1990-10-15

Mr. Ian Waddell (Port Moody-Coquitlam):: Mr. Speaker, on a point of order.


The Acting Speaker (Mr. DeBlois):: The hon. member for Port Moody-Coquitlam, on a point of order.


Ian Gardiner Waddell: Mr. Speaker, last April I was in Egypt with the Canadian delegation of the International Association of French Speaking Parliamentarians, which consisted of four or five members, including the hon. member for Beauport-Montmorency-Orleans. Our delegation met the Speaker of the Parliament of Egypt. Last week, the Speaker of the Parliament of Egypt was assassinated. This is a tragedy. Egypt is on the road to democracy, and the role played by its Parliament in this process is very important. Mr. Speaker-


Some hon. members:: Point of order!


The Acting Speaker (Mr. DeBlois):: Order, please. I am sorry to have to interrupt the member. I am very much aware of the importance of the question he raised, but I don't think the Standing Orders allow raising a question of this kind at this time. If the hon. member would like to raise this matter later on during this sitting, he could do so under motions or some other item, after Question Period.
Pursuant to Standing Order 30(6), the House will now proceed to consideration of Private Members' Business as listed on today's Order Paper.


PRIVATE MEMBERS' BUSINESS-BILLS   MARRIAGE (PROHIBITED DEGREES) ACT MEASURE TO ENACT
Mr. Rob Nicholson (Parliamentary Secretary to Minister of Justice and Attorney General of Canada) moved: that Bill S-14, an act respecting the laws prohibiting marriage between related persons, be read the second time and referred to a legislative committee.
He said: Mr. Speaker, I am pleased to move second reading of Bill S-14, an act respecting the laws prohibiting marriage between related persons. A bill like this one was entered for discussion in the 33rd Parliament. It died on the Order Paper.
This present bill is about the third or fourth attempt by this House and by Parliament to make changes to the Marriage Act. Up to this point they have been unsuccessful. It is certainly my hope that the House moves expeditiously on this, agrees to second reading and refers this matter to a legislative committee.
Marriage and divorce are subjects given to the federal Parliament under the British North America Act. It is one of the enumerated heads in that constitutional document. As such it is within the capacity and indeed the responsibility of Parliament to have a look at this particular piece of legislation and, if it deems it necessary, to bring it into conformity with some of our present day thoughts on the subject of marriage.
Turning to a bit of background on this subject, it has always been a part of Judaeo-Christian ethic that there have been and should be some prohibited grounds upon which one person may not marry another based on blood relationships or relationships by marriage. Indeed there are prohibitions in the Old Testament, but the present law we are dealing with had its origins in or about 1563, in the reign of Henry VIII, a man who had more than a passing interest in the subject of marriage. His government tabled a set of prohibitions on whom a person could marry. Basically that table, which found its way into the Anglican Book of Common Prayer, has found its

Private Members' Business
way down to the present time. It was adopted by the common law provinces at the time of Confederation. There were some slight modifications in the province of Quebec, but that is the law that we have today.
I think most people who would have a look at this would agree that changes should be made and that sometimes inequities have resulted because of the fact that this particular act has not been changed.
For instance, if a woman divorced her husband she would not be able to marry her ex-husband's uncle, or indeed she could be prohibited from marrying her ex-husband's uncle by marriage. It does not happen very often, but it does happen in Canada that this creates a hardship on individuals. There are individuals who have got together over the years. There is nothing stopping them from living together; nothing stopping them from having children. There is no law that prohibits that. Yet, sometimes when they have explored their family histories they find this connection.
What do they do about it when they have found it? The process has been to petition the Senate and introduce a Private Member's Bill to correct the problem. Needless to say, this can be time consuming. It is a source of frustration and embarrassment and, because a lawyer is usually employed to get through this process, it can be quite expensive. I think there are good reasons why Parliament should make changes.
I was associated with this bill when it was introduced in the 33rd Parliament. The bill in no way affects or attempts to affect a religion's right to have a prohibited list. It does not in any way compromise a particular religious group's ability to say who can or cannot get married within its fold. This strictly deals with our civil responsibilities. It does not affect the religious responsibilities.
For those who follow this piece of legislation, there is one important change from Bill S-5, which was the legislation introduced in the 33rd Parliament. Bill S-5 did allow marriages between adopted siblings. It prohibited marriages between natural siblings, brothers and sisters, but if a person was related by adoption the old law allowed that. I disagreed with that at the time. I had very serious reservations about it. A number of provinces
had problems with that as well, because the whole thrust of provincial legislation in the area of adoption is to put adopted siblings, as much as possible, on an equal footing. This potential step by a federal Parliament was a step in the wrong direction in their minds and in mine as well.
I am very pleased that this particular legislation referred to us from the other place now prohibits marriage between adopted siblings. With that said, I hope we move expeditiously on this matter. There are Canadians who are waiting for this legislation.
The Senate is not proceeding with Private Members' Business. It is not proceeding with anything, one might say, at the present time. It is definitely not proceeding with petitions in this area of marriage, so I hope this House will deal expeditiously with this bill and send it to a legislative committee.


Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, I would like to follow up the remarks of the hon. parliamentary secretary with regard to Bill S-14, to follow the line of thinking he presented to the House, and to offer my support to his position.
I would also like to reiterate that amendments to the Marriage Act are long overdue. For the same reasons as those of the hon. member, Bill S-14 is a better bill than the former Bill S-5. For the same reason that he put forward we now have amendments with regard to adoptive siblings and relationships between adopted children and adopting parents. We have a bill that is more in line with the requirements and the thinking of the provinces and of the population in general.
Now that we have the amendments and the bill in a form acceptable to the House and to the Canadian people, it will solve problems for a great many Canadians who have been waiting a long time for these matters to be straightened out. I think it is in the interest of these people and the country to move ahead quickly with this bill.
The Senate at the present time has 30 Private Members' Bills awaiting it dealing with people who want to get married but who, under the existing act, are prohibited from doing so without the approval of the Senate. The Senate feels very strongly that these changes should be made. It feels that in dealing with Private Members'
October 15, 1990

Bills it is only dealing with something that should be placed and corrected in the legislation itself, and I agree.
It is an embarrassment for these people to have to go through this ordeal and to present themselves before the Senate to air their particular concerns and situations before that august body in the other place. As the parliamentary secretary has said there is a legal cost to these people. I think we should be moving quickly on this matter.
I agree with the parliamentary secretary that this bill should be sent to a legislative committee. Even though we have it in an amended form, which is preferable to the former bill we were discussing, Bill S-5, I think enough time has transpired since we last heard testimony concerning this bill that we should hear some commentary from interested groups and people who have participated in this debate.
Certainly we welcome any of the senators who wish to come forward. We are not interested in having the whole Senate. I am sure it is busy with other things. Its timetable is quite full, but there are three senators in particular, Senator Neiman, Senator Stanbury and Senator Nurgitz who have done a great deal of work on this bill. We owe them a great deal of thanks. At this point I think we should refer the bill to a legislative committee to deal with expeditiously. Then it can be brought back to the House for third reading as quickly as possible so that we can get this piece of legislation through.


Ian Gardiner Waddell: Mr. Speaker, I am rising for the New Democratic Party on this bill, an act to amend the Marriage Act, which originates in the Senate.
It comes from the Senate and we consider it here in the House of Commons. It is not normally done, but it is part of our House of Commons procedure.
I too support the bill. I was on the legislative committee last time the bill went through, and actually I would prefer that we just put it through today. Perhaps more out of caution we should put it to a legislative committee, but I ask that we hurry in considering it so that it does not die once again on the Order Paper in case the House is prorogued or something like that.


Some hon. members:: Oh, oh.
Private Members' Business


Ian Gardiner Waddell: There are a lot of groans around the House. Of course, that would never happen.
What does the bill do? The bill reaffirms the law that persons may not marry if they are related lineally or if they are brothers and sisters. It does not change that law. That is a fairly fundamental law that goes back way beyond the times of this Parliament.
However, this law relaxes the law to allow marriage between persons who are related as uncle, niece, aunt and nephew. There are some particular situations where such marriages can come about.
It clarifies the law by providing that a person whose marriage has been dissolved by divorce may many the brother, sister, nephew or niece, et cetera of the divorced spouse. This is not now permitted under the law.
Where has the bill been? The bill is in its third run through this process, as I have already mentioned. It was passed by the Senate in 1986 but died when the House prorogued in October of that year. It was passed again by the Senate but died in the general election of 1988. In fact, the House debated it at second reading in June of 1987.
All the speakers in the debate supported it. The subject matter was referred to a committee of the House which held hearings. I had the pleasure to be at one or two meetings of that legislative committee. However, the subject matter, that is this bill died on the Order Paper with the 1988 general election. There have been extensive Senate hearings into the issue as well as two House of Commons committee meetings.
Over 19 different religious groups, respected family law experts, geneticists as well as the chief law officers of the provinces have been consulted. It is clear that the legislation has had a substantial hearing.
Why should it be passed quickly? I am told that, at present, there are 30 couples requesting the Senate to pass special bills allowing them to marry. You see, Mr. Speaker, you can go before the Senate and get a special bill. Of course, that costs a lot of money and takes a lot of time. Also, it would be pretty difficult to go before the Senate to get things passed right now.
The alternative to this bill would be 30 individual bills. I do not think that is acceptable, because each couple would have to hire a lawyer and go through a long and expensive process with no guarantee of success. I think

