approximately half a million dollars a year in contributions from the Prince Edward Island's provincial purse. Tourism contributes approximately $100 million annually to the Prince Edward Island economy. It employs roughly 11,000 people. On Prince Edward Island we do not have a large industrial base. We do not have oil or vast natural resources. But we do know how to treat tourists. We are good at it, as the numbers that I have just indicated show. Tourism is helping my province catch up to the rest of Canada to ensure a fair standard of living for our people. But the federal Government's failure to renew the $11 million tourism and marketing agreement will mean fewer tourists. Add to this the Government's additional $5 million reduction in international tourism marketing efforts, and you will see why Islanders feel threatened, why they feel frustrated and why they feel angry at this Government.
This Government has cast a shadow on the long-term future of tourism in Prince Edward Island throwing this province open to long-term pain. In the ACOA estimates, the Government says in the short term, and I quote:
There will be significantly less funds for Atlantic regional
development than has been planned.
Add these two facts together and you get the theme of this Budget: Short-term pain for long-term pain.
The many beaches which dot Prince Edward Island's coastline also shore the Island's other industry, fisheries. Yet this is another target which will be hurt in the name of the Government's deficit control. Like farmers, fishermen will also suffer as a result of the Budget's elimination of the rebate on gasoline and diesel fuel. The money allocated to the Department of Fisheries and Oceans for small crafts and harbours is just not enough. Again it is the fishermen who will suffer.
This past weekend, Mr. Speaker, the effects of this Government's under-funding hit home. Last Friday two lobster boats were caught in the silt due to lack of dredging in my riding. This Budget is inadequate. More funding is imperative to maintain the wharfs and properly dredge the harbours so that our fishermen will be safe and secure.
The security of Islanders, of all Canadians, has been affected by the decision to reduce transfer payments to the provinces. The growth rate reduction on established program funding of 1 per cent every year for the next five years represents an erosion of federal support to Prince Edward Island for health and post-secondary education. It amounts to $1 million in 1990 to 1991 and $1.5 million in 1991 and 1992. It seems that the federal Government is trying to pass its debt on the provinces.
As for health care, this amounts to reducing the deficit on the backs of the ill. The federal Government has also cut the funding to universities at a time when our future depends so heavily on the educated workforce.
For a Government which ran an election campaign on managing change and preparing Canada for the future, its commitment to ensuring quality health care, research and education is questionable to say the least. However, the Government does appear to be committed to dipping further and further into the pockets of individuals across Canada. It has increased surtax from 3 per cent to 5 per cent on incomes under $50,000. It has increased tax on long distance phone calls. It has increased tax on cable television. It has increased excise taxes. It has increased federal sales tax. It has increased tax on gasoline. The list goes on and on. All of those increases have a notable effect on the personal disposable incomes of Canadians.
There are many people in my riding who are barely making it from one pay-cheque to the next. How will they be able to cope with all those tax increases?
May 8, 1989

The Government's reformed unemployment insurance is making Canadians pay higher premiums, and making the unemployed pay for their own training. I feel that the poor and the unemployed should not be required to finance retraining schemes that are the responsibility of the federal Government.
The Conservative Government promised many training programs to help those who lost their jobs because of the Free Trade Agreement. They were promised, but now those promises have evaporated and the programs have disappeared. Instead, the Government will finance those promises by taking money from those who can least afford it.
The federal Government's new sales tax is not so national. The Government was unable to secure the agreement of the other provinces. Therefore, in 1991 the feds will be going it alone. This new sales tax will apply to haircuts, drycleaning, and a long list of items that have never been taxed before. It will also apply to transportation, which will amount to a tax on distance. Islanders are distant from the great economic hub of central Canada. The Government is penalizing us for our geographic location.
In closing I should like to say that I hope the Government will come to terms with the severity of the Budget, and recognize the unbearable and unreasonable burden that it has placed on the people of Prince Edward Island.


Mr. Deputy Speaker:: On questions and comments, the Minister of State for Finance.


Mr. Loiselle:: I would like to tell the Elon. Member for Malpeque (Ms. Callbeck) that I do not share her somber view of the effect of this Budget, which the Hon. Member will find out in time is a very good Budget. The Government has never hidden the fact that it is a difficult and a severe Budget, and with that I would agree with the Hon. Member.
The Hon. Member will certainly agree with me that the country is facing a most difficult and serious situation, and we have to tackle it. In a certain way the remarks of gloom and doom reminded me of the remarks we heard on that side of the House four years ago after the presentation of the first Budget of the Mulroney Government. We heard about recession. I believe the Hon. Member for Malpeque would agree with me that far from recession, we went through an outstanding period of economic success and job creation. I would like
The Budget-Ms. Callbeck
to challenge the Hon. Member to discuss this again in the coming years. She will see that her province has not been hit as she attempted to tell us this morning.
I would like to remind the Hon. Member that in all the programs to which she has referred, equalization programs and regional development programs, and so on, the amount of money which will be passed on to the provinces will be increased. Therefore, it is difficult to see that the Budget could have the very negative impact discussed by the Hon. Member. The worst thing that could happen to Prince Edward Island and the other provinces would occur if we were not to tackle the very serious situation we are in. We are very confident that the measures we have taken will cause the interest rates to come down, will diminish the inflationary pressure, and will eventually create conditions where everybody in Canada, including those in Prince Edward Island, will benefit.
If none of the necessary cuts that we have made are to the particular liking of the Hon. Member, I would like her to indicate to us what type of programs we should diminish in order to face the deficit and the national debt.


Catherine S. Callbeck: I thank the Hon. Member for his question. I have been trying to point out that the people of Prince Edward Island feel that this Budget is unfair in that they have been asked to share a too large and unreasonable part of the burden.
Islanders are certainly fair-minded people. They do not mind doing their part as Canadians to help achieve the national goals such as deficit reduction. I am saying that the Budget is too much of a price to pay. It is apparent to Islanders that the longer they have for the Budget to sink in, the more they will be paying than their fair share. This is what we object to.


Mr. Deputy Speaker:: On questions and comments, the Hon. Member for Mississauga South.


Donald Alex Blenkarn: I was pleased to listen to the Hon. Member for Malpeque (Ms. Callbeck). I was wondering where she stood on a couple of issues that are important for economic development in her province. As the Hon. Member knows, there has been a proposal for a fixed link which would substantially improve tourism. There seems to be a bit of reticence in her province to go ahead with that, even though it could be financed privately, but with the assistance of the Government.

May 8. 1989
The Budget-Mr. Couture
Second, there was a provision where we were prepared to assist in financing further nuclear power through Laprade 2 in New Brunswick, or even the first Laprade effort there.
Where does the Hon. Member stand with respect to nuclear power? It would substantially cut the hydro electric power costs to people on the Island, and improve the economy of farming, and the economy of the Island generally. These issues would improve the quality of life of Islanders. They have been proposed. Where does the Hon. Member stand on those types of things that would build a bigger pie?


Catherine S. Callbeck: I thank the Hon. Member for his questions. As the Hon. Member knows, there was a lot of discussion on the fixed link during the election campaign. I stated then that I agreed with the fixed link, but the agreement was conditional on addressing the environmental concerns, and that the people who worked with CN Marine had to be treated fairly, as did the Town of Borden.
Is the Hon. Member aware at the moment that there is an IRAP panel that has been appointed? The names were released last week. It will be holding hearings on the Island within the very near future. I believe the hearings will commence in June.
We do have the highest electricity rates in Canada. That affects our industry, farming, fisheries, and processing. I would be very pleased indeed to sit down and discuss any idea that would help lower those rates on Prince Edward Island.


Gilles Loiselle: Mr. Speaker, the Hon. Member referred to the goods and services tax that will come into effect in early 1991. She said the fact that the provinces did not come on stream with us for a national sales tax was an indication that our tax was not good.
I remind her that any such tax reform, in any case, is a very difficult thing to achieve. When there are 10 provinces that already have a sales tax which works, I must say, much more fairly than ours, it is not an easy achievement. Many of the provinces, such as Alberta, were not at all keen to come on stream. We could not wait forever.
I remind her that the present federal sales tax does exist and is presently paid by the taxpayers of her province. It is a very negative tax, which has a very negative impact. All the indications we have at this stage
are that as a result of the general sales tax the East, particularly her province, would profit from that reform. Could she comment on that particular aspect?


Catherine S. Callbeck: Mr.Speaker, I have not been privy to any of those figures. I believe this new tax will hit the consumers. It is a regressive tax because it will hit the poor people the most.
Ruth Robinson, President of the Consumers' Association of Canada, said that she believed the Government is waging its crusade against the deficit on the backs of the consumer, that the Budget amounts to a staggering consumption tax grab, and that it is lower and middle-income people who will suffer. I would be interested to see those figures.


Mr. Deputy Speaker:: Continuing debate. The Hon. Member for Saint-Jean (Mr. Couture) has the floor.


Mr. Clement Couture (Saint-Jean):: Mr. Speaker, Canada must take up the major challenge of reducing the deficit and the national debt.
We are quite partial to our social programs, our high standard of living, economic freedom, sovereignty at home and respect abroad. That is the kind of Canada we must leave to our children and we will do so if we face in a united and positive fashion the most important challenge confronting us.
We are faced in Canada with a major problem: an enormous and growing public debt. The interests on that debt are also increasing at a rapid rate. Only 20 years ago, to service the debt it only cost 12 cents out of every dollar which Canadian taxpayers paid to Ottawa. Four and a half years ago, it had already gone up to 32 cents out of every dollar. This year, it will exceed 35 cents.
Twenty years ago, Canada had no deficit and the national debt amounted to only $18 billion. In those days, we could easily afford the costs of servicing our debt.
It is in 1970 that the problem of annual deficit really started. Although relatively small at first, the deficit kept increasing from year to year, so that in 1984-85, the annual deficit exceeded $38 billion and the natinal debt had reached a record high of $233.5 billion. The reality which characterizes a debt is that it perpetuates itself. Each year, taxpayers provide new revenues a large part of which serves only to pay the interests on a growing debt. Future generations would never be able to pay off this debt if we allowed this situation to worsen.
May 8, 1989

Mr. Speaker, our Government has decided to take steps to end this mortgaging of our future by using available resources to reduce the annual deficit to less than $15 billion by 1993.
This will contribute to a progressive reduction of the public debt. We have managed to reduce the growth rate of the debt, from 24 per cent as it was in 1984, to less than 10 per cent last year. In spite of this effort, the debt continues to grow faster than our national revenues. On April 1 this year, our national debt amounted to $320 billion.
The recent rise in interest rates both in Canada and abroad illustrates the vulnerable situation in which this enormous debt is placing us. In only one year, the costs resulting from the interest on our debt have increased by over $6 billion. This year, we are going to pay $39 billion in interest. This has to stop, and the sooner the better.
In its Budget the Government proposes some concrete measures. In a climate of sustainable economic growth which is of major importance, the Government proposes to limit its expenditures and increase its revenues. It has decided not to purchase nuclear submarines. It has already closed seven military bases and will limit the activities of seven others, which will represent a saving of $2.7 billion from 1989 to 1994. It has cut its subsidies to VIA Rail by at least $100 million per year for the next four years. It has cut its subsidies to the CBC by $10 million per year for the next five years. The total costs of the unemployment insurance program is now fully supported by both employees and employers.
However, in periods of extreme hardship, the Gov-ernement would only support the fund if it faced a deficit thereby realizing a net saving of $600 million.
The government will reduce the growth of transfer payments to the provinces beginning in 1990-91, but equalization payments to lower-income provinces will remain. These equalization payments totalled $5.4 million in 1984-85. They will increase by 35 per cent in 1989-90 to $7.3 million.
With regard to foreign aid, over a five-year period, the government will reduce the growth of its expenditures by about $1.7 billion.
The government has also taken some steps to increase its revenues. These decisions are always hard to make, but are necessary given our present situation.
The Budget-Mr. Couture
Taxes on gasoline and cigarettes are going up, bringing in an additional $1.6 billion. Canada Post, now under a dynamic and healthy management, will be paying a dividend to the government. Taxes will be levied on corporate capital in excess of $10 million. The surtax will increase by 2 per cent beginning July 1, 1989, and an additional surtax of 3 per cent will be applied to taxpayers with annual income in excess of $70,000.
On January 1, 1991, the government will replace the existing federal sales taxe with a Goods and Services Tax at a rate of 9 per cent. The existing sales tax suffers from three failings: it has been called a porous tax, because it is an increasingly unreliable source of revenues for the federal government; it is hidden from consumers; and is damaging to the Canadian economy, since it is limiting economic growth and job creation.
The new 9 per cent tax will be paid on most goods and services, except basic groceries, prescription drugs, medical devices, residential rents, loans, mortgages, life-insurance premiums, most health and dental services, including hospital and home services, daycare, legal aid and most educational services. Measures will be introduced to make implementation fair and simple.
As for small businesses, the Government proposes to give them fees for collecting the tax. Over half a million small businesses won't have to collect this tax.
Charities and non-profit organizations funded to a large extent by the state will benefit from a generous reduction of the tax owing on their purchases.
Sales of food from farmers and fishermen will be tax-exempt. In addition, the Govemement will vote a special measure guaranteeing that the tax will not make new housing unaffordable and sales of existing homes will not be taxed. It will also give a partial discount to municipalities, universities, schools and hospitals, so that tax reform does not increase their tax burden.
The Government wants its new strategy to promote equity. That is why it is committed to ensuring that the new tax is more equitable to low-income Canadians than the present system. It will enhance the present sales tax credit by making it refundable, even if low-income taxpayers do not have any income tax to pay. Moreover, the credit will be paid four times a year. This new tax on goods and services will benefit people throughout the country.

May 8, 1989
The Budget-Mr. Barrett
The Government's objective is to ensure that families earning less than $30,000 a year will be better off after all thoses measures, including the tax on goods and services, have been implemented.
That measure, which is aggressive, economically sound and fair to the disadvantaged, will help the Governe-ment reduce its deficit and therefore its accumulated debt.
The Government also announced a 35-per-cent increase in regional development aid over the next five years in comparison with the last five years.
Our Budget is a serious one and forced us to make difficult choices and to make decisions affecting the majority of Canadians while protecting the least fortunate. It's the middle term between reducing the annual deficit and the debt and sustaining economic growth.
Both sides of the House must join forces to reduce the debt and the deficit and to finally eliminate that major problem.


Gilles Loiselle: Mr. Speaker, I would like to congratulate the Hon. Member for Saint-Jean (Mr. Couture) for his statement and in particular for the information he gave us concerning the new tax on products and services and the explanation he gave us regarding how it will be applied. We hear a lot of nonsense about this modern tax which is in effect in most industrial countries. And I would like to remind you that this tax, in any event, makes those who spend the most pay and certainly protects those with more modest incomes because it will be accompanied by very significant tax credits so that a couple whose income is less than $30,000 will be better off than before.
So I thank him and I would like him perhaps to tell us a little about how it will be applied or the difficulties or solutions to decrease the difficulties it could pose for small businesses.


Clément Couture: We know to begin with that there will be a little over half a million small businesses that will not be affected at all, that will not have to collect this tax.
We also know that the Government wants to help small business collect this tax by paying for this service. I
think, from that, we can certainly say the Government will do everything, will use every means at its disposal to make this tax easy to apply and make it very much to everyone's advantage by replacing the present sales tax that we know.


Mr. David Barrett (Esquimalt-Juan de Fuca):: Mr. Speaker, from the outset I want to say how disappointed I am in the Budget presented by the Conservative Government which is different from the Conservative Party that was running in the election campaign. We saw two different developments occur in the Budget. There were the promises and statements made during the campaign and the reality of what members of the Government did when they came back.
My good friend from the Liberal Party, the Hon. Member for Notre-Dame-de-Grace (Mr. Allmand), asked the Minister of Transport (Mr. Bouchard) how come he is now concerned about the deficit and debt when during the time of the election campaign he and his colleagues did not say a single thing about it. Yet the debt has doubled since 1984 when the Conservatives were first elected. What a fraud this Government is.
I am amazed at the nerve and cheek of the government Members who stand up and say the wonderful things they will do. They talk about the help they will give to the people of Canada. In that regard I wish to examine some statistics to show what is happening to the rich who are getting away with fiscal murder while the ordinary workers and families of Canada are being squeezed like lemons by a Government which does not give a fig about how they survive.
I find it interesting that in his speech the Minister of Transport never once mentioned the Polar 8, the icebreaker that was to protect our sovereignty in the North. It was to say to the Americans and the Soviets: "Don't worry, there is our Polar 8. It is our presence and a statement of our sovereignty". Its construction has been stalled for another year. The Government has twice asked the company which is building it to present plans. When I asked the Department about the second plans, I was told they had not received them, even though they were mailed two weeks earlier.
May 8, 1989

The Government is simply out of control. It is a Government by the rich, of the rich and for the rich. There is no other way to describe it.
I now want to talk about the profits of banks. When the Canadian Commercial Bank went broke the Conservatives came up with $800 million to bail it out. That was $800 million of taxpayers' money which was used to bail out a private bank. I thought that the Tories were free enterprisers. I thought they believed that people have the God-given right to go broke. However, while they bailed out the bank another phenomenon developed. That phenomenon is known as the food bank. Under the Conservatives food banks are just like the bread lines of the 1930s. Yet Members opposite laugh. They think it is funny. The major newspaper in the City of Ottawa has a sign on the side of its trucks which states: "Give to the food bank", as if it were some institutionalized charity in which everyone should get involved. We did not have food banks 10 years ago.
If the food banks asked for $800 million to bail them out so that people could eat, would the Government provide the money? The answer is no. Its priorities are mixed up. Financial institutions that go broke do not deserve any help from the Government. What the food banks should do is change their names. They should call themselves the Canadian Commercial Bank and then they will receive $800 million to bail them out. What an indignity, what a loss of self-respect. Every day people line up for food while the Government speaks only for the rich and the large corporations and does not give a fig about ordinary people who are out of jobs, who need work, who need some succour and comfort.
Members opposite did not mention the food banks. They do not mention even a regret that the unemployed are suffering. There is not a word in the Budget about ordinary people who are stuck at the bottom end of the scale.
Yet in actual fact, people are losing ground economically because of the stupid fiscal policies that are geared toward only one sector: the rich, let us look at the Government reports to get a frame of reference of what is happening in this country. I make reference to the labour force features, "Trend in Labour Income", September, 1988, of Statistics Canada. I am referring to page 97, just a quick quote based on the charts that are here. "Over a 13-year period"-four of the last of course have been under the Tories-"growth in wages and salaries did not keep pace with inflation as real average wages and adjusted salaries fell one per cent between 1975 and 1987. After adjusting by the Consumer Price Index,
The Budget-Mr. Barrett
seven of the 12 annual gains in wages and salaries have become losses".
These are the people who are being hit for more taxes. The statistics show that the average wage earner, men and women in this country, over the last 13 years have lost ground in disposable income, lost ground in terms of where they were 13 years ago, and what has happened is more taxes have been added.
Let us look at the impact of taxes on Canadians. Among the working poor, for a family earning $24,000, the taxes between 1984 and 1988 went up under the Conservatives by 44 per cent.


Some Hon. Members:: Shame.


David Barrett: Forty-four per cent.


Some Hon. Members:: Shame.


David Barrett: Is that good for the ordinary person in this countiy? For a person in a middle income group earning $49,000 a year, the taxes went up 10 per cent.
Here is the pain, here is the suffering, here is the philosophical angst that the Tories have provided.
For an upper income family earning $122,000 a year, under the first four years of the Tory Government the taxes went down by 5.9 per cent.


Some Hon. Members:: Shame.


David Barrett: This Government is geared toward serving the rich. Let us look at the over-all trend with the impact of this current Budget and incorporate it into 1984 to 1991. Let us go back to the working poor family earning $24,000. With the impact of the new Budget, the working poors' tax increase will go up, in seven years with the old Tory budget and the present one, 60 per cent.
The middle income group, the people earning $49,000 or less, their taxes will go up by 17 per cent. However, do not worry, folks, all the richees out there who are watching their money is being protected by a Government that protects the rich, all those over $122,000 will have a decrease of 6.4 per cent of their share of taxes under this present Budget.


An Hon. Member:: Shame on the Tories.


David Barrett: Why does this come about? This comes about because this Government is inextricably bound to the vested interests of the non-competitive wealthy in this country. This is a Government that talks about free enterprise. This is a Government that is always harping about the business of initiative. This is a Government that also defers taxes, if a corporation that has massive profits defers taxes and borrows money to acquire a competing company in order to move into a monopoly

May 8. 1989
The Budget-Mr. Barrett
position, this Government will allow you to deduct the interest on money borrowed when another company is acquired. It is a capitalist, octopus monopoly approach that guarantees that the wealthy maintain their control of the resources of this country and the devil take the hindmost.


An Hon. Member:: They control the Tories.


David Barrett: Certainly they control the Tories. I am coming to that, Mr. Member. I am glad you mentioned that because it is more than just guesswork. Let me read to you how they control the Tories. Here is a list of the people who donate to the Conservative Party. They get their moneys worth. This Government proves the old adage that Canada has the best politicians that money can buy.
Let us take a look at what is being donated here. The Bank of Montreal, $40,000 to the Tories; Banque Nation-ale de Canada, $47,000 to the Tories. Bombardier Company, $27,300; Brascan, $22,0000; Burns Fry; $64,000; Campeau Corporation, $17,000.


An Hon. Member:: They are a bunch of pikers.


David Barrett: Sure they are pikers. We do not see what other money is geared into at local candidates. Does it feel any remorse about taking money from the people being protected? Not at all. It is serving its masters well over there.
It is a big corporation Government and pays back in kind what it gets from these campaign donations.


An Hon. Member:: Right on.


David Barrett: Let us take a look at this same corporate list of donors and what the corporations are paying. These are profitable companies that pay no taxes. I do not want my colleagues to be upset when I read this list and I do not want to hear from the Government any crocodile tears when it finds out who is really getting hurt. The Liberal party is not much better. Its only anger is that it is not at the same teat that it was before now that it is out of power. It is the same group over there that got money before and served the same master. The only difference between the Liberal Party and the Conservative Party is that one is in power and the other is out. That is all.
In 1986, Alcan Aluminum had profits of $220 million and got a tax credit of $32 million. It did not pay a penny. Brascan had profits of $187 million and a tax credit of $2.3 million. Hees International had a total profit of $170 million. No taxes were paid. Power Financial Corporation had profits of $132 million and a tax credit of $1 million. Wardair had profits of $70 million. No taxes were paid. PWA had profits totalling $39 million. No taxes were paid. Repap Enterprises had a total profit of $34 million. No taxes were paid. Union Carbide Canada had profits of $28 million. No taxes were paid. Vermillion had profits totalling $51 million. No taxes were paid. Cadillac Fairview had profits totalling $37 million and a tax credit of $12 million. Hudson's Bay Company had profits totalling $50 million and a tax credit of $15 million. The list goes on and on. In the list you find page after page of corporate rip-offs of people who are not paying taxes. I did not find one worker from INCO on this list.
I did not find one worker from McMillan Bloedel on this list. I did not find one security guard who gets paid as a civil servant on this list. I did not find one working mother who has three or four children to raise on this list. This is the corporate elite of this country who are being served by a Government that is looking after its interests and its interests alone.
The Minister came in piously in defence of his hypocrisy on the position he took, saying: "Well, things are different now. We did not know during the election campaign how things were." He stands up in his defence, and I find it very interesting, he leans across the House and in his senatorial voice and says: "What would you do about it? What would you do about it? We have got a serious problem over here, what would you do about it?" Is that the defence of this Government?
Of course he would lean over to the Liberal Party and say: "What would you do about it". It would do exactly the same thing.


An Hon. Member:: Rubbish.


David Barrett: I will tell you what I would suggest it did before. These tax policies were inherited by the Liberal Party which served the same corporate masters in this country, the same board rooms, the same old gang. It is out of power. The only change that took place was when it had for the first time in years a national leader in the
May 8, 1989

Hon. Leader of the Opposition (Mr. Turner) who decided to abandon his Bay Street roots and tell it straight to Canadian people, and the people who knifed him most were not the Tories but his own Party. That is the end of that kind of reform talk in the Liberal Party, you can believe me.
Let us take a look at-


An Hon. Member:: What absolute rubbish.


David Barrett: What absolute rubbish? I suffered under Liberal Governments. I know what I am talking about. I have seen Liberal Governments. At least the Tory Party has less guile than the Liberal Party does. It does not make any mistake about it. No mistake about it, it is serving its masters without any complication or soft words. The Liberal Party had always adopted a policy of being left when it is out of office and right when it is in office.
Let us take a look at what is going on for these untaxed corporations and see how their senior leadership is responding to the need for restraint. I want to tell you, my friends, the senior executives have shown a willingness to set an example for the Canadian taxpayer. Let us take a look at the business finance section of The Financial Post dated April 10, 1989. This is how they show restraint when they set up their Chamber of Commerce meetings and stand up and say: "Oh, we have to tighten our belts. Oh, times are tough here in Canada. Oh, yes, we workers cannot ask for more wages. Oh, yes, if you take too much money home then it will just hurt the economy." Let us take a look at the who's who in the $500,000 club in this time of restraint. Do you think they give to the food bank? What was their charity donation to the United Appeal, Mr. Speaker? Here is Mr. Drabinsky, Cineplex-Odeon Corporation who is now earning $3,868,000 a year. The change in last year alone was a 28 per cent increase in salary. There is a great sacrifice. At least he did not take a 35 per cent increase.
Then we go down the list here and let us take a look at another one. Here is a good one. D. J. Phillips, chairman and president, chief executive officer of INCO. He earns $1,993,734. Poor baby, he only got a 12 per cent increase last year. Let us hear it for poor Mr. Phillips. He was hosed.
Let us go down the list some more. Here is another one. William James, chairman and president and chief executive officer of Lalconbridge, a company not on our
The Budget-Mr. Barrett
Party's donation list. He earned $1,689,000, a change last year of a 28 per cent increase. I go down this whole list and see 12 per cent, 13 per cent increases. Here is a dandy. Here is a guy, Edward MacDonald, executive vice-president of the Seagram Company, salary, $788,000. He got only a 30 per cent increase in his salary last year.
These are the same industrial barons who control that Government over there, who pay for this Government's election and, at the same time, can hardly take their snoot out of the trough and go for overwhelming increases. They have the unmitigated gall to tell workers and single parents in this country: "We cannot afford to give you any more services. We cannot afford to give you a raise in pay".


Mr. Rodriguez:: They all vote Tory.


David Barrett: This is the most crass commitment by any Government toward the power elite.
Two minutes, Mr. Speaker?


Mr. Deputy Speaker:: Yes.


David Barrett: That is longer than this Government has to stay in office.
I want to read a list to you, in summary, from Statistics Canada of what is really going on in this country based on your own statistics. Sir. I will use my last two minutes to peel off some of these important discoveries.
Three million, six hundred and eight-nine thousand people, or 14 per cent of women, men and children in this country live below the poverty line. Eight hundred and fifty-one thousand, or 12 per cent of all families or 34 per cent of unattached Canadians, have low incomes. Newfoundlanders have the highest poverty rates-22 per cent of all Newfoundlanders-21 per cent of the province's families and 49 per cent of the unattached individuals are poor.
Ontario has the lowest poverty rates, 10 per cent of all persons, 8 per cent of all families. Lour in ten Canadian families are headed by women, 38 per cent are poor compared to only one in ten families led by men. No programs for women, cancellation of day care which forces them into poverty levels that the Government's own statistics show are totally inequitable. There are over one million poor children under the age of 16 in Canada, which comes to 17 per cent of the total or one child in six. Of the total of 1,016,000 low income children, 610,000 or 60 per cent live in two-parent families; 361,000 or 35 per cent are in single-parent families. Newfoundland has the highest incidence of

May 8. 1989
The Budget-Mr Barrett
child poverty, 26 per cent of children under the age of 16 are poor in the Province of Newfoundland. That is because of the Minister for International Trade (Mr. Crosbie) who should be renamed the king of closures because of the Free Trade Agreement and the jobs that are lost in this country. Not a word, not a fig, not a mention of the poor. Not a word, not a fig, not a mention of the low income earners in the Budget. You do not give a damn, Mr. Speaker. You do not care about ordinary people. You are just happy you got re-elected and you think it is a big joke to go through another four years of the same hypocrisy.
It is amoral to treat poor Canadians this way. But it is not a problem for this Government because it is an amoral Government.


Some Hon. Members:: Hear, hear!


Donald Alex Blenkarn: Mr. Speaker, my friend went on and on about banks, food banks and compared them to the Canadian Commercial Bank and said something about massive bank bail-outs. Does he not appreciate that the people who were assisted were people who had money on deposit with those banks? They were ordinary folk, small businesses and municipalities. I think his own municipality of Esquimalt had money on deposit in one of those banks. Certainly credit unions had money on deposit. Does the Hon. Member not appreciate what would happen if the Government had not come forward and assisted those people, businesses, boards of education, credit unions, and all the rest?


An Hon. Member:: And senior citizens.


Donald Alex Blenkarn: People in western Canada would have been severely damaged. His attitude is that they should have been damaged, that people in western Canada ought to have been ripped off, damaged and destroyed by the Government not assisting them with banking.
I agree, Mr. Speaker, that having food banks are a disgrace. They are a disgrace because provinces do not use the Canada Assistance Plan to the extent to which they are entitled. This Hon. Member knows that. He was the Premier of a province that did not use the Canada Assistance Plan enough to solve food bank problems. I say to you that he does not know what he is talking about. What he says is great rhetoric in great speeches, but says nothing about the Budget.


David Barrett: Mr. Speaker, I hoped that that Hon. Member would have kept his own counsel and said what he said over a cup of coffee.
I would like to talk about the Canadian Commercial Bank. Anything above a guaranteed rate under the Canadian banking insurance program is money lost. If, however, this Government is announcing a policy that it will pay out money lost on those bank accounts, then why did the Government not pay out money to the thousands of people who lost their life savings in Principal Trust? There was a lack of supervision. There was not a peep, not a word from the Government about Principal Trust.


Donald Alex Blenkarn: Principal Trust was all looked after, every bit of it.


David Barrett: Oh, there it is, Mr. Speaker. All those people who want their money back, just write the Hon. Member and he will see that they get their cheques-everybody out there who is still missing money.
This Hon. Member has the cheek and the nerve that can only be explained by the fact that he does not understand the present Budget. The transfer payments in this Budget are being cut, Mr. Speaker.


Mr. Nystrom:: Transfer payments are being cut back by over $200 million.


David Barrett: I find it interesting that the Tories in their right-wing rhetoric try to blame everything on everyone else. They are going to hand out billions of dollars to the oil companies. They are going to hand out $2 billion to Opsco without even asking for a share in what it is they are investing the money of the Canadian people. Did the Member talk about that? What about the Lloydminster plant and Hibernia? I have nothing against those projects. But why give the money away? If it is Canadian taxpayers' money, then we want a share of those investments, not give it away. The Hon. Member doesn't mention anything about that. We know it is always the poor that they hold up and say should be sacrificed.
The Hon. Member mentioned British Columbia in the 1970s. We were attacked in British Columbia by rightwingers like that Member for spending money on welfare. We had balanced budgets and we did not have food banks in the Province of British Columbia.
May 8, 1989

This pious nincompoop Government tells the religious communities that they are to feed the poor. Even the religious communities have turned against that kind of selfish, avaricious Government. The Canadian Council of Catholic Bishops issued a statement to the Liberal Government on the same issue. The Liberal Government did not pay attention, to its peril. The situation has now been compounded. The Canadian Council of Catholic Bishops has made very clear what it thinks of Governments that are as amoral as this Government and former Liberal Governments have been, Governments that do not give a fig for ordinary, poor people in Canada.
The people of Canada are restive. They are hearing claptrap from that Hon. Member, a Member I like very much. He is a nice Member in normal circumstances. When I hear that kind of claptrap from him, I realize that he too has missed the message.
We are a lucky people. We are here in Ottawa, well-fed, well-tended to and isolated in Ottawa, but I pointed out to the Hon. Member what is going on in Newfoundland. In the regions, the same poverty exists. The Government has done nothing about poverty. It does not care. It never has cared.


Mr. Soetens:: Mr. Speaker, I listened with great interest to the answer to the question that was just asked of the Hon. Member, and the Hon. Member was able to blabber on making all kinds of comments, none of which related to the question. I will try to keep my question rather simple so that the Hon. Member can understand it and perhaps answer it in the same fashion.
The Hon. Member has attacked our Party because we supposedly took all these donations from some businesses that like to support our cause. I would like to ask him about his views on certain issues. Mr. White, a well-known member of the Party of which the Hon. Member is supposedly a member as well, had supplied to him by the CAW a lovely country estate in the Province of Ontario. Mr. White also takes full salary while the union in the province in which he is active is on strike. Most important, in my riding, the local NDP candidate received a donation 12 times greater than that given by any private corporate donor to any Party in my constituency. I would like to know if the Hon. Member really believes that a donation of the magnitude which the
The Budget-Mr Barrett
CAW contributes to its Party should simply go unannounced and unaudited, or should the CAW go back to its membership to confirm that its members like the political donations it has been making and that its leadership should get all the freebies it gets from the union?


David Barrett: Mr. Speaker, I, by the grace of God, am not a poor person. I benefited from parents who worked their way through the depression to provide their children with a good education. I am not embarrassed by the fact that I am successful and modestly wealthy, but I do have a moral commitment to those who are not as lucky as I, and to use that analogy is sheer stupidity. However, I will embark upon some explanation of the Hon. Member's stupidity.
The trade union movement has made a commitment to talk to its members about donations. When was the last time a bank called a meeting of its shareholders to ask if it should give money to politicians? When was the last time Inco sent letters to its shareholders asking permission to give money to the Liberals or the Conservatives? If there is one shareholder in Canada who got such a letter, I would like to see that letter. No such permission is received. The deals are made in the boardrooms of Canada.
In closing, I would like to repeat what has happened to working people by using the Government's own statistics. Over a 13 year period, growth in wages and salaries did not keep pace with inflation. Average wages and salaries fell 1 per cent between 1975 and 1987. After adjusting the consumer price index, seven of the 12 annual gains in wages and salaries became losses. I urge the trade union movement to give more money to the New Democratic Party in order to get rid of this inequity that exists.


Mr. Deputy Speaker:: Is there unanimous consent to call it one o'clock?


Some Hon. Members:: Agreed.


Mr. Deputy Speaker:: It being one o'clock, I do not leave the Chair until two o'clock.
At 1.15 the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
[Stage Direction]
May 8, 1989


Mr. Jean-Pierre Blackburn (Jonquiere):: Mr. Speaker, over the weekend the Leader of the New Democratic Party took part in a march to save VIA Rail from the cuts imposed by the Minister of Finance (Mr. Wilson).
I wonder at times, Mr. Speaker, whether the Leader of the New Democratic Party is aware of Canadian realities or whether he is trying to follow into the footsteps of Christopher Columbus and discover America anew! He doesn't know where he is going, he does not know where he is coming from, and all that at the expense of the taxpayers.
Does the Leader of the New Democratic Party realize, Mr. Speaker, that each time a Canadian boards a train, there is a $100 cost to the Government? Does the Leader of the New Democratic Party realize those $100 must be paid by average citizens each time someone boards a train?
Mr. Speaker, we cannot go on spending left and right! If we are to preserve our social programs, we absolutely must reduce the deficit and better control our expenditures.



ENVIRONMENTAL AFFAIRS


Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, the International Chamber of Commerce Award to the Prime Minister prompted Fitzhugh Green, the former Deputy Head of the U.S. Environmental Protection Agency, to say:
It's like the devil giving an award for purity.
While the Prime Minister receives accolades abroad, at home through the Budget, he closes 12 conservation and renewable energy offices, phases out the National Conservation and Alternative Energy Initiative Program, cuts transfer payments to the provinces by $340 million, possibly affecting reforestation programs and other environmental joint ventures and cuts another $396 million from overseas development assistance, which may affect environmental programs. At the same time, there is not one word in the Budget about the $5 billion in subsidies
committed to fossil fuel megaprojects which will aggravate global warming, an issue the Prime Minister claims to be concerned about.
When will the Prime Minister practice as he preaches? When will he take action to back up his words? When will he open the centre on sustainable development he promised last year at the United Nations General Assembly?



FORESTRY


Mr. Brian L. Gardiner (Prince George -Bulkley Valley):: Mr. Speaker, this week we are celebrating the 60th Annual National Forest Week. All across our country Canadians are reflecting on the importance of the forests to our livelihood, our environment, and indeed our planet. The release last Friday of the Wood-bridge Reed Report, showing the tremendous economic potential of the forest industry, shows as well the increased demand for a shrinking wood supply. This is part of the mounting evidence that demonstrates that all levels of government, industry and labour, and many of the scientists that parliamentarians met this afternoon and later today, must work together to make sure our forests provide the same opportunities for Canadians in the future as they are providing for us in the present. The federal Government should immediately begin negotiating forestry agreements with the provinces, and they should mark this Forest Week with the introduction of legislation to establish formally the Department of Forests.



AWARDS AND DECORATIONS


Mr. Bill Attewell (Markham):: Mr. Speaker, the firefighters of Canada are brave and dedicated individuals who risk their lives daily to save the lives and property of Canadians. There is a medal to recognize this devotion to duty. It is called the Fire Services Exemplary Service Medal, and is awarded to veterans on retirement who have given 20 years service of good standard. The Chancellory of Canadian Orders and Declarations decided however that only those veterans who retired after August 28, 1985, would be eligible. Firefighters who struggled with old and inadequate equipment during World War II were no less brave and dedicated. A few of
May 8, 1989

these veterans are still around. Why should their contribution be ignored?
Sydney Oxenham, a constituent of mine, retired recently as Deputy Fire Marshall after 40 years of service. He received his medal, but he cannot wear it proudly standing beside older veterans who have been denied this recognition. He has, therefore, chosen to return it.
It is not the practice to give awards retroactively, but for once let us bend the rules and give the few remaining senior firefighters the honour they deserve.



THE BUDGET


Mr. George Proud (Hillsborough):: Mr. Speaker, Canadians, and indeed Prince Edward Islanders, deserve more respect from the Minister of National Defence. In his response to a question asked by my colleague, the Member for Malpeque (Ms. Callbeck), last Friday, he referred to the fact that men and women who serve in the military should not be located in regions of Canada solely for the sake of economic development. Prince Edward Island is still one of the ten provinces of Canada, having joined Confederation in 1873.
The White Paper on defence, tabled by the Minister's Department, highlights the great contribution that defence expenditures make to all sectors of Canadian society. The White Paper also notes how defence programs make a significant contribution to overcoming regional economic disparities, and that defence dollars have strengthened local and regional economies.
Economic disparities abound in P.E.I. Defence dollars should remain in P.E.I. so that they may strengthen our already weak economy.



CANADIAN CENTRE OF ARCHITECTURE


Mr. Jean-Marc Robitaille (Terrebonne):: Mr. Speaker, yesterday in Montreal a number of individuals, including the Prime Minister and the Premier of Quebec paid tribute to Mrs. Phyllis Lambert, an architect, at the opening of the Canadian Centre of Architecture, a museum dedicated to architecture and architectural history.
The $45 million centre, to which the Canadian and Quebec governments contributed $4 million each, is unique, Mr. Speaker. It is to be noted that Mrs. Lambert, well known for her battles to preserve Montreal's architectural heritage, personally donated $27 million for that important achievement.
As mentioned by the Prime Minister, everyone in this House must recognize Mrs. Lambert's relentlessness, generosity and patriotism.
Mr. Speaker, this centre is not only a historic place, it is first and foremost a tool for our future.
I say bravo to Mrs. Lambert, a great Canadian we are all very proud of!



EXTERNAL AID


Ms. Lynn Hunter (Saanich-Gulf Islands):: Mr. Speaker, in response to criticism of massive budget cuts to Canada's foreign aid, the Minister of External Relations said we will have to place a greater emphasis on the quality of projects while accepting the reduction in the quantity of dollars going to crucial international development work.
The Canada-Tanzania Wheat Program adds to the sullied credibility of all this Government's statements regarding foreign aid. This program has been roundly criticized over the past three years. Yet the Government continues to send millions of dollars to support it. The Program violates at least three fundamental CIDA criteria. It is environmentally disastrous, supporting monocropping which leads to land degradation. It encourages the forced eviction of the pastoralist Barabaig people, the poorest of the poor, with brutal human rights consequences. Rather than encouraging self-reliance, it has created dependency.
This Government cannot be believed regarding its statements about the quantity of international assistance, nor its bland assurances of their quality.

May 8, 1989



DANGEROUS PRODUCTS


Mr. Girve Fretz (Erie):: Mr. Speaker, Canadians were aghast to read the article that appeared in The Globe and Mail today concerning the dangerous practice by unscrupulous individuals and companies of mixing hazardous chemical wastes including PCBs into gasoline, diesel and industrial heating fuels. These fuels were then sold at reduced prices to customers in southern Ontario, Quebec and western New York. Many Canadians may not be aware that if PCBs are not burned off completely at high temperatures, furans and dioxins are produced which are even more dangerous.
I urge the Ministries of Environment, National Revenue and the Solicitor General to begin an investigation into the activities of these gasoline bootleggers and press criminal charges where needed.



LABOUR FORCE


Mr. Jim Jordan (Leeds -Grenville):: Mr. Speaker, in the fall of 1988, 14 per cent of Canadian manufacturers surveyed by Statistics Canada said that their production was impeded by lack of skilled labour in this country. In 1985, a similar survey by Statistics Canada indicated that only 2 per cent of Canadian manufacturers stated that their production was impeded by a lack of skilled labour.
While the number of unfilled jobs is rising in Canada, unemployment persists at relatively high levels. Skill and post-secondary education requirements are steadily increasing in most occupations.
In view of this situation, why does the Government not announce, with the co-operation of the provinces, a state-of-the-art national apprenticeship program? Would the Government not agree that the people who are unemployed simply do not have the skills required to fill many of the estimated 600,000 jobs that are available in Canada, and for which Canadians could and would become qualified with the introduction of a massive new apprenticeship program?



FORESTRY


Mr. Dave Worthy (Cariboo-Chilcotin):: Mr. Speaker, I would also like to bring to the attention of the House the fact that this week is National Forestry Week. It will be celebrated all across Canada.
Our forests are Canada's greatest natural resource, as well as the largest single contributor to our country's trade balance. More than 300,000 Canadians from coast to coast are directly employed by the forest industry, and a further 600,000 are indirectly employed by the industry. Indeed, our forests represent this country's great natural heritage.
Yesterday in Prince George, British Columbia, an exciting event took place. The Minister of Forestry (Mr. Oberle) launched "Forests of the World". This was a good example of the type of community action which typifies the theme of National Forestry Week: "Your Forests and Your Future".



SCIENCE AND RESEARCH


Mr. Howard McCurdy (Windsor-Lake St. Clair):: Mr. Speaker, this morning Louis Siminovitch, one of Canada's leading medical research scientists, again decried the loss of Canadian scientists to the United States because of lack of research money.
Promises to increase science expenditures have not materialized as the Government has pleaded for the need for budget restraints to fight the deficit.
Meanwhile, the decision has been taken to place the space agency in St. Hubert, which will cost millions of dollars extra in establishment, moving, and operational costs, over those costs even if the space agency had been moved to Montreal. At the same time, a number of leading scientists are saying that they will move, but they will not move to St. Hubert. They will move to the United States.
When the Lortie Committee recommendations to increase basic research funding have been ignored, when $4 million is being cut from acid rain abatement, when $24 million was cut from alternative energy source research, when cuts to post-secondary education will mean fewer trained scientists, many will ask if the
May 8, 1989

Government has a science and research development policy at all. There are priorities other than the space station. Sexy as it is, it is about time the Government practised safe sex.



THE ECONOMY


Mr.   Brian@: Mr. Speaker, one of the greatest challenges facing Canadians today is the federal deficit. If we are to continue to provide support for our senior citizens and our farmers in the riding of Elk Island, and in other parts of Canada, then we must stand together in our fight against the deficit.
The annual deficit has fallen from a record $38.3 billion in the fiscal year 1984-85 to $28.9 billion last year. By 1993 the deficit will be cut to $15 billion.
To succeed in this challenge we must unite as a nation. Let us work together, all Canadians from sea to sea, to build for the future in order that our children can live in a stronger Canada.



HOUSING


Mr. Joe Fontana (London East):: Mr. Speaker, the Government's Budget has been a disaster for the housing sector. The announcement that the federal goods and services tax will be extended to the purchase of new houses will put the capacity of buying a new house even further out of reach for average Canadian families. The goods and services tax could add thousands of dollars to the price of an average new house. What about that dream of owning a home, Mr. Minister?
Two weeks ago the housing Minister stated that he would help. Where is the help for ordinary Canadians in the Budget? Where in the Budget are the homeless to look for help? Where is the help for those who dream about owning a house, but see that dream taxed to death? Where in the Budget are those looking for affordable accommodation to look for help?
The Government promises affordable housing. Affordable housing for whom, Mr. Speaker? For ordinary families? Or does the Minister really mean that there will be housing for those who can afford to pay the price? Where is the housing Minister's help? Canadians have the right to know the truth.
Oral Questions



AGRICULTURE


Mr. Ken Monteith (Elgin):: Mr. Speaker, the announcement by the Minister of International Trade that broiler hatching chicks and eggs will be placed on the import control list effective today is welcomed by producers in this industry.
Farmers have expressed concern to the Government about increasing imports, and the timely response of the Government will ensure that the Canadian broiler hatching egg and chick industry remains viable.
This action shows that the Government is prepared to use the provisions under Article 11 of the GATT to restrict agricultural imports in support of domestic supply management programs.



ORAL QUESTION PERIOD


Hon. Herb Gray (Windsor West):: Mr. Speaker, my question is directed to the Prime Minister. On Friday, the Conference Board of Canada, a leading and respected private sector economic forecaster, issued its latest study of the economy in which it looked at the Budget of the Government. After looking at the Budget it stated: "The risk of recession is enhanced by the Budget". It also stated: "Businesses should prepare contingency plans for a recession".
In light of this forecast, how can the Prime Minister and the Government persist in presenting to the House and to the country a Budget which, in the eyes of a respected group such as the Conference Board, is leading us inevitably into a recession and all the harm that this will bring to consumers, workers, farmers, and Canadians generally? Why is the Government persisting in this damaging course for our country?


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, we have a high regard for the Conference Board and other economic think-tanks around town and around the country.
However, it is the responsibility of the Government of Canada to chart courses that we think will be of benefit to the nation. Clearly, a failure to address the debt would only have led to higher interest rates, higher inflation,

May 8, 1989
Oral Questions
and a loss in consumer and investor confidence. The consequences of all of that would have been a severe economic downturn.
My hon. friend will agree that, for example, when the Minister of Finance brought in his first economic statement in November, 1984, some of these same think-tanks, including Leaders of the Opposition, were predicting losses of 200,000 and 300,000 jobs. In point of fact, these policies have resulted in the creation of 1.4 million new jobs. We want to maintain that record.


REDUCTION IN INTEREST RATES
Herbert Eser (Herb) Gray: Mr. Speaker, my supplementary question is directed to the Prime Minister. The Prime Minister speaks of debt and inflation. Yet in the Budget statement his Minister of Finance admits that the Budget presented to the House last week will inevitably increase inflation.
How can the Prime Minister say to the House and to Canadians that a Budget that increases sales and excise taxes, which the Minister of Finance admits will be inflationary, can be expected to reduce interest rates? What is there in the Budget that will reduce interest rates? Is it not a fact, as confirmed by the Conference Board, that the Budget of the Government will have the opposite effect?


Martin Brian Mulroney: Mr. Speaker, no one can foresee the future with overriding accuracy. Even economic forecasters differ on what will be the impact of various policies.
The Minister of Finance has considered the best economic advice available to him. He has brought into the Budget forecasts a sense of realism and an understanding of the dynamics of the Canadian economy. Indeed, as the hon. gentleman points out, interest rates are too high.
It is our hope and our expectation that difficult actions such as those taken by the Government in the last Budget will result in the eventual lowering of interest rates. That will have the type of beneficial effect that we are seeking to have in the economy of Canada.


FORECAST OF INCREASE IN FEDERAL BUDGET DEFICIT
Herbert Eser (Herb) Gray: Mr. Speaker, during the election campaign there was a report published by Southam News citing government sources that stated that the Finance Department was confidentially forecasting a much higher federal Budget deficit than the one the Government was talking about at that time. When asked about that report, the Minister of Finance was quoted as saying as he left a Conservative rally at which the Prime Minister spoke: "No, that's not accurate''. The Minister of Finance said: "I made it very clear that our program spending track is right on line".
So I would like to ask the Prime Minister why the Minister of Finance insisted that the Government was on the right track at the time, although he had heard otherwise from his Department. Furthermore, why didn't the Prime Minister take advantage of this opportunity to comment on the situation? Why did he prefer to remain silent instead of passing on this information to the Canadian public? Why didn't the Prime Minister speak out at the time?


Martin Brian Mulroney: Mr. Speaker, I think all Canadians are familiar with the forthrightness of the Minister of Finance. He has admitted quite frankly that the increases in interest rates towards the end of the year have had a negative impact on his Budget projections. That is no big secret. This negative impact was also felt in the United States and all major countries of the world. Interest rates rose towards the end of the year and in early 1989, which had a negative effect on the Budget projections. However, we hope that a sound policy of Budget cutbacks will have a beneficial impact that will be noticed by the House in the months and years to come.


FISHERIES
Hon. Roger E. Simmons (Burin -St. George's):: Mr. Speaker, my question is directed to the Prime Minister. He knows that three weeks ago he and his Government sold out the Newfoundland fishermen and plant workers. It appears now that the Government is also determined to bring chaos to the West Coast fishery. British Columbia salmon runs have been declining over the past few years, mainly due to the drift-net fishery outside the 200 mile limit. Over the weekend, the Government allowed Japan an additional 120 nautical miles for
May 8, 1989

drift-netting. How can he justify this latest sell-out of Canadian resources and jobs?


Right Hon. Joe Clark (Secretary of State for External Affairs):: Mr. Speaker, some day the Hon. Member will learn that he devalues the currency if he describes every element as a sell-out.
He will also know that the question of drift-net fishing is a very serious problem with which consecutive Canadian Governments have been seeking to deal for some time. Part of the difficulty is that the fishing occurs beyond the normal jurisdiction of Canada.
We have been looking for ways in which we can put in place step by step practical measures that will allow us to protect the Canadian fisheries more effectively. There has been a very important step adopted by the Government of Canada in co-operation with the Government of Japan, whereby the Japanese have agreed now to let Canadian observers be present on Japanese vessels. That will help us both reduce the level of fishing and also gain more precise information.
We recognize that there are problems that continue with regard to fishermen coming from Taiwan, from Korea and from other countries. We are hoping to expand the initiative we have just taken to include fishermen and vessels of those countries.


Roger Simmons: Giving Newfoundland fish to France or West Coast fish to Japan is a sell-out. He may not like the word. I could use the term Newfoundland fishermen are using, but it is not parliamentary.


MORATORIUM ON DRIFT-NET FISHING
Roger Simmons: Mr. Speaker, my supplementary question is directed to the Minister. Why did Canada not demand a drift-net moratorium instead of giving extra allocation, extra space to the Japanese? Why doesn't the Government, for a change, stick up for Canadian fishermen instead of selling out to foreigners all the time?


Charles Joseph Clark: Mr. Speaker, I do not want to draw the attention of the House or the Hon. Member back to some of the difficulties that arose because of fisheries' actions that were taken by Liberal Governments, in one of which he was briefly a Minister of the Cabinet.
I am quite prepared to deal with the steps we have taken. We have negotiated very successfully with France
Oral Questions
a resolution to a problem that was difficult in Canada and difficult in France. We are now in a position where we may be able to get agreement on fishing zones and their boundaries. That is veiy important. The Hon. Member understands that.
With regard to the drift-net problem, another step we are taking that we hope will have some effect is that we have been in touch with the Governments of Thailand and Singapore, and we will be touch with other countries, to urge those Governments to discourage their fish processing industries from dealing with the products of drift-net fishing by Japan, by Korea, by Taiwan.
This is a matter that will not be shouted down. There must be step by step progress. We made some progress in the decisions that were taken with Japan in the last few days. We intend to continue to approach this problem seriously, with an eye to protecting the interests of the Canadian fishing industry.


DANGEROUS PRODUCTS
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is directed to the Solicitor General. There is a report in the press this morning that hazardous chemical wastes are being mixed with fuel oils and shipped by tanker across the Canada-U.S. border, and that this process has been going on for some four years. As all Canadians know, the health risks attendant to this kind of activity are immense for Canadians. Will the Solicitor General tell the House how much information the Government has? Has there been a special inquiry involving federal authorities into this kind of activity? When can we expect that activity to stop?


Hon. Lucien Bouchard (Minister of the Environment):: Mr. Speaker, the allegations published today in The Globe and Mail concern practices which, if they are established, constitute gross contempt of the law and total disregard for public health.
We are communicating right now with all Departments involved, because there are many federal laws concerned with those alleged practices. A few moments ago I spoke to my colleague, Minister Bradley of Ontario, who will be in a position to gather more facts and lay charges if the investigation results in that decision.

May 8, 1989
Oral Questions


NUMBER OF FEDERAL INSPECTORS
John Edward Broadbent: Mr. Speaker, perhaps the Minister could provide us with some additional information concerning the frequency with which the federal Government exercises its responsibility for inspection. For example, the author of the article suggested that hazardous substances, including PCBs, are shipped in these tanker trucks because: "They are almost never tested by consumer or environmental officials".
It was confirmed to me this morning by officials in the Minister's Department who say that they do not have enough inspectors to live up to their mandate. Will the Minister confirm that there are not enough federal inspectors to do the job properly? Specifically, will he acknowledge that for all of Ontario and Quebec there are only 32 active inspectors for these two very large provinces, which is many fewer than the provincial Governments themselves have in these fields? If this is true, will the Minister tell the House that he has every intention of increasing the number of inspectors soon so that an adequate job can be done?


Lucien Bouchard: Mr. Speaker, first of all I would like to give the Leader of the New Democratic Party the assurance that for several weeks now, we have been conducting routine border inspections, together with the province of Ontario and the U.S. authorities, to ensure compliance with the Transportation of Dangerous Goods Act.
Second, the Budget brought down last week gave my Department 56 person-years more to help implement the new Canadian legislation on the protection of environment, and intend to be increasingly vigilant.
Mr. Speaker, we also intend to get in touch with the oil industry to ensure that Canadians are offered high quality gasoline.


RESPONSIBILITY FOR HEALTH PROTECTION
John Edward Broadbent: Mr. Speaker, it was only within the last couple of hours that people in his own Department said that they do not have enough people to live up to the mandate. The Government takes credit for environmental action on both sides of the
border. When will it get its act together to protect the health of Canadians?


REQUEST FOR RCMP INQUIRY
John Edward Broadbent: My last question is directed to the Solicitor General. The United States, has one section of the FBI which specializes in investigating such activities. Does the RCMP have a similar operation here in Canada?


Hon. Pierre Blais (Solicitor General of Canada and Minister of State (Agriculture)):: Mr. Speaker, I believe my colleague made it very clear that these are very serious allegations. I think we all agree on that. However, both my colleague and myself, and my other colleague who is responsible for Customs and Excise, intend to review all the allegations that were made this morning. We will check with other police forces that also have jurisdiction in this matter, and I personally asked the RCMP a few minutes ago, considering the seriousness of these allegations, to see what could be done tomorrow or even today, with this very serious information. However, I believe that before we launch a general investigation, we must be very careful about the matter of jurisdiction.


THE ENVIRONMENT
[Stage Direction]
Ms Sheila Copps (Hamilton East): Speaking of being careful, Mr. Speaker, I suggest Canadian men and women would have expected the Government to show greater care because they are the ones who are likely to be affected by the PCBs.
Could I ask the Minister whether he is aware that such an increase of 56 person-years would translate into one person to cover every 100 kilometres of the Canada-United States border and whether he feels it is enough to keep a close watch on this matter?
Lucien Bouchard: Mr. Speaker, the proper authorities have identified the points where these materials are shipped across the border and we carry out regular inspections to make sure that the law is respected. We have 56 additional persons. We will check to see whether we have enough. I would
May 8, 1989

suggest we did not talk to the same officials. Those I have contacted within my department feel that with 56 extra persons we can go a long way. We are going to implement these new measures, verify the results and, if it is not enough, this responsible Government will do what it has to do.


Ms. Copps:: Mr. Speaker, I would like to remind the Minister of the Environment that he is the Minister. He has to judge whether he feels that 56 people, which is one person per 100 kilometres, is sufficient.


CHEMICAL WASTE IN FUELS
Sheila Maureen Copps: Mr. Speaker, I would like to address my supplementary question to the Minister of National Health and Welfare. Hundreds of thousands of Canadians have pumped potentially PCBladen gasoline into their cars. They have possibly touched it. They have smelled it. They have breathed it. What they would like to know from the Minister of Health, who was prepared to act very quickly in the case of the three poisoned Chilean grapes, is what specific action he intends to take to protect the health of hundreds of thousands of Canadians who have been pumping gas over the last four years.


Hon. Perrin Beatty (Minister of National Health and Welfare):: Mr. Speaker, my Department will be co-operating fully with the Minister of the Environment. Any resources we have that are available will certainly be put at his disposal.


NATIONAL DEFENCE
Mr. Joe McGuire (Egmont):: Mr. Speaker, my question is for the Acting Minister of National Defence.
On May 5, 1989, as reported at page 1,368 of Hansard the Minister of National Defence stated:
-the men and women who serve in the military today deserve more from the people of Canada than to be located in regions for economic development.
Is the Minister saying that the military do not deserve or want to be stationed in Atlantic Canada, in places such as Summerside, Gander and Sydney? I demand an apology from the Minister on behalf of the Government for making these derogatory remarks.
Oral Questions


Some Hon. Members:: Hear, hear!


Hon. Mary Collins (Associate Minister of National Defence):: Mr. Speaker, I think the Hon. Member would agree that we must make decisions in the Department of National Defence based upon operational effectiveness. We allocate our resources across the country to ensure that we have appropriate defence capabilities in various regions of the country.


CLOSURE OF CFB SUMMERSIDE
Joseph Blair (Joe) McGuire: Mr. Speaker, the Minister has stated on several occasions that the closure of CFB Summerside was caused, just as the Acting Minister has stated, to reduce the amount of the debt. However, a suggestion was made in the House last Friday by my colleague, the Hon. Member for York Centre, in regard to CFB Toronto which blows a big hole in that rationalization. The Minister has before him an offer whereby the Government could gain three-quarters of a billion dollars, help solve the housing problem in Toronto and solve problems of base closures at the same time. Has the Minister rejected this offer out of hand? If so, why?


Some Hon. Members:: Hear, hear!


Mary Collins: Mr. Speaker, it is important to understand that the functions that are carried out at the base at Downs-view are very different from the functions that are being carried out at the base at Summerside. Summerside has supported a trucker operation which will no longer be required by our Department.
CFB Downsview is a major base which supports militia operations and our National Defence School. It is a major factor in providing for our military activities in the Metropolitan Toronto area.
I am sure my hon. colleague knows that we have already offered to transfer 100 acres from Downsview to the provincial Government for housing requirements.


THE ENVIRONMENT
James Ross Fulton: Mr. Speaker, my question is also directed to the Minister of the Environment. PCBs, furans and dioxins have been released in large quantities as a result of the illegal mixture of hazardous chemical wastes into gasoline, diesel and industrial heating fuels. Since the chemical wastes are linked to severe human disorders of the brain, liver, skin and nervous system,

May 8, 1989
Oral Questions
what steps does the Government plan to take to locate and to test sites where those levels may be dangerous?


Lucien Bouchard: Mr. Speaker, we are conducting two parallel investigations right now. The first will be directed at the industrial community. We will communicate with industry people to make sure that the products sold to Canadians are safe.
Second, on the multidepartmental level and jointly with the Government of Ontario, we are investigating to substantiate the evidence in support of the allegations published today.


LOCATION OF TOXIC SUBSTANCES
James Ross Fulton: Mr. Speaker, my supplementary question is directed to the Minister of National Health and Welfare, who should be veiy concerned about this. There may in fact be gas stations near elementary schools. There may in fact be industrial sites where hundreds of thousands of gallons of polluted heating fuels that have PCBs, furans and dioxins in them. There may be sites with extremely high toxic levels. Will the Minister endeavour to locate those sites and to test those people who have been proximate to those dangerous levels for the protection of their health and for the protection of all Canadians?


Henry Perrin Beatty: Mr. Speaker, as I indicated earlier in response to the question from the Hon. Member for Hamilton East, all the resources of my Department will be put at the disposal of the Minister of the Environment who is taking the lead on this. We will be co-operating fully. Anything the federal Government can do to be helpful we will do.


PRESENCE IN GALLERY OF FOREIGN MINISTER OF POLISH PEOPLE'S REPUBLIC
Mr. Deputy Speaker:: I wish to draw to the attention of Hon. Members the presence in the gallery of His Excellency Tadeusz Olechowski, Foreign Minister of the Polish People's Republic.
[ Translation]


HOUSING
Mr. Paul Martin (LaSalle -Emard):: Mr. Speaker, my question is directed to the Minister of State (Housing).
The Minister has reduced co-ops funding from $7,8 million last year to $5,5 million this year. It is estimated that this reduction will hardly allow the funding of 1,800 housing units this year, which represents the lowest level over the past eleven years.
My question is this: What steps will the Minister take to reverse this decision? Is the Minister prepared to accept a worse record than that of his predecessor whom he blamed so very much?


Hon. Alan Redway (Minister of State (Housing)):: Mr. Speaker, as the Hon. Member is aware, and as he has indicated, the budget for co-op housing has been reduced in this current year from what it was last year. I regret that. The Government regrets that.


Some Hon. Members:: Oh, oh!


Alan Redway: As I indicated previously the problem is the deficit situation that we are facing.


Some Hon. Members:: Oh, oh!


Alan Redway: Other Canadians know that, even if members of the NDP do not.
I received recently a letter from the Executive Director of the Family Services Association of Metropolitan Toronto. I would like to quote from that letter which states: "It should be evident to most Canadians that 31 cents interest on each tax dollar is an unacceptably high price to pay for current government operations and programs. Furthermore, allowing the deficit to grow poses a real threat to the health, educational and social programs of our country". That comes from a director of a social service agency.
I am endeavouring, along with the co-operative housing movement, to meet with them and to develop with them ways to produce more out of the Budget than is available to us.


Some Hon. Members:: Hear, hear!
May 8, 1989


SOCIAL HOUSING-WAITING LISTS
Paul Edgar Philippe Martin: Mr. Speaker, that deficit is the result of a high interest rate policy of this Government which-


Some Hon. Members:: Oh, oh!


Paul Edgar Philippe Martin: -comes directly from its lack of credibility in the business community. It is inconceivable to me that this Minister who was so articulate as a back-bencher would now pursue this policy with 500 people in Halifax who are on the waiting list, and 15,000 people in Toronto are on the waiting list for this kind of housing. The Minister says that it is the deficit. Let us accept that. Let us accept the Minister within that context. Last week, this Government announced that it was going to spend-


Mr. Deputy Speaker:: Order, please.


Paul Edgar Philippe Martin: - $2.7 million on advertising for the obscene Budget. My question is-


Some Hon. Members:: Oh, oh!


Paul Edgar Philippe Martin: -what does this tell us about this Government's priorities?


Some Hon. Members:: Hear, hear!


Mr. Deputy Speaker:: Order, please.


Alan Redway: Mr. Speaker, the Hon. Member has obviously decided that today is the day to launch the leadership campaign.


An Hon. Member:: That is right.


Alan Redway: The Hon. Member is aware that this Government and this Minister have placed affordable housing as a high priority. I am examining every possible resource that we have available to us to maximize those resources to create more housing that is affordable for Canadians.


Some Hon. Members:: Hear, hear!


RESEARCH AND DEVELOPMENT
Mr. John Manley (Ottawa South):: Mr. Speaker, my question is directed to the Prime Minister. The Minister claimed that research and development expenditures
Oral Questions
should represent 2.5 per cent of the Gross Domestic Product. In view of the fact that the level of these investments remains as it was in 1983 and that the Budget does not propose any means to increase these investments, does the Prime Minister still believe that his objective of 2.5 per cent can be achieved? If not, what objective does he feel could be achieved?


Hon. William C. Winegard (Minister of State (Science and Technology)):: Mr. Speaker, I do not think my hon. colleague has bothered to read the Budget. If he had, he would know that all of those items in the Budget for research and development are still there.


Some Hon. Members:: Oh, oh!


William C. Winegard: The $240 million Centres of Excellence Program is still there. The $200 million that is going to the councils is still there. The $80 million to the Canada Scholarship Program is still there. Bill C-22 and the money that will bring in in terms of R and D is still there.


Some Hon. Members:: Oh, oh!


William C. Winegard: The advanced industrial materials program is still there.


Some Hon. Members:: Hear, hear!


William C. Winegard: The biotechnology program is still there.


Some Hon. Members:: Hear, hear!


William C. Winegard: The information technology program-


An Hon. Member:: That is still there.


William C. Winegard: Thank you.


RECOMMENDATIONS OF NATIONAL ADVISORY BOARD ON SCIENCE AND TECHNOLOGY
John Paul Manley: Mr. Speaker, the level of spending on research and development is still 1.3 per cent. The Prime Minister takes a great deal of pride in chairing the National Advisory Board on Science and Technology. This group of eminent scientists has made many recommendations to the Prime Minister, including a doubling of the base budgets of the Research Granting Council and a subsequent indexing of those budgets at one and half times the growth of GDP.
Is the Government going to act on these recommendations from the National Advisory Board? If not, will the Prime Minister stop wasting the time of scientists who

May 8, 1989
Oral Questions
have better things to do than to have their recommendations ignored?


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: Mr. Speaker, one of the recommendations that was made by leading scientists and those who are concerned with research and development in Canada was that the Government of Canada finally pass Bill C-22 which would mean hundreds of millions of dollars in new investments. We proceeded with it and the Liberals opposed it.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: Not only did the Liberal Party oppose it in the House of Commons, it opposed it in the Senate. It was the finest instrument for investment in research and development in Canada in the last decade and it was opposed ferociously by the Liberals. It took a commitment by this Government to override that opposition and Bill C-22 is now celebrated by all those who believe in science and technology and R and D in Canada today.


TRANSPORT
Ms. Audrey McLaughlin (Yukon):: Mr. Speaker, my question is for the Minister of Transport. Plans to build the Polar 8 ice-breaker have again been put on hold. This Government made a promise to Canadians that it would protect our sovereignty. This Government made a promise to northerners to serve their needs.
Last year, with great fanfare in British Columbia, this Government made a $500 million promise to start the building of the Polar 8 this spring in West Coast shipyards. Canadians are waiting for the Government to deliver on these promises. Hundreds of jobs are at stake. Will the Minister tell us exactly when the building of the Polar 8 will begin?


Benoît Bouchard: Mr. Speaker, I hope if I tell the truth as the Member has asked me to do, she will deny what was said at the beginning. I would like to be very clear. We are proceeding with the Polar 8 operation-


Some Hon. Members:: Hear, hear!


Benoît Bouchard: However, there are two issues about which she knows very well. The first is the
sale of the shipyard which is being processed at the present time. The other one is the problem of the design. A proposal has to be made to the Government, which will be made. It is within what we call the first phase of the operation, which is the phase where we look at the design and we look at the shipyard. After that, we will go into the construction phase. On this side of the House we are operating logically with the first phase and the second phase after.


Some Hon. Members:: Hear, hear!


ARCTIC SOVEREIGNTY
Audrey Marlene McLaughlin: My supplementary is for the Secretary of State for External Affairs. We have heard about the promising phase. I would now like to say that last year the Minister entered into an agreement with the United States respecting Arctic sovereignty.
Last week, the Defence Minister said that we might have to depend on our allies to help defend the Arctic. The United States does not even accept our claims to sovereignty in this area.
Will the Minister confirm that what is really happening with the Polar 8 decision is that this Government is prepared to put our sovereignty in the hands of foreign interests.


Some Hon. Members:: Hear, hear!
Right Hon. Joe Clark (Secretary of State for External
Affairs): Mr. Speaker, that is absolutely false. I know that in order to be a candidate for the leadership of the New Democratic Party, one has to go to the furthest edges of extremism. The Hon. Member should resist that temptation.


Some Hon. Members:: Hear, hear!


COMMITMENT OF FORMER MINISTER
Mr. Brian Tobin (Humber-St. Barbe-Baie Verte):: Mr. Speaker, that would almost invite the comment, that in order to be a candidate for the Conservative Party, one has to learn to make promises and never keep them.


Some Hon. Members:: Hear, hear!


Brian Vincent Tobin: Mr. Speaker, my question is for the Prime Minister. I would like to know what phase the former Minister of Transport, the current Member for St. John's West, was in on March 3, 1987, page 3763 of Hansard when he said in the House:
We will all be proud in 1993 when we sail through any part of the
Arctic archipelago on this new Polar 8 Conservative ice-breaker.
May 8, 1989

Was the Government contemplating sailing through the Arctic or sailing through an election in B.C. with the promise of 1,000 jobs it had no intention of creating with this announcement?


Some Hon. Members:: Hear, hear!


Benoît Bouchard: Mr. Speaker, the Conservative language is the same for the Liberals as it is for the NDP. We have first to go with the definition of the deal. It is very technical but I am sure that the Member can understand.


Some Hon. Members:: Go slow.


Some Hon. Members:: Oh, oh!


Benoît Bouchard: I am not sure, but I think the Member can understand that. We know that the shipyard in Vancouver at the present time could be sold in a few days but it has to be fixed first. Second, we have to decide on what kind of propulsion system we will use. We have two possibilities. As soon as this is settled, we will be starting. Good news is not for the Liberal Party, and I maintain what I believed before.
Once again, we cannot construct the Polar 8 if we do not have the design. That is the way we work on this side of the House.


Brian Vincent Tobin: Mr. Speaker, we would like to believe that this matter is a laughing matter but it really speaks to whether or not this Government can be taken at its word when it makes profound statements to Parliament and the people of Canada.


COMMITMENTS RESPECTING ARCTIC SOVEREIGNTY
Brian Vincent Tobin: The Prime Minister of Canada, the Minister of Transport and the Minister of External Affairs spent a good part of a year or two before the election talking about the record of a previous Government that left the Arctic unprotected.
The country was in a crisis; the Russians, the Americans and every other nation were about to take over. Now they have become sensible and cancelled the foolish submarines and are trying to crawl out from under a commitment of 1,000 jobs at Versatile Shipyards in British Columbia.
My question for the Prime Minister is a straightfoward one. Prime Minister, what has changed in the Arctic that
Oral Questions
suddenly you can walk away from your pre-election promises?


Martin Brian Mulroney: Mr. Speaker, I did not hear all of that.


Some Hon. Members:: Oh, oh!


Martin Brian Mulroney: But the part that I did hear dealt with the explanation that had already been provided by my hon. friend, the Minister of Transport, in regard to the construction of the Polar 8.
The Government indicated that this was a very important instrument for the assertion of sovereignty in northern Canada which had been lacking for many years.
I thought that the statement by the Minister of Transport was remarkable in its clarity-


Some Hon. Members:: Oh, oh!


Martin Brian Mulroney: -and he is indicating very clearly not only the importance that we place on the Arctic, but the importance that the Government places on having this very important instrument built and constructed at Vancouver.


IMMIGRATION
Mr. Sergio Marchi (York West):: Mr. Speaker, my question is for the Minister of Immigration. It concerns today's media reports about a nanny who faces deportation under this Government and who was formerly employed by the sister to the Minister.
I do not wish to cast any aspersions, Mr. Speaker.


Some Hon. Members:: Oh, oh!


Sergio Marchi: However-


Some Hon. Members:: Oh, oh!


Sergio Marchi: Given that it is illegal to employ those without landed immigrant status, as is the case, given that the employer is alleged to have known of the nanny's illegal status and given that the Department only issued a deportation order after the termination of the nanny's employment, can the Minister please explain to the House her role and her Department's role in this particular case?


Hon. Barbara McDougall (Minister of Employment and Immigration):: Mr. Speaker, I am not going to comment on the details of the claim since it is now before the Immigration Department.
In terms of my own involvement, there has been none and there will be none.

May 8, 1989
Oral Questions


INQUIRY AS TO POSSIBLE ACTION OF MINISTER
Sergio Marchi: My supplementary is for the same Minister, Mr. Speaker. Again I ask the Minister, given that under Section 96.1 it is clearly illegal for employers to hire illegal immigrants and subject to a possible $5,000 fine or two years in prison, is the Minister prepared to exercise some understanding and compassion for the nanny and permit her to stay? If the Department is not prepared, why is the law not being applied equally and forcefully against the employer who contravened the same Immigration Act? Why the double standard?


Barbara Jean McDougall: Mr. Speaker, as the Hon. Member knows, there is a hearing going on. My sister and brother-in-law are perfectly capable of explaining for themselves what the situation was and continues to be, and I will continue to leave it up to them.


SCIENCE AND TECHNOLOGY
Howard Douglas McCurdy: Mr. Speaker, my question is addressed to the Minister of State for Science and Technology. Several years ago the Prime Minister promised that the rate of expenditure for research and development in Canada would be doubled from 1.3 per cent to 2.5 per cent of GNP. Last year he promised $1.3 billion for science which seems to have disappeared some place. The fact is that real expenditures by the Government on R and D in this country have not increased but, in fact, have decreased.
With respect to the choice made between Ottawa, Montreal and St. Hubert for the location of the space agency, will the Minister table the cost estimates for the different locations and an estimate of the number of scientists that will be lost to this country on account of this move?


William C. Winegard: Mr. Speaker, let me first inform my honourable colleague that the $1.3 billion is intact and is still there.


Some Hon. Members:: Hear, hear!


William C. Winegard: With respect to the space agency, whether that agency is in Montreal City or in St. Hubert, whenever you move something you are bound to lose a few good people and one regrets that. But the people of St. Hubert are putting on a massive campaign to welcome all those people in the space agency who are going to move to St. Hubert. The two English-speaking universities in Montreal, Concordia and McGill, have said they are prepared to do anything they can to help the scientists who move with the space agency to the Montreal region. What we have to stop is the squabbling and get on with this exciting development about a Canadian space agency.


Some Hon. Members:: Hear, hear!


Howard Douglas McCurdy: Mr. Speaker, I am sure with all that sound and fury signifying nothing, you did not miss that the question was not answered. It is clear that with the attempt by the Government to restrict expenditures on R and D in order to attack the deficit, that there is no rationality in squandering money for already shortchanged R and D.


Mr. Valcourt:: Forget your speech and ask your question.


COST OF LOCATING AGENCY
Howard Douglas McCurdy: Mr. Speaker, my question to the Minister is simply this.


Some Hon. Members:: Hear, hear!


Howard Douglas McCurdy: Will the Minister table in this House an estimate of the relative costs for the establishment, the moving of personnel and the additional operational costs which certainly do exist as differences among the three alternatives of St. Hubert, Montreal and Ottawa? Will the Minister do that?


Pierre Blais: Are you opposed?


William C. Winegard: Mr. Speaker, I find this really quite unusual. We had just a few months ago the Leader of the New Democratic Party saying his Party wanted the space agency in the greater region of Montreal. Now, for some reason, the New Democrats seem to have changed their minds. Perhaps the NDP Member would like to explain to the people of Montreal why they don't want it there. As I have said before, in terms of funding, all of that money is there and all of that money stayed there through the Budget.


CONSUMER AFFAIRS
Bill Attewell: Mr. Speaker, my question is for the Chairman of the Standing Committee on Consumer and Corporate Affairs and Government Operations concerning interest rates on credit cards. He will know that a couple of years ago the Finance Committee conducted a very exhaustive investigation into this matter and rates were voluntarily lowered at
May 8, 1989

that time. Now I see that rates are back at 20 per cent. Will his committee take that subject seriously as did the Standing Committee on Finance and Economic Affairs? Will he be conducting an investigation?


Mr. Garth Turner (Halton-Peel):: Mr. Speaker, the Hon. Member's question is well put. As Hon. Members will know, members of my committee from all Parties have indicated that they feel the very important issue of credit card interest rates should be addressed. Members of all Parties have agreed to discuss this and will be doing so tomorrow morning. I anticipate we will be looking into this issue with all due haste.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson (Etobicoke Centre) that this House approves in general the budgetary policy of the Government; and of the amendment of Mr. MacLaren (p. 1095).
Mr. Bill Casey (Cumberland-Colchester):: Mr. Speaker, although I have made a few short statements and comments, this is actually my first address to the House of Commons. It is certainly a honour for me to do so.
I would like to take this opportunity to thank the people who elected me to this office, the people of Cumberland-Colchester, a riding in the north of Nova Scotia. These people selected me to represent them in this House as a Member of Parliament.
I have watched many new Members tiy to express their gratitude, their humility, and their appreciation for the opportunity to serve here as Members of Parliament. I have seen how difficult it is and I know now how difficult it is to express that gratitude. I assure you, Mr. Speaker, that I am truly grateful for the opportunity, and I hope I
The Budget-Mr. Casey
can justify the confidence my constituents have shown in me.
Since I have been a Member of Parliament now for about five months, I have experienced all kinds of emotions. I have found it interesting, frustrating, exciting and confusing, but one thing that never changes about being a Member of Parliament is that there is always lots to learn. In any one day when we come to work, we may talk about budgets, regional development, forestry, fisheries, defence, day care, veterans affairs, science and technology, Indian affairs, and on and on. Of all the things about being a Member of Parliament, I appreciate most the opportunity to learn about Canada and about all aspects of Canadian life.
Before I get into my remarks on the Budget, I would like to talk about two lessons I have learned in the last week and a half, lessons I have learned from the Canadian people. I am very glad to have had the opportunity to learn those lessons.
First, the Canadian people want their politicians to be credible. If they are credible, Canadian people will back them to the hilt. Second, as politicians, we underrate the ability of the Canadian public to separate the wheat from the chaff, to decide between what is right, and wrong and to determine what is the real story, no matter how much conflicting information we present to the public.
The first lesson is that Canadians want credible politicians. As we all remember, about a week and a half ago, there was a premature release of budget information to the public domain. It was referred to as a leak. I do not think leak is an accurate description. A leak, according to Webster's dictionary, is a slow release of material by accident. Certainly this was no accident. It was a determined effort by an individual who absconded with some confidential information on the Budget. That person tried to sell it to the media and that did not work, then tried to give it to the media on the phone and that did not work, so finally had to hand deliver it to the media. Finally he got his story in the news and caused a great deal of embarrassment for the Minister of Finance (Mr. Wilson).
I contend that very few Ministers of Finance could survive the onslaught that followed that premature release of information.

May 8, 1989
The Budget-Mr. Casey
I contend that the only reason the Minister of Finance was able to survive that onslaught was that he has built up credibility with the Canadian people year after year. I would even suggest that he has built up his credibility with all Members of Parliament on both sides of the House.
I think as well that the Minister increased his credibility and enhanced his reputation by taking quick action. He was decisive and effective. He set a course of action and stuck to it right from the beginning to the end. I think he deserves a lot of credit for that.
Others involved in the great Canadian leak debate changed direction often while the Minister steered a straight course from beginning to end. Opposition Members seemed to go off in different directions. First they were invited to come to the House to hear the Budget presented, but they said no. Just a short while later, they changed directions and said that they wanted to have the Budget presented to them in the House. Then opposition Members said before the television cameras, and probably one of the biggest audiences the National News ever had, that it was a non-budget given by a non-minister and that they categorically refused to debate it or discuss it. Meanwhile, the Minister kept going in a straight line on his set course.
Shortly thereafter, within hours of saying categorically that they would not discuss or debate the Budget, opposition Members turned around 180 degrees and found themselves both discussing it and debating it in the House. Meanwhile, the Minister of Finance kept on his course.
Finally, the Minister of Finance presented his Budget in the House of Commons and opposition Members all jumped up and walked out except for a few stragglers. Opposition Leaders had to come back to bring them out so that the entire opposition walked out while the Minister of Finance presented his Budget. What opposition Members did not understand was that only they walked out. The people in the gallery stayed. The people did not turn off their television sets. The people stayed and listened to the Minister of Finance. Not only did they listen to him but they stood behind him and supported him.
I think the Minister of Finance set a fine example. His reputation was enhanced and his credibility was increased. The lesson is that if we as politicians are
credible, the public will stand behind us through thick and thin.
Lesson number two is that the public can sort out the wheat from the chaff. I think it is incredible how members of the public can apply common sense to all the information we give them and can arrive at the right decision and the right answer. A good example is this so-called leak. Despite all opposition and media cries that it was a national disaster, that it was the end of the world and that the Minister should resign and take his Budget with him, the Canadian people applied their common sense and said that this was not a national disaster, that no one had been harmed, that there had been no damage and that it was just an unfortunate event. They also realized, by applying their common sense, that damage would be done if the Minister did resign and if he did take his Budget with him.
If the Minister had resigned, it would have created economic chaos for months, our international reputation would have been damaged for years and it would have taken years to overcome it. I give credit to the Canadian people for weeding through all the contradictory information we throw at them.
The same thing applies here. There is so much contradictory information from which the public has to choose to determine the truth about the Budget. Do we really need cut-backs and tax increases? It is very difficult for a regular Canadian like me to know, understand and put into perspective what a national debt of $330 billion means. What does a deficit every year of $30 billion or $40 million mean?
It is difficult to understand but I still believe that the Canadian people have applied their common sense and have come to the conclusion that we do have a problem, that we must address it and that we will address it. I would like to pay tribute again to the members of the public for their ability to do that. I would also like to pay tribute to the Minister of Finance for setting a fine example for new Members and for senior Members as well.
My comments on the Budget will be brief. First of all, I do not believe there is such a thing as government money or government funding, only people's money. The people provide funds to the Government in trust to be distributed to Canadians who need it the most and for
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the benefit of all of Canada. There is no such thing as government money.
An interesting comparison is the Unemployment Insurance Commission which is actually a smaller version of the Government. Working people allow deductions from their pay every week to be turned over to the Unemployment Insurance Commission in trust to be redistributed to people who are not working, people who need safety nets, people who need help. This is the same as the federal Government's budget but on a smaller scale. Day after day and week after week opposition Members state that unemployed people pay the premiums on unemployment insurance. I disagree with that. It is the employed people and employers who pay the premiums. Inasmuch as we have an obligation to unemployed people, we also have an obligation to the people who pay the premiums year after year. Many people who pay premiums for their entire working life never draw on unemployment insurance. So we have an obligation to put those funds to their best use in supplying a safety net for people who need it the most, and in providing facilities for people to get out of the cycle of unemployment. That is exactly what this Government is trying to do.
Getting back to the Budget, I believe it is a Budget of responsibility, and I believe Canadian people want responsibility in fiscal management. Before we discuss any aspect of the Budget, I think we have to answer the first question: Is the status quo acceptable to Canadians? Is it acceptable to have a national debt of $330,000 million? Is it acceptable to add $30,000 million or $40,000 million to the debt every year? I think not. It is not acceptable to be paying 35 cents out of every tax dollar of interest on our national debt and I am sure the public agrees.
As complicated as the issue is, the public have gotten to the bottom of it and they understand the issue. They agree that the Budget must address the debt and the deficit. That is exactly what this Budget does. It is a broadly based approach to reduce the deficit and eventually reduce the debt. It is a broadly based approach, but it focuses on large corporations, high income earners. Certainly that is very clear in the Budget.
During the last two weekends since the Budget was announced, I made it a point to talk to as many people in my riding as I could. We are not a rich riding. We are a rural riding more than anything. I have gone to auctions,
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rural meetings, town meetings. I have talked to academics, farmers, businessmen and accountants to find out their reactions. It is amazing how unanimous the reaction is. It is tough and no one is going to enjoy it, but everyone right across the board acknowledged that it is needed and it is fair.
The media in my riding have also supported it. A really good example is an editorial in The Amherst Daily News, which in its first and last paragraph says it all. The man who wrote this article, the day before the last election wrote an editorial in the same paper telling the people in my riding to vote for absolutely anyone but the Conservative candidate. The title of the editorial is "Tough, but Fair", and the first paragraph states:
Finance Minister Michael Wilson and indeed the entire Mulroney administration are to be hailed for their courage in presenting what surely qualifies as not only the toughest, but also the most necessary federal Budget in Canada's history.
I will read the last paragraph:
The important thing is that the Mulroney Government has taken a good first step on the road that will eventually lead to the elimination of the country's staggering debt, and that is the best possible gift the Government can give to future generations,
I could not have said it better myself.
This speech took 20 minutes when I wrote it, but it is not taking 20 minutes now. But finally, I want to say the vast majority of people in my riding and in Canada understand the problem we have to face. They accept their role in reducing the deficit if we as a Government act responsibly and display that responsibility in the form of good fiscal management. The fact is that I think Canadians have faith that our Finance Minister will set a course and stay on that course to eliminate the deficit and that he will keep on that course until the goal is met.


Some Hon. Members:: Hear, hear!


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


Jim Jordan: Mr. Speaker, I would like to congratulate my colleague who said, if I understood him correctly, that this is the first time he has risen in the House of Commons. I congratulate him on his comments.
I have a couple of simple questions that I would like to put to him. It has been repeated several times in the House that 31 cents of every dollar are now going to allay the cumulative debt. Can he tell me how much of each dollar was going to allay that debt last October 30? Has it

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increased that much since last October 30 when the election was on?
The Government said at that time that it had the deficit under control. There was no problem with the deficit. Every nickel had been accounted for. How much of each dollar was going to allay the debt on the same day that the Prime Minister announced that he was going to build a new prison in Quebec where everyone agreed a prison was not needed, nor were the roads needed that were going to be built into that prison? It was said that it is going to cost this country millions of dollars a year from now until eternity to service that prison when it wasn't even needed in the first place. What was the deficit on the day that the Prime Minister announced in Winnipeg last October that he was going to provide for 200,000 day care spaces? He announced that he would put it in place during the first session of the new Parliament. The first session of the new Parliament has come and gone, and I have not seen anything to indicate that the 200,000 new day care spaces are there.
My question then to my hon. friend is: Why is there this great concern now, five months or thereabouts after there seemed to be an abundance of money to offer new services, five months after the Prime Minister advised the country that new programs were in the offing as soon as this Government was re-elected? If you had been in the audience on that day in Winnipeg and were concerned about day care, I am sure you would have gone away thinking, yes, they are going to put that program in place. The idea being, hopefully anyway, that you would vote for that Party that made the announcement. So what was the situation on October 30-we are talking now about 31 cents on the dollar-when the Prime Minister announced the day care program which he was going to proceed with as soon as he was re-elected?


William D. (Bill) Casey: I appreciate your question. I understand there is a policy here that we go easy on new Members when they make their first speech, and I really appreciate how you have gone easy on me.
I cannot answer your question on the deficit. You have to understand that I have only been in politics a very short time, but even I remember the Minister of Finance (Mr. Wilson) talking about reduction of the deficit from the day he was elected. I know for a fact that he has reduced government spending year after year for the last
four years. I think it is a tremendous accomplishment because I cannot name one single business in the private sector that has accomplished the same thing. Certainly, the goal is to reduce the deficit which they have done on actual government spending, the increase in interest rates notwithstanding.


Mr. Corbett:: Mr. Speaker, I want to take the opportunity to congratulate my colleague for a fine maiden speech in the House of Commons.


Some Hon. Members:: Hear, hear!


Robert Alfred Corbett: It was indeed a tribute to the people who elected him who, I am sure, will continue to put their faith in his performance in the House of Commons in the years to come.
I would like to ask my colleague a question with reference to the Free Trade Agreement. Being an Atlantic Canadian myself, I know it must have weighed heavily on his mind, as it did on mine, during the last campaign. At that time we were well aware that in the years previous to 1984, when the Minister of Finance along with this Government was elected, that Atlantic Canada experienced a net deficit of jobs under a Liberal administration supported by an NDP Government that had made their bed well known in this country as being supportive of the Liberals and their negative policies with reference to Atlantic Canada. We saw the refreshing approach to the course of this country with reference to the Free Trade Agreement. In the few short years leading up to 1988 we saw in excess of 1.4 million jobs created in the nation, and probably in excess of 45,000 or 50,000 jobs created in Atlantic Canada alone. Indeed, that was a refreshing change.
Then the Government moved toward a Free Trade Agreement in the last 18 months. We in Atlantic Canada became extremely excited about the ramifications and the possibilities of what Atlantic Canada could become and how important that was. It was such a refreshing change from what we had been witness to over the previous administration which was supported by a New Democratic Party that was continuously playing lackey and lip-service to a Liberal Government.
For those reasons, I would now like my hon. colleague and friend from Nova Scotia to give us a short version of what he feels is the importance of the program which is
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now thankfully in place for Atlantic Canada. What will it mean to Nova Scotia?


William D. (Bill) Casey: Mr. Speaker, my riding of Cumberland- Colchester is not the richest riding in the country. I believe that the Free Trade Agreement will allow us to become an equal in Canada. It will allow us to expand our industry. In fact, it has already done so.
In my riding there are factories that build car parts and ship them to the United States. Those factories are doubling capacity at the present time. There is also a factory that builds wood splitters and ships them to the United States. Another factory builds stoves and ships them to the United States. Other factories build ornaments in pewter, and the list goes on. Those factories will increase their production.
In Amherst, where I live, there was a company owner who was very much afraid that he would be wiped out by free trade. He was extremely concerned about it. The other day I spoke to him and he told me that he has more people working than he has ever had. He does not understand what is going on. He is very excited and sees a bright horizon. Free trade will be his salvation, and I also believe that.


The Acting Speaker (Mr. Paproski):: There is time for one more question or comment. The Hon. Member for Halifax.


Ms. Clancy:: Mr. Speaker, as a fellow Nova Scotian, I would like to ask the Hon. Member for Cumberland- Colchester (Mr. Casey) how he can countenance the breach of privilege against his constituents which was constituted by the leak in the Budget. They, like all Canadians, had a right to have the Budget unveiled in the House of Commons and not on national television.
Is the Hon. Member not dismayed that he sits on the side of the House that allowed the most massive breach since the first Parliament sat 724 years ago?


William D. (Bill) Casey: I have no hesitation in talking about that issue. There was no negligence on the part of the Government. It was a deliberate attempt by someone, and it was not easy for that person. He or she attempted to sell the information to the media, and that did not work. He or she attempted to give it to the media on the radio, and that did not work. Finally, the person had to deliver the information. For whatever reason, it was a deliberate attempt. I do not know if it was sabotage or sour grapes. The fact of the matter is-and it is common
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sense-that no harm was done, that no damage was done, and that is what the Canadian people see.
When some Members in the House were attempting to turn it into a gigantic disaster, the Canadian people applied common sense and stated that it was not a disaster. It is too bad that it happened, and it should not have happened, but there was no harm done. Why throw the country into total chaos. Can one imagine the chaos in the economy if the Minister of Finance had to resign and the Budget had not gone ahead? It would have been chaos.
The Minister of Finance is a pillar of strength in the reputation of Canada in the world. If he were to be removed there would be terrific damage to our reputation, and it would take a long time to recover from that. I have no problem with it at all.


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated. On debate, the Hon. Member for Halifax.


Mary Catherine Clancy: Mr. Speaker, I wish to commence by doing something that I should have done when I rose during the question and comment period, that is, congratulate my fellow colleague, the Hon. Member for Cumberland-Colchester (Mr. Casey), on his maiden speech, and well done it was.
It is a very great pleasure for me to rise in the House today as a Member for one of the most historic ridings in the entire country. Halifax is one of Canada's oldest cities, and this year it celebrates the one hundred and fortieth anniversary of its founding. We have the largest city in the Atlantic region. Halifax is a naval base, a major commercial port, and a government centre. It is also the base for five universities with a sixth on its outskirts. Halifax is home to students, to senior citizens, to young families, and to service personnel. Although it is not immediately recognizable, as opposed to some of the larger centres in the country, within our city we boast various small cultural communities that reflect the new cultural reality that is Canada.
As Atlantic Canadians, Haligonians have known for many years that they live in what is unhappily known as a have not region. This is a bitter situation for a proud people who remember the glory days of wooden ships and, if one will pardon the paraphrasing, iron persons. However, bad as this situation has been, it became infinitely worse on the black night of Wednesday, April 26. Haligonians, innocently watching a hockey game, received a great shock that night. The Budget, the blueprint for the fiscal short-term future of our country, attacked them with a vengeance. The Government,

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which had promised programs that would at least hold the line on a regional economic downturn, delivered a betrayal of proportions rarely seen in this country.
The national child care program-and although it was badly flawed, at least it was there-suddenly disappeared. Gone was a program desperately needed by latch-key kids and their parents. Transfer payments for post-secondary education and health care were to be reduced by 1 per cent a year for five years. Via Rail budgets were cut by $541 million this year alone. The very existence of crucial rail links were threatened. Economic regional development agreements to various sectors were ominously not even mentioned. There was a new federal sales tax on scores of goods and services. There was a surtax on every Canadian taxpayer, including those at subsistence levels. There was an increased surtax on the hard-pressed middle income worker. There were cuts to foreign aid, cuts in defence spending, and cuts to the CBC of $50 million over four years. There was an almost complete abdication of the role of the Government in the Unemployment Insurance Program and a mortal blow to seasonal workers who depend on UI.
I might make a comment for my friend, the Hon. Member for Cumberland-Colchester, who spoke before. I am thinking of the seasonal workers in Cumberland-Colchester, many of whom travelled to Halifax and who were my clients. They will suffer desperately because of those cuts in unemployment insurance.


Roger Simmons: He doesn't care.


Mary Catherine Clancy: I know. None of them do.
Overriding all that there is a new word in the Canadian lexicon which strikes fear into the hearts of young and old alike and that word is "claw-back". Yet there is another tax, this time a tax that ends more than 50 years of the honourable tradition of universality in two of the keystones of our social survival network: the old age pension and the family allowance. The concept of universality has survived many attacks, until now. The Prime Minister (Mr. Mulroney) gazed deep into the eyes of the Canadian electorate and swore that those programs were sacrosanct. Those are his words, not mine. Now the Government says it is sorry, it just tripped over the deficit which it did not notice during the election
campaign. There was no mention of the deficit. The Conservatives sullied somewhat their blue lips when they asked Canadians to trust them last fall.
Canadians were given spending commitments of $17 billion until a scant five months after election night when their trustworthy government bludgeoned them with taxes and lacerated them unmercifully with cuts.
Senior citizens plan for their retirements, they don't just wait around until the day comes without any thought as to how they will survive after 65. Fifty thousand dollars a year for two pensioners is not poverty, no, but it is not wealth either. In an urban riding like mine, with one of the highest costs of living in the country, clawing back the old age pension can and will seriously jeopardize the plans and the lifestyles of these seniors.
Even more serious is the creation of two types of senior citizens; those who are perceived by the Government to be in need and those who are not.
For example, there is a woman in my riding. She is in her seventies and collects approximately $40 a month from a private pension plan from a job she worked at eight hours a day, 40 hours a week, for 40 years. She receives $40 a month but that was the state of private pension plans during her working life. She will not apply for the Guaranteed Income Supplement, no matter what we say to her. We cannot convince her to apply for the Guaranteed Income Supplement because her Nova Scotian pride, borne by all of us including my friend from Cumberland Colchester (Mr. Casey), wrongly tells her this is a hand-out.
On the other hand, she believes the old age pension is acceptable because everyone over 65 receives it, regardless of income level. She receives this desperately needed funding with her dignity intact. Also intact is her belief that this pension is in some small way a return for a lifetime of contribution to the Canada that we know. This a belief that I think is held strongly by all older Canadians and one that the Government is tampering with to its peril.
Abandon universality and with it goes this dignity and this belief and indeed the commitment to the Canadian future that we all want and, perhaps most important of all, the sense that Canada appreciates her senior citizens
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and thanks them for the contributions they have made over many long years.
So much for so-called sacred trusts. So much for the believability of the Government. So much for how much trust Nova Scotians will have in the Government's promises next time around.
Family allowance too will be clawed back, again in those families whose income is in excess of $50,000 a year. I wonder how many couples with a combined income of $50,000 plus, who have three children, a mortgage and all the other attendant bills that modern families accrue, consider themselves wealthy, especially when one adds the surtax and sales tax to the claw back.
This same couple has received little or no help from the Government when it comes to caring for their children. They may, along with their wealthier counterparts, get some respite with tax credits, but tax credits do not create child care spaces and neither does the Government, for all its fancy promises. Tax credits do not establish quality child care centres where none exist. Tax credits do not protect parents and children desperate for care and forced to make catch-up arrangements.
Recently I spoke to a working mother who was fortunate enough to be able to pay for child care if she could find it. Unfortunately, there was no centre near her home or place of work. Consequently, she arranged for her babysitting in her neighbourhood.
There are many women who provide this kind of care and who do it well. But it is not regulated or supervised and, consequently, we cannot be sure that all care given in this haphazard manner is the kind and level of care that we must insist upon for Canadian children. It is not regulated, it is not supervised, and therefore it is fraught with dangers.
Indeed, for my friend it was. One busy morning-and most working mothers will recognize the kind of busy morning-she was attempting to get her 18-month old ready, her four-year old ready and herself ready for work, nursery school and the babysitter. Her four-year old son refused to get dressed. He sat down in the middle of the floor and began to cry. She first tried to order him out of this tantrum but then realized that this was not a minor development but a serious matter. She discovered that this normal, active four-year old boy was being shut up in a closet for two hours every afternoon. His infant sister took a nap and the babysitter could not
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be bothered having an active four-year old running around. He spent two hours while his sister slept locked in a dark closet. An exception, some may say. I hope so, but I fear not.
There are mothers and some fathers who work hard on subsistence wages. One of my constituents worked from 8.30 a.m. to 4.30 p.m. The nearest child care centre opens at 8 a.m. It was impossible for her to deliver her child at 8 a.m. and be at work at 8.30 a.m. There was no babysitter available. She was forced to quit her job and live on social assistance. We can only guess at the blows to her self esteem, since they are not even counted in this kind of equation. What did the Minister of Finance (Mr. Wilson) say to her? He said: "Sorry, maybe we can get to it before the end of the mandate".
What about the mother who chooses to stay at home? It appears from some of its other policy decisions that the Government believes this is the desired position for Canadian mothers. What about this woman? If her husband makes in excess of $50,000 he will be forced to pay the claw back even though, since its inception, the money for family allowance has been deemed to belong to the mother. Here is a tacit move to joint income when a married couple cannot file a joint return in this country. I guess it is a question of: "What is yours is mine and what is mine is the Government's".
For ten years as a family lawyer, I saw women trapped in brutal marriages and I saw them save the family allowance from month to month for five or six years to accumulate enough cash to escape truly horrific situations. These women were not slum dwellers. They were not depraved. They were women who might even live in the same sort of neighbourhood as the Prime Minister (Mr. Mulroney), or the Minister of National Health and Welfare (Mr. Beatty), but they saved that money because it was the only money to which they had access, and the only way they could escape from situations totally untenable. Now that the husband in these situations must pay the tax, what extra pressures will be brought to bear on those women who already live in the twilight world of fear and abuse?
I am proud to be an Atlantic Canadian. I am proud to be a Nova Scotian, but I join all those in my region who protest the battering our people are taking. The murderous tax grab on the middle-income worker goes on. In fact, in Halifax today, small music schools fear extinction because of the sales tax, and parents face the situation

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that their children's exposure to music may become too expensive a luxury, a luxury they simply cannot afford.
Again in my riding of Halifax, a number of small restaurants flourish in the downtown core. Workers can buy their lunches for under $5. The sales tax will write finis to that. Restaurateurs of Halifax are frightened, with good reason.
In spite of everything, the middle-income worker of Halifax presses on. But it gets harder. Working mothers without access to child care, senior citizens threatened with a loss of the portion of their planned retirement income, travellers-mostly seniors and students-threatened with the loss of their favourite mode of transportation.
Nova Scotian universities, too, have a proud tradition. For generations they have provided teachers, lawyers, doctors and scores of other community leaders to the rest of the country, indeed to the world. Today, university administrations, faculties and students are suffering from underfunding. How does the Government react to this need? Does it offer relief to the beleaguered institutions and the people who work in them? No. The Government offers yet more cuts.
Education and a better life for our children has been the driving force behind Nova Scotians, be they coalminers, fishermen, dock workers, or farmers. The deterioration caused by the squeeze on our universities is perhaps the most obscene because it causes people to lose their dreams, their dreams of betterment. The loss of hope for the future is and will be unforgivable.
Students watch their universities crumble around them because established programs funding has been reduced. Shame it is and shame it will continue to be.
What about cultural funding? What about cultural unity forged through the CBC? It is losing its punch as the corporation loses funding.
Health care is at risk. Defence policy has been decimated. Small towns like Summerside and Barrington have been inflicted major wounds. Larger centres such as Sydney are bleeding from cuts.
Over all, it has been tax, tax and more tax. What for? It was to reduce a deficit that was not important enough to mention in the last election campaign.
Canadians are reeling from this juggernaut of a Budget. However, the deficit is hardly touched, hardly touched at all. My constituents understand the need to make sacrifices, to ensure that our children are not crippled by debt in their future endeavours. To get kicked in the teeth and not even see a significant deficit reduction is the unkindest cut of all.
My constituents and, indeed, the vast majority of Atlantic Canadians have a deep and abiding belief in Canada. That abiding belief was manifested by their rejection of the Reagan trade deal. They are disturbed and upset by this Budget with its concerted attacks on those Canadian institutions upon which they have depended for many years. They believe that they deserve better than a harsh uncaring Government that appears to attack without reason. They believe that this Budget is another step on the downhill slide to that level playing field with the United States. The problem is that one person's level playing field is another person's graveyard.


Mr. Andre:: Mr. Speaker, first, I would like to congratulate the Hon. Member for Halifax (Ms. Clancy) on her speech. I do not know whether or not this is her first speech in the House. It is; she nods her head in affirmation. I congratulate her. It was an excellent initial contribution.
However, she spent her speech, appropriately for a budget debate, criticizing the Budget. She criticized the expenditure cuts pretty well universally. I did not hear any praise for the expenditure cuts at all. I think that she was critical of all of them implying that they should not have been made.
She also criticized the revenue side, suggesting that taxes were too high and implying that the tax increases should not have been made.
She also said that she did not think there was enough reduction in the deficit to justify the spending cuts and the revenue increases. My confusion throughout is that if none of the cuts should have been made and none of the taxes should have been raised, then according to the finance figures the deficit would be about $36.5 billion as opposed to the projected $30.5 billion.
She has said that she is opposed to the cuts. She is opposed to the tax increases as well. However, she is
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apparently concerned about the deficit. In saying she opposes the two she is calling for a deficit of $36.5 billion. I wonder if she could clarify for me whether she has any views on what would be the appropriate level of the deficit. Should it be $36 billion or $40 billion? Should we be spending more?
There was an implication in some of her criticisms, in calling for example on expanding the child care program and so on, that in fact she would like to see more spending. Presumably a $40 billion or a $45 billion deficit may be more appropriate to the aspirations she talks about.
As a new member of the Liberal caucus, does she feel confident enough to say what would be an appropriate level of deficit? Will she elucidate on when would be an appropriate time to start paying off that debt? She must surely realize that the children about whom she spoke at some point in time will have to pay off the debts we are now accumulating.


Mary Catherine Clancy: I thank very much the Minister for his kind comments on my first speech. I would like to say that while it was certainly a great desire of mine up to and including the night of November 21 to be a member of the Government, sadly, that did not take place. While I would be happy to give the Minister some instruction on how to run the Government of Canada better, I am not sure that this is the correct forum in which to do it.
Indeed, there have been suggestions made over the years about how revenue can be generated as opposed to taxes being raised. There are manners in which this can be done. Far be it from me as a junior Member to advise a senior Minister in this fashion.
However, I would like to remind the Minister that the general debt has doubled. From Confederation to 1984 it came to one figure. That figure has doubled from 1984 to 1989. I think the Minister's suggestion that I think the deficit should be at $40 billion can probably be better handled by those on his side of the House as they seem to be better at increasing debt in a shorter period of time.
I assure the Minister most definitely that come the time that he and I switch sides in this House-in other words, that we move to his side of the House and he moves to ours-that I will make my contributions on the way that government spending, taxation and revenue generating can be done, along with my colleagues, in a most pertinent and strategic manner. I can assure you, Mr. Speaker, that the people of Canada will at that time cry hallelujah.
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Gilles Loiselle: Mr. Speaker, I would like to commend the Hon. Member for Halifax (Ms. Clancy) on her good contribution to the debate. I was very impressed with the warmth with which she spoke about the proud people of Nova Scotia, of her province and of her riding. She indicated to us how much she cares about them. I would like to tell her that we on this side of the House do care. She may not always agree with us, but we care a lot.
The greatest threat to the people to whom she was referring throughout her speech is precisely the size of our debt. It is a very real problem. It is not one that we have imagined. It is not a problem that we ran away from during the campaign, no matter what our friends say very frequently.
If you remember well, Mr. Speaker, toward the end of 1988 employment stopped increasing. The rate of interest was at about 10 per cent after the market collapse of the year before. We have a list of 20 different groups that have made studies of the situation. We in the Department of Finance were the most pessimistic. We said that we expected a lower rate of increase in our economy, and a lower increase in employment. We were convinced that inflationary pressure would go down. It did not. It very quickly created the problem with which we are faced. We do not run away from it. We are facing it in the best possible way, with the a very balanced Budget which is particularly attentive to the people with lower incomes. The Hon. Member will recognize that.
The Hon. Member spoke about regions. We are increasing our payments to the regions at a slower rate in certain cases but on the whole in a very considerable way. In the area of regional development over the last five years we have increased our programs by 50 per cent. Over the next five years they will be increased by 35 per cent. That is a large amount of money. We are trying to manage all these programs in a way that will guarantee that they can be delivered over the next years and not passed on to our children.
Basically, this is what we are doing. As far as the goods and sales tax reform is concerned, I would like to tell the Hon. Member that her region stands to profit more than most from that reform. The people of Nova Scotia are presently taxed through the federal sales tax in a most unjust way. Reforming it, making it more general and wider based, as well as with a lower rate, will improve the over-all situation of the economy across Canada, particularly in her province. On the whole, I do not think that

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she needs to be that pessimistic. The situation is certainly not all dark, far from it, and we have taken the necessary steps to ensure that progress will be made on a longstanding basis for the whole of Canada and also for our provinces.


Mary Catherine Clancy: Mr. Speaker, I would like to thank the Hon. Member for Langelier (Mr. Loiselle), and indeed I thank him as well for his moral support earlier when I was nervous about getting up.
However, I do not deny and I am sure the Hon. Member, by his speech, does care. He does care. Unfortunately, I think that this caring that may exist in isolated spots on the opposite side of the House does not necessarily run through to the powers in the front benches. I think there are problems in Atlantic Canada that clearly do not have a priority with this Government. While I think that the Hon. Member means very well when he talks about the reform of the sales tax, I have to tell him most seriously, most definitively, that for small business people in Nova Scotia and most particularly in my City of Halifax, that is not true. They are frightened.
Music school operators and restaurateurs in particular are very frightened. Parents are frightened. Every voter, eveiy citizen in my riding sees the possibility of an extra $1,000 a year coming out of his or her pocket. Piling that on top of the surtax is just creating a situation in an area that is economically depressed to a degree, and has been economically depressed for a long time; it is untenable and unacceptable.
I realize that he as an individual cares. I fear the Government as a group does not.


Mr. Deputy Speaker:: Resuming debate. The hon. Member for Elgin (Mr. Monteith).


Ken Monteith: Mr. Speaker, it gives me great pleasure to rise today to speak in the debate on the Budget. As a new Member of Parliament for Elgin, I have the honour to represent the people of Elgin County and Norfolk Township. As many Members will already know, this area is prime agricultural land and many constituents are active farmers. As well, we have a large
number of small businesses and I am pleased to report we hope to have more in the very near future.
The Chamber of Commerce has reported that there has been significant interest expressed by companies in the United States about relocating to Elgin since the implementation of free trade last January. I chose this opportunity to make my maiden address to the House of Commons because of the important messages contained in this Budget.
This Budget is about Canada's future. It is about the future of our children and our grandchildren as they enter the workforce and establish their own homes. This Budget means taking control today so that our children will have jobs and our seniors will have the income security programs that have become part of the Canadian way of life. This is significant in Elgin because 40 per cent of our population is either under 18 years of age or over 65.
This Budget looks seriously at our problem of debt and the ways to reduce it. It proposes that everyone should have a part in reducing our national debt. This Budget did not hit the poor, instead it was crafted carefully to protect low income Canadians.
The Budget proposals do not take away anyone's pension. The concept of universality remains firm. All Canadians entitled to old age security or family allowance will continue to receive it. What the Budget does do, though, is ask of those Canadians with the higher income to pay back some of these benefits.
Canadians with net incomes of over $50,000 are asked to repay benefits at a rate of 15 per cent of individual net income exceeding this amount. This measure will be eased in over three years and the threshold limit will be reviewed periodically. Is this so unfair, given our national debt? Is this unjust? I think not. I believe Canadians will realize that this Budget is necessary action.
When we look at the bottom line, we realize that the national debt is now more than half the size of the economy and is growing faster than the economy. Interest payments will require more than a third of the federal revenue this year. Mr. Speaker, the Conservative Government has worked hard to bring down the growth of the public debt.


An Hon. Member:: Oh, oh!


Ken Monteith: For example, the public debt growth averaged 23.5 per cent a year over the four years ending in 1984-85. In the four years ending 1988-89, this growth
May 8, 1989

has been reduced to 12.7 per cent per year. The recent surge in interest rates shows how vulnerable we are. In just one year, the projected cost of making interest payments on the debt has risen by $6 billion.
A young baby not even a year old now has a debt over his or her head of over $12,000. This legacy of debt to our young cannot continue. This Government has made it clear that we will not make our children and grandchildren pay for the debts of their parents.
The Minister of Finance (Mr. Wilson) has reviewed the Government's expenditures and has made difficult choices. No one likes to see programs cut or delayed but any prudent manager knows that programs must be reviewed periodically and judged on their current effectiveness and efficiency.
This is what our Minister of Finance has done in this Budget. He has looked at the pie and saw where money was spent and where he could save. In fiscal year 1988-89, Government expenditures amounted to $133 billion, of which $33 billion was spent to pay the interest on our debt. Thirty billion dollars was spent in transfers to Canadians, government cheques in the form of old age security, guaranteed income supplement, spouses' allowance, unemployment insurance benefits, family allowance cheques, and veterans' pensions and allowances. Twenty-four billion dollars in cash and tax points were transferred to the provinces, territories and municipalities to help pay for health care, education, social assistance and other programs.
In 1989-90, $34 billion will be transferred. This means the federal Government will transfer to the provinces, $1,293 for every man, woman and child in Canada. Not many Canadians realize the extent of federal support in these areas. The Budget papers show that $11.2 billion was spent on major subsidies and transfers. These include farm support programs, regional development programs, research and development activities, assistance to native communities, railway subsidies, student loans and payments to foster job skills.
Defence spending accounted for $11.1 billion, official development assistance accounted for $2.8 billion and operations of Government, $16.2 billion. Major payments to Crown corporations accounted for $4.4 billion.
Between 1984 and 1989, program spending has increased $13.2 billion. However, among the seven major components of program spending, operations of Govern-
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ment and major payments to Crown corporations have recorded absolute declines.
This is significant, because now the Government spends less on its programs than it receives in revenues. So progress is being made but more has to be done. That is why the Minister of Finance carefully analyzed the Government's revenues and its expenditures and he selected areas where cuts could be made without hurting the average Canadian. That is why all Canadians have been asked to contribute a bit more but low income Canadians are being shielded. The Government's expenditure reductions will amount to $1.5 billion in 1989-90, $2.1 billion in 1990-91, and rise to about $2.5 billion per year thereafter.
To meet these expenditure reductions, the Government proposes to slow the growth in some programs, defer some programs, cancel some previously announced plans and terminate programs that no longer serve public policy. As well, privatization of Crown corporations will be examined closely to see where the Government's interests can be reduced.
Defence spending has grown about six per cent each year in the last four years. This growth has been during a period when total government spending was increased at about 3.3 per cent annually.
The Budget of the Minister of Finance proposes that defence spending continue to grow but at a slower rate. In addition, the Government will not proceed with the acquisition of nuclear submarines.
Similarly, the ratio between the Gross Domestic Product and official development assistance will be reduced. Despite this reduction, Canada will still be contributing over $2 billion to developing countries this year.
The Government has already put in place new tax measures to support families with small children. Child care expense deductions of $4,000 per child under six years of age and for children with special care needs remain in place. The child care special initiatives fund of $100 million that promotes research and development into ways of improving child care services will also remain in place.
The Budget does defer, however, the expenditure of $4 million to create with the provinces additional quality child care spaces. This expenditure could be made at a

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later date in our mandate when our physical position is better due to debt reduction measures taken now.
The Government will continue to share costs with the provinces for child care services that are eligible under the Canada Assistance Plan. In 1988-89 this will amount to approximately $240 million.
Secretary of State programs such as the promotion of official languages, women's programs, native programs and multiculturalism will be reduced. Funds will be targeted toward community based projects which respond to community needs. Savings of approximately $10 million will be realized in 1989-90.
Currently, the Canadian taxpayer subsidizes ridership on VIA Rail to the amount of $641 million in 1988 or about $100 for each passenger. Ridership on the trains has not increased and rail is now one of the least used modes of transportation.
The Government's assistance to VIA Rail will be $541 million this year and will decline in subsequent years. VIA will be required to operate in a more cost effective manner and produce a corporate plan outlining measures to achieve this goal.
You will recall, Mr. Speaker, that a similar goal was set for Canada Post a few years ago. Many believed that that goal could not be achieved. Yet the Minister of Finance has reported to this Flouse that the Canada Post Corporation is expected to pay the Government a dividend this year. I am certain VIA Rail will be in the same position in a few years as well.
The Finance Minister also evaluated a number of agricultural programs which, of course, are of particular interest to my riding. The At and East Grain and Flour Subsidy program subsidized the rail transportation of wheat and flour exports to eastern ports. It was established in 1959 prior to the opening of the St. Lawrence Seaway in order to ensure that Canadian exports were shipped through Canadian ports and not through competing U.S. ports. At the time the subsidy was initiated U.S. rail costs were less than Canadian.
However, this competitive concern no longer exists since the cost of shipping by rail in the United States is considerably higher than shipping by water through the St. Lawrence Seaway. The elimination of this subsidy is the logical one, given the Government's commitment to reduce expenditures.
The Dairy Export Program provided for a direct subsidy of $6.03 per hectolitre on 2.2 million hectolitres of milk production destined for export market. This is one of the few, if not the only, farm group in supply management that receives an export subsidy. In 1984, the amount of milk eligible for the subsidy was reduced to 1.1 million hectolitres. Although the subsidy was to be reduced last summer, it was not. The Budget proposes to eliminate the remaining half and consequently reduce government spending by about $7 million annually.
The price of gasoline increased in this Budget, but the excise tax rebate program will continue until December of this year and the sales tax rebate program for farmers continues as planned.
As the Member of Parliament representing a large number of tobacco growers, I would be remiss if I did not mention the effects of taxation increases on tobacco products. Yes, it will affect my constituents. Tobacco farmers have seen a rapid decline in the consumption of their products, especially in the last decade.
However, the Government has implemented programs to help farmers ease into the production of alternate crops. The Tobacco Assistance Program helps farmers to exit the industry through buy-backs of tobacco quotas. Programs have also been implemented to assist farmers with diversification into alternate crops. And like crop insurance, the federal Government has carried the lion's share, while the provincial Government debated back and forth on whether or not it would join to assist these farmers.
The federal Government's commitment to agriculture has been outstanding. Canadian farmers have been sheltered from the effects of the international trade war in agricultural products at a cost of over $1 billion to the federal Treasury. Federal spending in agriculture has increased from $3.2 billion in 1984-45 to some $5.8 billion in 1987-88, and grain farmers have been assisted with over $10 billion in federal funds over the past five years. The federal Government has committed $800 million in drought assistance because it was obvious that crop insurance was not going to be sufficient to cover the effects of severe drought last summer.
As a Government we will need to examine closely the relationships in agriculture to ensure that long-range policies take into account the constitutionally shared responsibility among federal and provincial Governments in this important sector. Already review of programs such as crop insurance, safety net options and pesticide registration are under way. We are all in this together is the Budget's message, and we all have to pull together to insure that the public debt is reduced. That is why Canadians are being asked to pay a bit more in
May 8, 1989

federal surtax. High income Canadians are asked to pay even more, and large corporations will be required to pay more tax through the large corporations tax. There have been changes to the federal sales tax, but changes have also been made to refundable sales tax credits in order to compensate low income Canadians.
Our Finance Minister has carefully weighed his options. Expenditure and revenue measures have had considerable analysis in order to present a fair and balanced Budget. This Budget contains many complex issues, but the most important point of this Budget is that all Canadians will share in securing the future of the Canadian way of life.


Mr. Vanclief:: Mr. Speaker, just a few comments to the Hon. Member for Elgin (Mr. Monteith). First, I want to congratulate him on his maiden speech in the House.
Knowing that the Hon. Member is very involved in the agricultural community, I noted with interest the way he skirted around what the Budget is really going to do to agriculture and the bringing into line with the concerns of our fellow farmers south of the border. All I can say is that if this Government has another two or three Budgets to take a crack at Canadian agriculture in the manner in which it did in this Budget, we will have a level playing field, but it will be the playing field of the farmers south of the border.
The Hon. Member made the comment, for example, about the gas tax rebate staying in place until January 1, 1990. However, he did not make it as clear as I think he should have, in order to be fair to farmers, that they are going to be unable to reclaim the tax starting January 1, 1990 and this will cost Canadian farmers $100 million a year.
I would like to know what the Hon. Member is hearing from dairy farmers. I know what I am hearing from the dairy farmers in my riding, namely that supply management is being pecked away at. Will he make a few comments about that? Perhaps also he could give some comments about the concerns of pork producers. The Americans right now are insisting that a bond be posted at the rate of 3.5 cents a pound for chilled and frozen pork that we are shipping to the U.S. I would ask the Hon. Member to tell us about the views of the
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agricultural producers of his riding on these issues. Are they happy with the pecking away of last week's Budget?


Ken Monteith: Mr. Speaker, I thank my hon. friend for the question. He mentioned that farmers are concerned about the pecking away of the Budget. I would like to remind him that the Government supports agriculture. Never before has a Government bent over backward for agriculture. Just today, I made a statement in the House about import controls for hatching eggs and chicks, and I believe that supports the fact that the Government is fully behind supply management in Canada.
The Hon. Member mentioned the pork situation. I realize that the American Government is talking about imposing that bond. It has not yet been imposed, and I believe that the federal Minister of Agriculture (Mr. Mazankowski) indicated in the House the other day that the Government of Canada will be fighting that.


Ms. Langan:: Mr. Speaker, I have two questions for the Hon. Member. I would first like to congratulate him on his maiden speech in the House. I know the feeling.
The Hon. Member said that the provinces will continue to share in the cost of child care under the Canada Assistance Plan. Would the Hon. Member agree that the Government should insist that all federal-provincial transfer payments be spent on the services for which they are transferred when they go to the provinces?
Second, I was very pleased to hear the Hon. Member say that the Government supports the agricultural industry. I meet regularly with the dairy farmers of my riding. In fact, the dairy farmers are quite alarmed about the fact that hundreds of litres of milk a day come from the United States. Duty is supposed to be charged on that milk, but in fact the milk that pours across the border affecting farmers in the Fraser Valley is not charged duty by the National Revenue Department. I wonder if the Hon. Member could comment on that.


Ken Monteith: Mr. Speaker, I thank my hon. friend for her comments on my maiden speech to the House. I am sure that she experienced the same butterflies.
The Hon. Member mentioned child care. Of course, the responsibility for child care lies with the provinces, but the federal Government has committed, through the Canada Assistance Plan, to continue the payments that

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have been made toward child care and we are committed to child care.
There are many dairy farmers in my riding and I am in daily contact with them as well. Several of them spoke to me over the weekend and I know that they have concerns about supply management. However, I am sure that if they take an honest look at it, they will realize that the Government does support supply management.
As far as the situation with the milk in British Columbia, I understand that the Department of Agriculture is looking into it to see that it does not continue. We will have to ask the Minister that particular question.


Mr. Lee:: Mr. Speaker, I want to congratulate the Hon. Member for his speech also. I can appreciate his commitment and the commitment of many Hon. Members on both sides of the House to the agricultural sector of the economy. I would like to raise an issue involving the economy in general.
Since the Budget, questions have been raised and discussions have been commenced on general economic factors now present in the economy with the backdrop of increasing interest rates which has now been going on for several months and which, if not actual Government policy, is certainly something to which the Government acquiesces. We see in the Budget a significant increase in the tax take, cash taken out of the economy, involving several billions of dollars. At the same time, there is a drastic reduction of several billion dollars interspersed regionally across Canada. An example of this is the effect on Summerside, Prince Edward Island, of the closing of the military base.
These three significant economic factors are all occurring at the same time. As well, there will be an anticipated cyclical downturn in the economy. I wonder what steps, if any, the Government is now taking that would recognize the multiplier effect of these Government initiatives at the same time as there is an anticipated cyclical downturn. What steps are being taken to protect Canada from an inadvertent or negligent backslide into recession?


Ken Monteith: Mr. Speaker, I thank the Hon. Member for his comments on my maiden speech and for his question. Back in the early 1980s when there was a different Government of the day, no action was taken and there were criminally high interest rates. We as a
Government have taken action that will see interest rates steadied. We will see that there will be no recession in Canada because of the action this Conservative Government has taken under the leadership of the Prime Minister (Mr. Mulroney). The Budget of the Minister of Finance will prove the Opposition wrong. It will prove that we are on the right track to securing the future of Canada.


Mrs. Sparrow:: I, too, want to congratulate the Hon. Member for Elgin (Mr. Monteith) on his maiden speech. As he has mentioned, this Budget affects each and every one of us across Canada, but it is a fair Budget. We did not get into this mess ourselves. It started some 20 or 25 years ago. In fact, when the then Prime Minister, Mr. Trudeau, came to power, there was a debt of $18 billion. When he left, the debt was $170 billion. In fact, in the last four years, this Government has brought the deficit down each and every year. We have cut spending, and that is the first time since 1946 that any Government has cut spending three years in a row.
Sure, last year it cost us 31 cents on every dollar to service the debt, and this year it will cost 35 cents. If we did nothing but increase our spending by 24 per cent, as did the Government on the other side of the House, just where would we be?


Ken Monteith: Mr. Speaker, interest rates would sky rocket. I would hate to think where we would be; I think interest rates would be higher than they were before. Unemployment would increase. We would never reduce the debt. Our children and our grandchildren would not have a chance. They would have more than $12,000 over their heads when they were born; it would be $120,000 the minute they were bom.
This Government has taken the steps that we need. Never before has this happened in Canada, and the Opposition will not admit it.


Hon. Bob Kaplan (York Centre):: Mr. Speaker, in the 20 minutes that I have I want to advance the case being made by the Official Opposition. First, this is a Budget which is wrong for the time considering the way the economy is performing now and the signs ahead. Second, right or wrong, it is a Budget that is unfair and out of tune with the responsibilities that the federal Government has in our Canadian society.

When I address myself to the question of the rightness of this Budget for the times, I want to make something very clear. I do not take the position that raising taxes is always wrong, and that restraint is something that no Government should ever engage in.
That is not my proposition. I know that it is not popular in some quarters to talk at all about raising taxes. In the United States it is said to be a ticket to oblivion politically, and restraint is also said to be unpopular.
However, it is not a matter of whether one is a Liberal or a Conservative when one is talking about restraint and taxes. It is really a matter of the needs of the economy at the time and the situation of the Government accounts at the time. A case can be and ought to be made at times in our economic cycle for increases in taxes. Restraint is also an extremely important policy that Governments have to take seriously at times when the deficit is increasing, when social programs are getting out of hand, and when there are management problems in the social programs.
I do not want it to be said on the opposite side that this is an irresponsible criticism of their Budget. Taxes sometimes do have to be increased. Unlike the Americans, I think one of the great things about Canadians is that they are willing to have their taxes increased, provided that the increases are fair and are being used for something worth while. That is why this Budget fails. This is not the time to be increasing taxes. It is certainly not the time and never would be for the form of increase in which this Budget is presented.
The Trudeau administration, in its last term of office, experienced very tough economic times. Interest rates were high. The deficit was high. There was tremendous unjustifiable concern about the fact that Canada was going through one of the most serious recessions in post-war history, in fact one of the most serious since the Depression.
One can look back with hindsight and say what might have been done during the Trudeau administration to solve or reduce that problem. However, one thing is very clear: when the Government took office in 1984, the economic cycle was at a point when things were definitely and clearly looking up, not just in Canada but in the United States as well. The interest rate was falling. Employment was increasing. Huge profits were begin-
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ning to be made by companies that in 1980, 1981, and 1982 were sustaining losses that would protect and shelter taxable income for four and five years ahead from that time. The deficit was high, let me concede that; we thought it was high at $170 billion.
When the Government took office with those underlying economic conditions, if there were a time for a countercyclical type of budgeting that would bring the deficit down and would bring government programs under control, that was the time. The Government knew it. It talked about the deficit going into that election, the great scandal of it, how important it was for them to address it, how the economy would be able to handle it, how we would be able to survive a Budget the Hon. Member for St. John's West (Mr. Crosbie) was signalling was going to be a tough Budget.
I would like to submit to you, Mr. Speaker, that the Government blew it. In a four-year period, instead of taking advantage of great increases of employment, over 1.5 million new taxpayers added to this system, record profits for Canadian corporations, and great opportunities to deal with the deficit, the Government let the deficit grow to such a point that it grew more during its four years in office than in the whole history of our country up until 1984, including what it considered to be the very profligate years of Mr. Trudeau's administration when he was presiding over a very serious international recession.
Government Members had the opportunity for economic responsibility, for restraint, for raising taxes. They said that they would do it. They said that they had the backbone for it. They had the largest electoral mandate in the history of Canada, and they blew it. They have come back from an election in which they have spread propaganda and made promises of tremendous social programs: medicare promises, child care promises, promises to protect the social security network in Canada, and in this Budget their true commitment is revealed to be zero. When we look at a tough and unfair restraint Budget, with which I am going to deal in some detail in a moment, the economy over which they are presiding is a totally different one. They inherited from the Trudeau administration trends that would have permitted a tough Budget to be introduced. History has been rewritten about the Trudeau years, but the facts are there. A tough restrained tax increase Budget could have been sus-

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tained back in 1984 and 1985 when a boom was just being launched.
Just a few days ago we had an indication that the boom times may be ending, that this country and the United States may be looking to a downturn. Unemployment is up. There are more people unemployed and the participation rate is down. This is a time when a different kind of Budget is in order, a Budget that would be more in line with their campaign promises, broken in the Budget that they have brought forward.
I condemn this shift of gears by the Government because, as other members of my Party have indicated, it represents broken promises and a right wing agenda. Many things are given away, as I will show in a moment, that are critical to the well-being of Canada and to the identity of Canada. In any event, this is not the time for a Budget that restrains programs and cuts them back. This is the time when particularly in the regions of our country support is required. A government effort is required and government participation is required.
However, what do we see at the centre and in the regions of our country? We see withdrawal. Montreal, Toronto, and Vancouver can survive this Government, but I do not think the regions of our country will be able, nearly as well, to survive the kind of measures which have been introduced in this Budget.
I want to turn now, after giving my views about the timing of a tough restraint Budget as being at least four years too late, to talk about the measures contained in the Budget. What is the Government telling us in its proposals to the Canadian people? One thing that is clear is that Canadians and Americans have some very different values. One that is relevant to examine this Government's purpose is the way we feel about the market-place. In Canada there is no doubt that we appreciate the importance of the market-place. The market-place provides a discipline. There is a bottom line that focuses the attention of an enterprise on its efficiency. That is valuable. We promote and we respect the market-place.
It really goes further in the United States. In that country the market-place is accepted as a proper moral judgment of behaviour and value of the members of that society. Those who succeed in the market-place are valued, and the American people accept the consequences of the market-place in its moral terms. Perhaps the best example is Medicare. I suggest that Members check with their American friends and find out how differently they feel about Medicare than we do. They do
not see it as a service or a social need which must be met by Government through the tax system. They think of Medicare as a business. Medical services are provided as a business; every doctor is a small businessman entitled to maximize his profits and is under no obligation to serve those who cannot pay.
In one institution and in one domain of life after another in the United States, that is the approach. That is not our approach. We regard the social network as a fundamental responsibility of Government. On Medicare, the Americans look across the border to Canada and think they are looking at a Communist plot up here to make doctors into public servants working for the Government for a salary. Millions of dollars are spent in a campaign to reinforce that ideology on the part of the American people. I could mention many institutions that have become part of our social safety network which in the United States are only part of the market-place. But because of the time, I will only concentrate on one or two of them to make my point.
In particular, I want to talk about the situation of closing the military bases in regions of our country. I have spoken about this outside the House. I have made a suggestion to the Government. What I want to report to the House about is the idea of closing Downsview and moving its activities 45 miles away so that the Government can earn $750 billion in profit to keep the regional bases going in this country.
I am very proud to tell you, Mr. Speaker, that since I raised this suggestion publicly last Friday I have had a very strong balance of support from my constituents. These are people whose vested interests are to keep things from changing. Although there are exceptions, and I concede that, I am very proud to state that the overwhelming amount of reaction I have had from my riding is that this is a good idea. People are saying that if this can play a part in keeping the regions of our country continuing, if the DND presence in outlying regions can be sustained and foster viable economic life in those regions, they will accept this change.
I concede that it is not coming from everybody, but the overwhelming majority of people recognize that this is something that they are willing to do. It is a kind of sharing in which they are willing to participate. As far as the Government is concerned, it has made the most terrible mistake in falling into line with the market-place idea that things should be where the market dictates that they ought to be, rather than thinking of the shared approach that we have taken as a country to produce a
May 8, 1989

certain standard of living and certain opportunities for all Canadians wherever they are.
During the last four years, while the economy was booming, while more and more fortunes were being made, and while Canadians were becoming more and more prosperous and finding more and more jobs, one of the things that grew, particularly in my riding, was the number of food banks and the number of people without shelter.
In Liberal times in the past, we did not see that situation. Certainly, food banks have a place even in a very rich society. There is no doubt that a food bank is needed, or shelter is needed for battered wives who get kicked out of their homes, or for people whose house burns down and who have to take their children somewhere to spend the night, or for travellers who are robbed, or for people who are facing crises in their lives. In Tory times, in this Conservative age in which we live, that is not what the food banks are for. These are not the people who are lining up in my riding to get a free meal. We are now finding that food banks are there to help the poor, people whose poverty has been created by the Government's approach to economic development. They are there to help the poor get a square meal. Beginning in the third week of every month the line-ups begin in my riding as people on social programs, the poor-who are mostly children and single mothers, or people who are handicapped-begin to line up to keep their families alive until the inadequate incomes provided under the social programs to which the Government has abandoned them comes in at the end of the month.
With the increase in food banks across the country, and with the increase of the homeless, we are starting to see how this Government feels about the social safety net and about the market-place. These people are outside of it.
I do not like to talk about personalities, Mr. Speaker, but I cannot refrain from reminding the House that the wife of the Prime Minister (Mr. Mulroney) attended the official opening of a food bank in the Ottawa region during the last Parliament. The argument was made that here is a wonderful opportunity for the rich people in our society with social consciences, which are perhaps the strongest in the world, to get some exercise. Here is an opportunity for them to exercise their charitable
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nature and spirit of volunteerism which is such a strong part of Canadian life. Mr. Speaker, that is sick. I think it is a disgrace. During the prosperous times we have had in the last four years would have been the time to see the social safety net maintained and strengthened, not torn apart and weakened.
I also want to talk about the universal programs to which the Government has stated it is committed, and which it has claimed have survived the Budget. On this side of the House we are using the expression "clawback". What the claw-back means is that even though one may receive benefits from a social program, the old age pension or the baby bonus, if your income is over a certain level it is clawed back and, as a result of the Budget, you receive nothing. That is the end of the universal social programs in this country, if the Budget goes through. There is no way it can be said that it is a universal program if senior citizens do not get anything out of it, and many of them will not get anything out of it.
Until 1971 there was an Old Age Security tax on the income tax return. Up until 1971 it was 3 per cent of an individual's tax paid in order to receive an Old Age Security pension upon retirement. Mr. Speaker, that was a contract. It was an engagement between a citizen and a taxpayer and their Government that, when they retired, they would receive the old age pension. The person contributed to it and it was there in a separately accounted and segregated fund.
The Government has broken faith with senior citizens. It has the hypocrisy to tell them that they are still getting the universal programs. In my opinion, it has violated a contractual undertaking. It would be like an insurance company taking payments from a person and putting them in a separate fund and then upon retirement cooking the books and giving nothing for a lifetime of contributions to the old age pension.
At the beginning I stated that I could see situations in which taxes had to be increased. However, the tax increases that we have seen from the Government have been increasing the burden on the poor and on middle-income Canadians, and token increases on families that can afford to pay proportionately more. Mr. Speaker, this is not a tax increase that could be approved under any circumstances.

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The balance between how much corporations pay and how much individuals pay is extremely interesting. The balance is not moving to tax corporations more but, if anything, it is moving to tax corporations less and individuals more, and that in relation to increasing economic prosperity and increasing corporate profits.
There is a good reason the Government does not want to put fair taxes on corporations. The reason is to give a gift to Americans who are earning indirectly through their corporations from the Canadian economy. A growing number of our corporations are owned in the United States. During Liberal years the trend was the opposite. During these Conservative years we are moving increasingly toward control of our economy by Americans. Unless those corporations are taxed fully, certainly more than they are being taxed now, individuals primarily Canadian citizens will pay more than their share, and corporations that are increasingly owned by Americans will pay less and less of their share. That is not acceptable.
Taxing corporations is a way of making sure that there is a proper share of taxes for the maintaining of government services on earnings in this country, whether by Americans or Canadians. Taxation should be moving in the other direction. Corporations should be paying more. Those who are better off should be paying more than the poor and middle income Canadians, the Government's favourite milk cow, who are paying more.


Gilles Loiselle: Mr. Speaker, we have a saying in French that when something is exaggerated too much it does not exist.
I have two comments, particularly in respect of the closing remarks by the Hon. Member. Either he has not read the Budget or something is wrong. He talks about a corporation tax. Indeed, we will be collecting $1 billion in additional money from the corporations in the coming year.
He began his remarks by saying that we should have addressed the deficit problem when we came to power. I remind him of speeches by his colleagues at the time, that our measures were so severe that it would throw the country into a recession.
We did reduce the deficit considerably in the first year, the second year and the third year. We were thrown off track because of high interest rates. We are now trying to
address that very real problem. I believe that reducing the deficit by about $10 billion over the four-year period is quite an achievement.
He talked about unusual and exceptional economic circumstances. I want to remind him that the equalization programs have also increased by 50 per cent over the year, so that, according to our programs, there is 2 per cent more support to less favoured regions.
When the Hon. Member talks about differences between Canada and the United States, I like to see him wrap himself in the Canadian flag, but I hope he leaves some for us because we are just as concerned about this country. That is why we are taking these measures to fight the deficit and correct the debt problem that is with us.
He said we increased the debt considerably. I remind him that we were left with a $38 billion deficit by the Liberals. We have been fighting that for the last four years and we have made good progress. We will continue to do so.


Robert Phillip Kaplan: Mr. Speaker, my hon. colleague on the Government side has not really asked me a question, but I am quite happy to comment on what he said before the House. First of all, he wants me to recognize that corporations pay an additional $1 billion in the Budget. That is true. But how much more do individuals have to pay? If we consider all tax increases imposed on individuals, we can see that the balance between corporations and individuals changes very little and that the burden is not being transferred to corporations. I wish to emphasize that point. I want the Government to change the balance and not only the total tax on corporations. The Government must make corporations pay a bigger share of total taxes.

I want also to refer to the general suggestion he made, that we were critical of the Budget the Conservatives introduced in 1984. It is quite true that we were critical. They were a majority Government and there was lots to criticize in that Budget.
The fact is that whatever the Conservatives believe they can do to bring down the deficit would have been twice as easy four years ago. They must recognize, when they talk among themselves, that they made a big gaff in the general direction of their economic policy. To have inflationary Budgets and doubling the deficit over a
May 8, 1989

four-year period when there was a capacity to pay was a big opportunity lost.
Now, when an economic downturn seems likely, the Conservatives are jumping on its back and making it worse. They are making it certain that there will be more unemployment, more inflation and higher interest rates. This is their purpose in the Budget they have brought forward now. I feel reinforced in my observation that the Government blew it in 1984 by not trying to solve the deficit problem. The Government has blown it now by attacking the deficit as if we have a period of growth when in fact we are looking toward what could well be a period of decline.


Mr. Robinson:: Mr. Speaker, first I want to say that I certainly agree with a number of the criticisms the Hon. Member for York Centre (Mr. Kaplan) made of the Government's approach. I think it is quite clear that the approach of the Government in this Budget will increase the disparity between rich and poor in Canada.
The banks heaved an enormous sigh of relief when they discovered that there was to be no special taxation measure addressed to them. Certainly we on this side of the House would have hoped for a fairer tax system in this country, a system which is much more progressive.
I want to ask a question of my colleague, the Hon. Member for York Centre. Who is it that speaks for the Liberal Party on financial and budgetary matters? Of course, it was his colleague on the front benches a few seats from him, the Liberal finance critic, who said: "For my part I continue to wonder whether family allowances and possibly old age pensions need be universal, especially now that our federal deficits have mounted so markedly". A couple of weeks ago the president of the Liberal Party said: "We had a debate on universality but we did not ask ourselves whether the debate itself was still timely. As I see it, there is no longer a case for universality. We do not have enough resources. Since the need has become far greater among the poorest in Canada we must consider reallocating resources to offer generous assistance".
While I agree with the criticism of the Budget by the Hon. Member from the Liberal Party, I must ask who on earth is it that speaks for the Liberal Party. Is it the Liberal finance critic, who says that we must get rid of universality in family allowances and old age pensions? Is it the Liberal justice critic who just spoke? Is it the
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Liberal employment critic sitting in the House, who says something different? Who speaks for the Liberal Party on universality and on social programs? When they are saying one thing to one crowd and another thing to an entirely different crowd, why should we believe any of it?


Robert Phillip Kaplan: Mr. Speaker, I will be happy to send my colleague, the Hon. Member for Burnaby-Kingsway (Mr. Robinson), a chart which will show him who speaks for the Liberal Party on these matters.
I want to read a statement which I adopt and which reflects the position of the Liberal Party on questions of universality. It is a statement made by a Princeton University professor. I hope members of the Government will listen, because I think we are in grave danger of abandoning a very valuable program and disguising a retreat from universality as a continuing commitment to it. He states:
We pay taxes for schools to educate not just some parents' children, but the next generation of citizens. Even childless adults have a stake in the survival of their society. We do not pay Social Security taxes solely to sustain the aged but also to keep up a compact that rolls over from one generation to the next. These are the frameworks of a commonwealth.
On universality he states:
Linking the fate of the poor to the majority strengthens their common sense of membership in the nation. The poor gain more from the vigilance of middle-class voters than they lose from any scattering of scarce benefits. Narrow targeting of public programs promotes the political isolation of their beneficiaries: it feeds resentments of the excluded lower middle classes and exposes the poor to retribution. Programs that target benefits on the poor can also target cutbacks.
I have a number of specific concerns about the Budget. One of them is the regions and the damage that is being done to them. Another is the vitality of our universal programs and the damage that is being done to them.
It is not too late for the Government to reconsider this Budget. I urge it to do so. It has done so in the past with Budgets in which it has made stupid and unjust proposals which it subsequently withdrew. Let the Government recognize the errors that it has made in this Budget and withdraw them as well.


René John Soetens: Mr. Speaker, I have a question for the Hon. Member for York Centre. I believe he was a member of the Government back in 1972, a Government which participated in one of the second largest land grabs in Canada, the largest being Mirabel. The second

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largest was in my riding. I refer to the proposed Pickering airport site.
It is with regard to that land and a very valid recommendation that the Elon. Member made that I would like to follow up. He suggested that we consider closing Downsview and that we consider moving the Armed Forces base to Barrie. We have heard the comment that the base has to be in the Toronto area.
What I would like to propose to the Hon. Member and what I would like his thoughts on is this: we have a substantial federal landholding in my riding. We do not have a housing problem in my riding in that we are building lots of them. We could possibly move the Downsview base to the airport land in my riding. However, in closing down the airport, the Hon. Member suggested that we use some of that revenue to help the bases across Canada. I have some sympathy for that proposal.
Would the Hon. Member be willing to go even further? His area has the housing crisis, which crisis is created by people wanting to move to Toronto for real jobs. Would he be willing to recommend to de Havilland that it move to Prince Edward Island or to Portage-Interlake to create jobs in the regions of Canada, real jobs that would encourage people in the regions to stay where they are? That would help the Hon. Member's housing crisis. It would help the job problem. It would help the Government's problem in keeping the Canadian Forces Base in the Toronto area.


Robert Phillip Kaplan: Mr. Speaker, we have an extremely prosperous economy in the Toronto area. It is dynamic and very viable. I would certainly like to encourage de Havilland, which is now owned by Boeing of the United States, to expand its activities across the country. I was very pleased to see Magna International, an important Toronto company, respond to economic opportunities offered in Cape Breton Island. It created jobs there and a technical infrastructure that I know will have a lot of good spin-off effects. I would certainly encourage the Government to offer the kinds of programs in Prince Edward Island that it has offered in Cape Breton. They are programs that talk to the private sector.
However, I do not view the Summerside military operation in the same way that the Hon. Member views it. He seemed to suggest that a job at de Havilland is a real job-that is his expression. I took from what he said
that he meant that a job working for the Department of National Defence at Summerside is not a real job. It is a real job. It is an important job.
I think the mandate that the military base at Summer-side has is a mandate that is relevant to its location. It does search and rescue and North Atlantic patrol. What could be more appropriate for a base that is located in Prince Edward Island?
The Hon. Member should think again, and so should a lot of Conservatives, about the proposal that jobs in the private sector are the real jobs and that jobs in the public sector are not. That just does not wash. That is not the way this country is.


Mr. Deputy Speaker:: Resuming debate. The Hon. Member for Levis (Mr. Fontaine).


Mr. Gabriel Fontaine (Levis):: Mr. Speaker, I am happy to comment today on the Minister of Finance's Budget Speech.
The Budget Speech describes services the Government of Canada wants to make available to Canadians, as well as the revenues necessary to pay for their distribution. For years, the Government has made services available to Canadians but Trudeau, who called himself a Liberal although, deep down inside, he was an idealist and a socialist, did it for 20 years with the co-operation of both Opposition parties- For 20 years, we gave to Canadians, we offered them services and at every election we increased the promises for the services to be provided in future, but by borrowing from people who, when the promises were made, did not pay, were not even born or in some cases from teen-agers who today, tomorrow, and 30 years from now will still have to pay for the debts of the Liberals, supported by the socialists.
Those debts, Mr. Speaker, amount to $320 billion. That was the key point in drawing up our budget speech. How can you live with a $320-billion debt? How can you live with interest costing Canadians $3 million an hour or $80 million a day? How can you live with interest costing every Canadian $1,300 a year or a family $5,000 a year? That is the cost for every family in Canada-$5,000. It costs every Canadian family $400 a month to pay the interest on the services provided by the Liberal Government, in alliance with the socialists, over the last 20 years, just to get elected every four years!
May 8, 1989

That is the reality we Conservatives must continue to face today.
What are the effects of this debt today, Mr. Speaker? It means that the Government, with such a great need for money, must borrow more. And when demand for money is strong, bankers must raise interest rates. Government competes with private enterprise, both multinationals and small businesses, and then companies must pay more for the money they need to grow. And in turn, Canadians who must buy an automobile, furniture, sporting goods, or have to build additions to their homes, must pay higher interest costs because the Canadian Government needs money to service an extremely heavy debt. This impacts negatively on small and medium businesses, borrowers, consumers. In that light we had to exercize caution and make the best out of this financial situation. We could have raised taxes, thereby choking demand in Canada. This would have met the current inflationary trends head on, but there was a danger. If through our actions we dampened demands too much, another problem would arise, and we would be faced with another recessionary bout. So what does it take?
It takes the most balanced Budget possible, one that will not fuel into the existing inflation, and it also takes a Budget that will not lead us into a serious recession. To reach that goal we decided, first, to increase the federal Government's revenues by having the workforce pay part of our obligations, rather than, as has been done over these last 20 years by a Liberal administration, having our commitments and our present needs shouldered by our young people still in university, high school and elementary schools. We do not want to have them pay for our debts later on.
We want to leave them a nice legacy. We do not want to leave them debts built up by the Liberals. So we decided, first, to reduce Government expenditures by $1.5 billion and increase Government revenues by $3.5 billion.
Some will say we could have reduced Government expenditures further. True! But we would have hurt a lot of people-it would have hurt our seniors, chronic patients, young people in school, it would have hurt a part of the people who need to share in our common wealth. So we reduced our expenditures by $1.5 billion, a maximum in our view. We discontinued some services we felt were neither essential nor a priority. People sug-
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gested we could have made further cuts. We could have indeed.
But, Mr. Speaker, keep in mind that services may be curtailed, and some Canadians who work for Crown corporations or for the Government have just been told they will be laid off. Of course they will find employment elsewhere, but by the time they do find new jobs the Government will spend a lot more than their annual salary because there are expenses to be paid in cases of severance. If an employee who has been working for the Government or a Crown corporation for 10, 15 or 25 years and earning $30,000 or $35,000 a year is told he will be out of work tomorrow, employment termination may cost twice as much in some cases. So when we reduce operating expenses by $35,000, in some cases we increase costs to reduce this expense on the long term, but for the coming year expenses will go up, sometimes by $70,000. This is why we were unable to reduce our expenses by more than $1.5 billion.
By contrast, Mr. Speaker, a trend is unmistakable in the ever sharper decline in our expenses since 1984. Canada's Gross National Product that year stood at about $500 billion and at the time-the Liberals had been in office for 20 years-the Government did absorb, manage and look after one fifth of that amount. By 1994 we expect that public outlays or the Government's share of the GNP should be down to about 15 per cent, and this would then work out to 15 per cent of roughly 1,000 billion dollars.
Since the Budget Speech was made on April 27, Mr. Speaker, I have spent the weekends in my riding meeting true Canadians, real ordinary Canadians who are responsible for the collective wealth of our country, who do not live as parasites, but who have jobs, operate small businesses, or carry out their respective duties as educators, teachers, physicians, or nurses. When I met them, they asked me a few questions about our Budget. Some wanted to know if in our Budget we had cut the resources made available to the Canadian International Development Agency. I replied that we had in fact reduced our contribution by $360 million because we felt that according to an old saying which is worth repeating here, charity begins at home. It is an old saying which is still true today. We can also assure the people in Third World countries who are still getting more than $2.4 billion from the Canadian Government that we are in the process of strengthening our own economy in Canada and that as soon as we have achieved this goal, we will have even more resources available to help countries in

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need. But before we can share our resources, Mr. Speaker, we must first and foremost be able to collectively control our own economy.
Other people asked why we had reduced Old Age Security pensions? I replied to them that we had absolutely not reduced Old Age Security pensions. I explained that Canadians who have net incomes of $50,000 today and who are eligible for Old Age Security pensions have nothing whatsoever to do with those other Canadians who are getting both the Old Age Security pensions and the Guaranteed Income Supplements. This measure applies only to 4 per cent of Canadians 65 years of age or over and who are earning in excess of $50,000. For instance, a Canadian earning $52,000 will have to pay 15 per cent on the excess $2,000, that is, $300. This Canadian will therefore see his Old Age Security pension reduced by $300. In addition to that, the Old Age Security pension will disappear alltogether for 2 per cent of Canadians who are 65 years of age or over. That will increase Government revenues or reduce expenditures by $600 million.
Others have asked us why we did not plan to continue Government intervention in unemployment insurance. Why, Mr. Speaker, would the Government help me insure my house or my car? Is it the Government's responsibility to pay insurance premiums on my car?
The same applies to people who work. Workers can get insurance from the Unemployment Insurance Commission, which was put in place by the Government. They insure themselves against losing their jobs. We reduced payments slightly but we told those people: "OK, you will get a little less each week, but we will help you find another job faster. We are going to train you so that you can find another job fast.'' That is one thing we are offering workers.
Also, when we came to power in 1984, the unemployment rate was 11.6 per cent; today it is 7.8 per cent. We created 1,5 million jobs for Canadians.
We will reduce unemployment and make the fund self-supporting. We will give money to unemployed Canadians to make their training easier and we intend to curb unemployment insurance abuse. Everybody knows that people throughout the country systematically abuse this generous system at the expense of all Canadians. This must stop, Mr. Speaker, and we have taken action to stop it.
People have asked me why the increase for individual income tax, after we had reduced it. The answer, Mr. Speaker, is that in 1989-90, the tax increase for those earning $30,000 will be $80 a year. That is not even $2 a week. The tax increase for those earning $60,000 will be $240 a year, $20 a month or $5 a week as their share in restoring our country's finances. Is that asking Canadians too much in a difficult period? And for Canadians who earn $100,000, it will be $725 a year.
Mr. Speaker, those are the questions I was asked. In general, people are pleased with our budget, especially seniors, because they know from experience in life that nothing can be given that has not already been earned. Seniors do not want us leaving our debts to their grandchildren. So they are pleased that finally a government can continue to shoulder its responsibilities and put our country on the right track.
And finally, Mr. Speaker, we also said in our budget speech that we intended to modify our tax system by bringing in a new tax on goods and services to replace the tax on manufactured products. The main reason for this change is that the tax on manufactured products is unfair. For example, Mr. Speaker, take the company that makes this chair here.
So it is Canadian or American. If the chair sells for $400 the Canadian maker today would add a $48 tax to the cost of the chair and he will bid to sell it in the United States or anywhere in Canada. The American makes the same chair, he bids anywhere in Canada or the United States, but he does not have to contend with the 12 per cent tax on manufactured goods. So he can offer to sell his chair for $400 whereas the Canadian must market it at $448. This is why the tax on manufactured goods throws fair competition out of kilter. We had to eliminate the problem, and that is precisely what we will achieve with our goods and services tax. The goods and services tax will enable Les poulies Maska, a company located at Sainte-Claire very close to the riding of the Minister of Agriculture (Mr. Blais) to sell Cadillac brakes to General Motors in the United States without this 12 per cent tax which is shutting the company off its markets.
This will also enable Ressorts Cascade in the riding of the Minister of Indian Affairs and Northern Development to continue selling springs in the United States, whereas the 12 per cent levy was getting to be an export barrier. And the same thing goes for Salaisons Brochu in my riding. The company will go on selling ham in the United States without this tax at every stage of produc-
May 8, 1989

tion. That is why we did away with that tax. It will generate revenues to replace the tax on manufactured goods-$16 billion-and the Government will secure additional revenues and give credits to less fortunate people so they will not suffer from the goods and services tax.
Nor will this tax apply to such basic commodities as food, prescription drugs and medical devices. The tax will not apply if you sell the existing house in which you live. It will apply to new homes sold by builders, but perhaps it will come cheaper because up till now the 12 percent tax sometimes hits twice the same home built by a contractor. So to people who have to sell their homes, two, three, four, five or ten years down the road I say not to worry, the tax will not apply; it applies on new homes as sold by builders. It does not apply to housing, it does not apply to university education. Low-income people will receive four times a year a credit they can apply towards that tax.
So this was the essence of our tax message for our second term. We moved by steps to free ourselves from the hazardous economic situation put in place by the Liberals and the Socialists, as Hon. Members are aware. By steps we want to break free and better control our lives. The most important message, Mr. Speaker, is to tell our children: We will not leave you in debt. We are going to leave you an active Canada, with opportunities for a quality life. This was the essence of our message, Mr. Speaker.


Mark Joseph Assad: Mr. Speaker, this tax message is four years late. In 1984 your own Leader and the present Minister of Linance stated that within four years they would bring the deficit down to $7 billion. This has not been done, even in four years. Is that your tax message? European economists will not invest in Canada for the simple reason the Canadian Government is increasing taxes instead of making cuts where needed. If less money was taken away from Canadians, they would be interested in investing here. Is that your tax message? In view of the fact that from 1984 to 1988 you had a $82 million surplus? It is like someone in debt who for the next four years has significant surplus income. When this happens, we arrange to pay our debts. But, you increased it instead, and now you come here and give us a tax message?


Gabriel Fontaine: Mr. Speaker, I would like to have heard the Hon. Member for Gatineau-La Lievre (Mr. Assad) in 1984. When we came to power, we had an annual
The Budget-Mr. Fontaine
Budget of $38 billion, but we managed to bring that down. And when we did, your colleagues who were there at the time screamed bloody murder because we managed to reduce the Budget! You should have been there. You should have heard them. You should have read what they said. They objected to our tax increases that were aimed at reducing the deficit, and they also objected to our spending cutbacks. You should have been there!
These people also said that because of the Budget proposals made in 1984 and the years after that, unemployment would rise. The Budget did not cause unemployment. Thanks to the budgets we brought down in 1984 and in subsequent years, we were able to help the private sector create 1.5 million new jobs during the past four years.
When you mentioned European investors who were avoiding Canadian markets, you were wrong, because today, Europeans consider Canada as the promised land for setting up business and developing their American markets, all because of the Free Trade Agreement both your colleagues and the non-elected senators objected to. European investment is rising. You should do your homework. When we speak in the House, we try to inform Canadians, not play politics and mislead them.
You mentioned the debt has increased. Would you like to know why? It has increased because we have to pay the interest that is accumulating on the enormous debt you passed on to us in 1984. And if you take the debt increase, plus $30 billion in interest per year, it adds up to the difference between what we had when we came to power and what we have today. We managed to keep the debt down to that level and we also managed to improve the state of the economy and increase employment in Canada. You never did that during the 20 years you were in power!


Joy Langan: Mr. Speaker, I have a couple of questions for the Hon. Member. He said in his speech that seniors in his riding have a lifetime of experience and do not want to leave their grandchildren with a debt. Has he read the National Pensioners and Senior Citizens Federation submission to the Government of February, 1989 in which it shows that they passed a resolution unanimously urging the Government to eliminate payment of income tax from all Canadian families or individuals whose income is at or below the accepted poverty level? They go on to say that there are numbers of seniors in this country, particularly women, who are in fact living below the poverty line because their only source of income is

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the old age security and the guaranteed income supplement.
Does the Hon. Member not believe that those seniors, while they respect the need for fiscal responsibility, also understand very clearly how important it is to be able to eat well and be properly sheltered in their declining years? The Hon. Member refers to the new proposed sales tax and talks about the unfairness of it. I think we all accept that there are inequities in the current manufacturers' tax. But is it fair that the kids and moms in this country will be paying tax on clothes for children, on music lessons and on family counselling? Is that fair, Mr. Speaker?


Gabriel Fontaine: Mr. Speaker, the first thing I would like to say to the Hon. Member is that according to our previous economic message, as you well know, barely 10 per cent of Canadians 65 years old and over pay income tax. In fact, every day your Leader has been asking us to make them pay more taxes. These 10 per cent have worked in the course of their lives and accumulated a certain amount of wealth. They are paying income tax today, and your Leader wants us to change their tax rate and make them pay more. That is the answer to the first part of the question.
Second, you said that the elderly need a pension. We are aware of that. Senior citizens need a pension, but Canadians who are still in the labour force are entirely aware of the fact that we can go on giving them this pension and give our seniors the security they need, and that is very important. Senior citizens want to be sure they will receive their pension cheque every month. They know that Canadians who are in the labour force must have jobs to help pay for those cheques. And that is the kind of economic climate we have given them. We have created one million and a half new jobs since 1984. These people contribute to the public Treasury and ensure that senior citizens receive their pension cheques regularly.
About the goods and services tax, I said that it applied to all goods. I gave a list of exemptions, and I said that it replaces the old system and does not create new revenue. It does not penalize our young people because there are people living confortably who will still receive a cheque four times a year to compensate for the sales tax.
They will receive a cheque that says it is for the sales tax they have paid during the last three months. People who are just making ends meet and are living barely above the poverty level won't have to worry, because they will get a refund in advance.


Sergio Marchi: Having heard what my friend the Hon. Member for Levis (Mr. Fontaine) had to say, Mr. Speaker, I find it very hard to keep cool because a great many things he said are not consistent with the facts.
He tries to portray this Government as a political Robin Hood, a Government that robs from the rich through this claw-back and gives to the poor.
First, the Hon. Member makes the mistake of treating family benefits and pensions as some kind of hand-out, which they are not. We in this Party see those services as being a social contract with Canadian citizens, giving meaning and purpose to what we call Canadian citizenship. Second, he did not talk about the thresholds going down next year. He did not talk about medicare being put in a similar situation one day.
More important and more misleading is the tax situation facing Canadians. Canadians want to know why the Government is imposing such an unfair tax burden which will apply differently depending on who one is, where one lives, and how much one makes. Canadians do not mind paying their way for future generations. They do not mind putting their shoulders to the wheel, digging down, contributing and pushing Canada forward. However, when Canada moves forward, Canadians do not want people to be left behind.
We must examine not only this Budget because we cannot look at it in isolation, but the previous four Budgets. There have been five Budgets handed down by this Government. We have been asking in the House of Commons since the most recent Budget was introduced what the cumulative impact of these Budgets is on an average family in my riding. My riding is a hard working, middle-class type of riding, and I would imagine it is very similar to that of the Hon. Member for Levis (Mr. Fontaine). People in my riding are saying that after four or five Budgets, it is becoming more difficult to stay in the working middle-class sector of Canadian society.
May 8, 1989

They fall off on either one side or the other. The disparity between the extremes is getting bigger.
Let us look at the numbers. After five Conservative Budgets, a person earning $100,000 pays 8 per cent more in taxes. The guys and gals earning $30,000 will have to pay 60 per cent more in taxes. I ask the Hon. Member to try to explain that to Canadians. He should try to sell it. Canadians know an unfair tax system and an unfair Budget. I would ask the Hon. Member to address that unbalanced, unfair and inequitable situation that the Government has created rather than masquerade as some political Robin Hood which the Government is not.


Gabriel Fontaine: Mr. Speaker, I will try to summarize the issue. I am not sure whether he knows exactly what was his question. I think I heard him say that my Government was abandoning the poor, the sick and the aged. With the Socialists' assistance, the previous Liberal Government had systematically abandoned future generations of Canadians leaving them to pay the debts incurred by this generation and thus finding a way to stay in power longer. Mr. Speaker, these are the people who did abandon generations. We, on the contrary, are trying to assume our responsibilities. I must emphasize the fact that ever since we came to power, we have created jobs for over a million Canadians to help us develop this country. Far from abandoning them, we are taking them along. You had abandoned them! We have put an end to this practice. Now, all Canadians must strive to increase the collective wealth to ensure the availability of our social programs for the aged, the sick and the young.


Roger Simmons: Mr. Speaker, 1 spent last weekend in the riding represented by the Hon. Member for Levis (Mr. Fontaine) to witness the launching of the new Joseph and Clara Smallwood ship.

During my brief visit to his riding, I got the impression that the Hon. Member was a reasonable fellow. I was a little taken aback today when I realized that he was defending this foul Budget without equivocation.
Is the Hon. Member not really bothered by the manifest duplicity of this Budget? Last fall the spokespersons for his Party were saying the exact opposite. They were saying that everything is coming up roses, that
The Budget-Mr. Rodriguez
there is no problem. They could not pronounce the word "deficit". They never mentioned it at any time.


Pierre Blais: False.


Roger Simmons: He is awake. Welcome. We are here every day at this time. Come in more often.
I understand that we have hit a nerve. Last fall during the election campaign, there was not a word about the deficit. Everything was coming up roses. Things would be magnificent. We would all have two cars in every garage.
Now we are told what a terrible time it is and how terrible the Liberals were before 1984. Suppose we were to buy the thesis that everything was terrible before 1984, why has it taken almost five years for the people on that side of the House to discover that there is a problem? Last fall they did not know there was a problem. Is the Hon. Member not a bit bothered by this duplicity, this basic dishonesty that last fall we were told one thing and now we are being told something very different? They both cannot be right. They are mutually exclusive. Which is right, what we were told last fall or what we are being told now?


Gabriel Fontaine: In 1984 and even in 1983 as we were striving to get rid of this Government, Mr. Speaker, we had exactly the same platform as today. We were as aware then as we are now that before giving money to the needy, we had to earn it. That is the difference between the Liberal Party which was led by a Socialist-a Socialist had become the Leader of the Liberal Party. First he got his membership card from the NDP, but he switched to the other side because he was a political opportunist.
These people were living off other people's money. The difference with us is that we know we must create wealth before sharing it. This is still our position. We have been on this track since 1984 and we shall keep on going down the path already staked out four years from now, and after we have again been re-elected, we will still continue in that direction, Mr. Speaker.


John R. Rodriguez: Mr. Speaker, I am always delighted to follow the Hon. Member for Levis (Mr. Fontaine). Everyone has now heard from the extreme right, the voice of unreasonableness. Now we get to hear the voice of reason, of moderation and of concern.

May 8, 1989
The Budget-Mr. Rodriguez
Mr. Speaker, I thought about a theme for my contribution to this debate, and I have taken the theme of a question: On which side is this Government? To whom is this Government, under the present Prime Minister (Mr. Mulroney), accountable? Let me just draw a picture. We all have this very vivid picture of Brian Mulroney as a boy growing up in Baie Comeau. We all remember him. He sang for his breakfast. He sang for the bosses of the Iron Ore Company of Canada from Chicago. He sang for them and he got $50 American. That was big money in those days. Not so long ago, four years ago, he sang for his political boss. He sang in Quebec City for Ronald Reagan, he sang When Irish Eyes Are Smiling.
He has been singing his whole life for somebody else, for the people who pull his chain, the same corporate big-wigs that during the last election put up $2 million plus to advertise to Canadians for the re-election of the Mulroney Government, the same gang. Mr. Speaker, there is a saying that he who pays the piper calls the tune. They have called the tune. They have paid the piper, and now what are they doing? They have grabbed the pipe, and they are not only paying, they are playing the tune. There he is coming out of his basket, serpentine, sinuous and seductive. He is coming out of his basket and he is dancing to the tune. Whose tune is he dancing to? It is the same boys to whom he went for a very private and very secretive dinner meeting in Toronto one week before the Budget came down. Yes, he went to a private meeting in Toronto, possibly in the back rooms of Winston's. Now, who was the host of that secret meeting?


An Hon. Member:: John Turner?


John R. Rodriguez: No, not John-I do not say the J.C. word here. It was Tony Fell of Dominion Securities. He was the host. Who were among the guests? Hal Jackman from National Trust. How about this one-Alf Powis from Noranda? How about Bob Martin from Consumers Gas, and my friend Bill James from Falconbridge, and Doug Creighton from The Toronto Sun, The Toronto Star, et cetera, Bob Osborne from MacLean Hunter, and who of all people, Dave Culver flew all the way from Montreal, the same person who headed up that campaign to get the Tories re-elected. These are the real boys. So what were the boys saying? Mr. Speaker, there he was having a nice, quiet, cosy supper before the
Budget came down, presumably assuring them that there is nothing in that Budget that was really going to touch them, that everything was safe.
Did the Prime Minister meet with a single mother who is looking for child care for her children and cannot get it? Did he meet with a single mother? He did not fly to the Toronto to meet with the real people. Did he fly to meet with any family earning about $30,000 a year in Metro-Toronto, a family who is trying to keep a roof over their heads and food in their cupboards? Did he meet with anybody like that? You bet your bottom dollar, he did not. Did he meet with people from Summerside to explain how he was going to shaft them? Not on your bottom dollar he did not. Did he meet with the unemployed from Belle Island? No, Mr. Speaker, not at all. I ask, whose side is this Government on? I painted the picture of Brian the snake coming out of the basket, and people laughed. But it is as true as I am standing here that those who paid for the Government's re-election are now in fact calling the tune.
I want to tell you, Mr. Speaker, that I have an image of the Minister of Finance (Mr. Wilson). I do not know if many Members around here know it, but his favourite sport is squash. I have this image, and it keeps recurring again and again in my mind of the Finance Minister playing squash with John Crowe, the Governor of the Bank of Canada. I have this image of the ball being the unemployed in this country, the low-income Canadians, middle-income Canadians, Canadians who cannot afford homes. I think of the poor children of the world, and as the Finance Minister whacks the ball with a right forehand against the front wall, the ball ricochets off the back wall, John Crowe catches it with his high interest rates, and he whacks it up against the side wall, and the big, almighty, powerful but with a lot of integrity and courage and competence, he catches with his backhand and flips them so carelessly against the wall and smashes that ball, Mr. Speaker, pulverizes the ball, and they are playing with a blue ball, and he pulverizes the ball. That is the image that I have of these people who are responsible for fiscal and monetary policy in this country.
One has a Budget that in fact sticks it to them on a fiscal level, and the other one has the high interest rates and is sticking it to them on a monetary level. There they are like a squash ball pulverized between these two big, tough, powerful squash players.
May 8, 1989

Mr. Speaker, I ask myself, why did the Prime Minister not meet with these people? These are the real Canadians in my view. These are the people who really contribute to building this country. We know that they pay most of the taxes to support this country anyway with their revenues. So why? Because I honestly believe that Canadians are starting to see that this Government has decided who their friends are. Their friends are from the corporate boardrooms.


An Hon. Member:: It is not the mothers of Canada.


John R. Rodriguez: Of course not the moms, of course not the unemployed. They don't even understand. We heard of the Prime Minister's wife going to open a food bank here in Ottawa. Imagine that. I can just imagine it. Their own lifestyle epitomizes the chasm which exists between the people in this country who are poor and who do not have homes and those who have it all so posh and so plentiful.
The Minister of Finance has been touted as a man of considerable courage. They said he has so much integrity, so much competence. This is why the Prime Minister could not bounce him. We are told that Bay Street was up in arms. They were phoning the Prime Minister's office. The telex machines and the fax machines were running overtime. All of Bay Street were baying "Keep Mike, Keep Mike" because we are told that Mike Wilson, the Finance Minister, has courage and integrity and competence and he also has friends. His friends are in high places. His friends reside in the boardrooms. Does it take a lot of courage, I ask you, to cut spending in the foreign aid budget, to cut food for the starving of this world? Does it take guts to do that? Does it take a lot of courage to eliminate child care spaces in this country when there is a great and expanding need for it? At the same time, their friends in high places owe $35 billion in deferred taxes. Does it take a lot of courage?
The President of Costa Rica was here not so long ago and was introduced in the House. The Prime Minister said to the President:
We know the impact of poverty and violence in Central America. For this reason, Canadian economic assistance has more than tripled in the past decade and will increase significantly during the next.
The Budget-Mr. Rodriguez
This is the same Prime Minister with a Budget that takes millions of dollars out of our foreign aid over the next five years. Does it take courage to do that?
During the last campaign we heard a lot from the Prime Minister about the promises that had been made. We all remember those promises such as the upgrader at Lloydminster, Hibernia, and the tar sands. When we stated that those were promises that were being made before the election, we were told that they were not promises but that they were spending commitments. Now we are told that they are no longer in effect. They are gone. Is that integrity?
The Finance Minister stated the reason that he had to bring in such a tough Budget was that there was this sudden jump in interest rates after the election and it forced the Government to abandon all those spending commitments-promises. That whole business of spending commitments-Budgets, how it can play with words.
It is like the Prime Minister getting what was supposed to be a loan from the PC Canada Fund for all his personal expenses and Gucci shoes. When we pointed out that it was a loan and that it should have been recorded, it then became an advance. It was a loan-advance. Here we have spending commitments-promises. The Prime Minister said that he had to abandon them because of the sudden rise in interest rates. Last November during the election the interest rates were already three points higher than what the last Budget had forecast.
Everything the Finance Minister had forecast was blown to smithereens. That is not the hallmark of a competent Minister of Finance, or one with integrity, but he has a lot of courage. One can have a lot of courage with a squash ball and a nice big racket, and old John Crow and those other birds over at the Bank of Canada helping. It is pretty easy to smash them around.
Is it competent to continue as the Government has, even after making people pay? This is short-term pain for long-term pain. Even after all these squeezings, the Government is still projecting a deficit of $30 billion, and a projected national debt in 1991 of some $400 billion. What type of competence is that? That is managing debt. During the campaign we heard that this was a Government that knew how to manage change. It could not even manage to deliver a Budget without leaking it.
What we are now hearing from the Minister of Finance is "sharing the burden". As the Government claws back $320 million from the bank presidents and all these big wigs the Government claims it is clawing back this old age pension. If a person is non-resident in this

May 8, 1989
The Budget-Mr Rodriguez
country, he does not get anything clawed back. Therefore, E. P. Taylor does not get his old age pension clawed back. K. C. Irving does not get his old age pension clawed back. He is in the Bahamas. All those well-heeled Tories live somewhere else most of the year.
The Minister of Finance sees himself as the Robin Hood from Rockcliffe. He is clawing back $320 million. If he really wanted to share the burden, and this is a real suggestion for the Tories, he could have created another tax margin of 34 per cent. The maximum tax margin used to be 17 per cent and that was squashed into 5 per cent or 3 per cent. The highest is now 29 per cent. There is a margin at 29 per cent and another one could be created at 34 per cent for the real biggies. The Government could have raised $2 billion, and we would not have to tinker around with the principle of universality. We would not have to run after will-o'-the-wisps like E. P. Taylor, K. C. Irving, and a whole bunch of others. A further $2 billion could be raised. This would hit at those in the $500,000 club. Who is in that club?
The $500,000 club was referred to earlier by one of our speakers. There is A. J. de Grandpre, Chairman of BCE Inc. This is the man who was set up to tell us how we can phase in the Free Trade Agreement by trampolining people all over the country. He is making $852,900. Vic Rice gets $1,034,000,499. This is the man who closed down Massey-Ferguson in Brantford. There were 4,000 jobs lost, but he looks after himself pretty well. Here is a Liberal who did not do too badly at all. There had to be a Liberal in this pile. He was also a candidate. Frank Stronach ran against old Sine Stevens. Sine was a candidate, and then he wasn't.
He was a candidate for a whole year and on the eve of the election the Prime Minister found his integrity and said: "No, you are not a candidate any more", and poor old Sine was out on the street. Sine was sunk. Sine was sitting with his wife playing Let's Make A Deal. Anyway, Frankie baby is making $1,354,000. There is this guy Culver. He was the one at this little private, secret meeting at Winston's. He headed up the campaign to get the Tories re-elected. He is the President of Alcan Aluminium. He is making $1,454,259. He is a fellow who calls himself my friend, and I accept that. There is also Bill James, Chairman and President of Falconbridge.


Derek Nigel Ernest Blackburn: He is a friend of yours?


John R. Rodriguez: That is right. He made a contribution to my campaign, and don't forget it. With friends like these! His salary jumped 20 per cent to $1,689,533. That is real money. That is not an accounting-what did he call the deferred taxes-procedure.
How does the Government say it is going to tackle getting some money? It is going to put in surtaxes on corporations. If a corporation does not pay any taxes, it does not pay any surtax. There are 89,000 wealthy corporations in this country that did not pay taxes last year. Therefore they will not pay any surtax. There are a couple of thousand very wealthy Canadians who did not pay anything and who will continue not to pay anything.
People with $100,000 in taxable income paid an average federal-provincial tax rate of 53.88 per cent in 1987. With tax reform it dropped to 46.4 per cent in 1988. This Budget will inch it back up to 48 per cent in 1990. This is still a full 5 per cent lower than in 1987, but people with incomes in the $27,000 range will end up paying 5 per cent more than when tax reform started. That is the logic of the Robin Hood of Rockcliffe.
I come back to the original question with which I began: On whose side is the Government? Who pulls the chain of the Government? The answer is very clear. Those who are wealthy, those who are economically powerful determine the decisions that are made by the Government. So it has been with Liberals, so it is with the Tories.


Gilles Loiselle: Mr. Speaker, I would like to thank the Hon. Member for his dynamic contribution to this debate. I also want to remind him, in case he has read the Budget papers, of some information concerning the last part of his speech, when he talked about the surtax schedule based, for example, on income. I just want to say that the increased surtax amounts to $45 a year for taxpayers earning $20,000; $725 a year for people earning $100,000; and $2,175 a year for those earning $200,000. If that is not a progressive increase, I don't know what is. I think the Budget aims at protecting low-income individuals, and it would be dishonest for the Hon. Member not to recognize that fact. We have significantly increased the tax credits, and have asked the well-to-do to help us fight our debt and our deficit problem. So, I don't know where the Hon. Member got his information, but from
May 8, 1989

the figures he used, it is clear that his information does not reflect the real situation.


John R. Rodriguez: Mr. Speaker, those of us who have been here a long time and have had opportunities to look at the statistics which come from the Department of Finance with respect to those who pay taxes in Canada were impressed by the information last year that there were several thousand Canadians, very well heeled, who did not pay a penny of income tax. Those are not my figures. I am reporting figures from Revenue Canada.
I do not see what the Government has done in the Budget that in any way catches those people who have paid no tax in the past. Certainly, there is no minimum tax on corporations. In fact, if they do not pay any tax, they cannot pay any surtax.


Lorne Edmund Nystrom: Mr. Speaker, while listening to the Hon. Member for Nickel Belt (Mr. Rodriguez), I could not help but think of a study that came out yesterday in the Toronto Star. It analysed the federal Budget brought down a couple of weeks ago. It showed how families living in poverty in Canada have a net tax increase as a result of the Budget.
Let me give the example of a single parent family with two children and an income of $20,000. They have a tax increase as a result of the Budget. There is income tax, excise tax, surtaxes, an increase in the manufacturers' sales tax.
The Government is putting a tax on poverty, a tax on the poor. While the Government put a tax on poor families, did it close off the loopholes for the rich? There are a lot of loopholes for the rich.


John R. Rodriguez: Mr. Speaker, I thank my colleague for that excellent question. In fact, there is one loophole that really angers Canadians and cries out for correction. I agree with the person who said: "Eliminate the interest deductibility provision on non-productive takeovers in Canada to ensure that large pools of capital are not diverted to useless empire building". I agree with the person who said that, who happens to be the Prime Minister (Mr. Mulroney) in his book: "Where I stood, 1983".


Lorne Edmund Nystrom: That is past tense.


John R. Rodriguez: Here he is, the Prime Minister in 1989, and corporations still have the ability to borrow large amounts of money for corporate takeovers and mergers and the interest that is payable on the money they borrow to do that is still tax deductible.
The Budget-Mr. Rodriguez
The Prime Minister said where he stood. It seems to me he is still standing there in 1983 while we are in 1989.
If that loophole were plugged, I am sure it would account for several hundred million dollars.


Gilles Loiselle: Mr. Speaker, surely the Hon. Member will recognize that over the last few years we have made a considerable effort to remove the loopholes which existed under former regimes.


Derek Nigel Ernest Blackburn: No you haven't.


Gilles Loiselle: I have a very long list of efforts we have made and are making this year to improve the equity in our tax system.
As far as corporation tax is concerned, I hope he will realize that this year we will be getting $1 billion from the corporations. This is a new tax.
If the Hon. Member wants to listen, I can tell him the loopholes that were closed. I am sure he is aware of them. We have made a very good effort to make it equitable for all citizens and ensure that those who have a greater capacity to pay and contribute to the solution of the problem, which we have explained at length in the House, will make a greater contribution.


John R. Rodriguez: Mr. Speaker, I recall the first Economic Statement of the Government in 1984 in which it created the $500,000 capital gains tax exemption. It put that in place against all the advice it was getting from all over the country. At the same time it made changes to the Unemployment Insurance Act which treated severance pay, pension income, holiday pay as earned income for UIC. That involved a few dollars while, at the same time, it put in place a generous handout to the wealthy of this country.
Second, I say to the Minister that there are 89,000 profitable corporations which do not pay any tax at all. I recall the debate on television between the Leaders in 1984 in which the Prime Minister promised that there would be a minimum tax on corporations. We still have not seen that tax. Yet there are 89,000 profitable corporations that do not pay any tax.
In fact, the contributions to Revenue Canada are dropping in terms of corporate contributions to the revenues of this country. They are paying about 12 per cent of the total revenues collected while individuals have been paying an increasing load of total revenues collected in this country. People look for fairness in the tax system. They do not see that tax fairness, but see themselves being constantly taxed.
We know that as a result of this Budget the average family will be taxed $710 this year and $1,000 next year. Surely the Minister should not sit there and believe that

May 8, 1989
Supply
he can do all of those things they did for the wealthy while just ignoring average, ordinary Canadians and letting them pay, pay and pay.


BUSINESS OF SUPPLY
[Stage Direction]
The House resumed from Friday, May 5, consideration of the motion of Mr. Dingwall:
That, in the opinion of this House, the claw-backs proposed by the Minister of Finance with regard to the Old Age Security pensions and Family Allowances (1) undermine all Canadian social programs; (2) make easier future incursions against Old Age Security pensions and Family Allowances as well as other social programs, including medicare; (3) will fall most severely on Canadians of moderate means while costing the wealthy little; and That this House, therefore, condemn the Government for this attempt to violate this sacred trust.
Mr. Deputy Speaker:: It being 6 o'clock, pursuant to Standing Order 45(6), the House shall now proceed with the deffered recorded division on the motion of Mr. Dingwall, seconded by Mr. Wappel, concerning the business of supply.
Call in the Members.


Mr. Deputy Speaker:: I declare the motion lost.
It being 6.27 p.m., the House stands adjourned until tomorrow morning at 11 a.m.


[Stage Direction]
The House adjourned at 6.27 p.m.
[Stage Direction]
Tuesday, May 9, 1989