October 15, 1990
Private Members' Business
this bill is a reasonable and fair alternative. Besides, I think that this matter is really the domain of Parliament itself.
Let me put it another way. Is this really the domain of Parliament? Perhaps Parliament should not be interfering with couples' choices in this matter. As the senators have noted, the Senate was once in the business of granting divorces. Everybody is happy that the hon. senators are now out of that business.
I must say it was through a lot of work by my predecessors here in the NDP-I can think of Arnold Peters and Frank Howard-who actually filibustered and caused all sorts of embarrassment on these divorce matters. Finally, the government said, well, to heck, we'll pass the new divorce act and get divorce into the courts and out of Parliament. The Senate was once in the business of granting divorces and everyone is happy that the hon. senators have finished. I will end there.
I would like to split my time with my friend from Regina-Lumsden, who is much senior and wiser than me. I believe he had a private members' bill on this subject matter. It is a wonderful thing about the House of Commons, if you hang around long enough, eventually the stuff you have done becomes law. He is not bashful, so I am sure he can speak for himself.
I ask that the hon. member for Regina-Lumsden be allowed the floor to complete the time allotted to our party.


The Acting Speaker (Mr. DeBlois):: Is there unanimous consent for shared speaking time for members of the New Democratic Party?


Some hon. members:: Agreed.


Mr. Les Benjamin (Regina-Lumsden):: Mr. Speaker, I thank the House for its consent.
I must admit at the outset that I did not hear about this bill until half an hour ago. When I did I had to recall that in the early or mid-70s I had a private member's public bill passed, starting in the Senate, completed in the House of Commons, that made legal the marriage of an uncle to a niece. They had been living together in sin, as
some people would call it, for a number of years. They had two beautiful healthy children, a nice home, he had a good job, they were respected in the community and extremely active in their church.
He wrote to me asking if I could do something for him. I made inquiries of the legal officers of the House and of the Department of Justice. They said the only way it could be done was by an act of Parliament, which would provide for an exception in the current law. On making further inquiries I found out it was going to cost quite a bit of money, especially if you started the bill in the House of Commons. It turned out it would be a lot cheaper to start the bill in the Senate, which is a cheap place to start.
This couple, who emigrated to Canada from the midwest United States, were married in a church twice, but there was no legal recognition of that marriage in the United States. They emigrated to Canada, I think, partly because of that, to try again. They became Canadian citizens and were good citizens. They made a good contribution to society in and around Regina. In fact, he was a leader in the whole business of houses that were environmentally sound and energy efficient.
I mentioned two children and they were beautiful children. But we had to arrange for them to receive several medical examinations. It was declared that they were perfectly normal and fit. Subsequent to that, the aspiring husband obtained a vasectomy.
When the bill came before the House of Commons, we worried about the cost of hiring a lawyer, the air fares for the couple to come to Ottawa, and a lot of other costs. On further inquiry it turned out all one had to do was have a lawyer in Regina draw up the appropriate documents and anyone could appear on behalf of the couple, or they could appear on their own behalf, before the senate committee.
In order to save money the poor couple had me appear on their behalf before the senate committee. I did not ruin the case because the Senate approved it. I might say the committee and the Senate as a whole approved it unanimously.
When the bill appeared before the House of Commons there was a very brief debate and because I made interventions with other members it passed unanimously-

Mr. Speaker, I submit that the law is sufficient as it now stands. The only exception that can occur is when it is provided by Parliament and those have to be circumstances which legally protect the children and any estate that may be left to those children. If for no other reason I submit the law should stand as is because there are exceptions to every rule and to every law and in this kind of instance Parliament should rule about the exception.
I invite hon. members to go back and find the record- I did not have time to look it up myself-and all that was said and done on that occasion.


The Acting Speaker (Mr. DeBlois):: Is the House ready for the question?


Some hon. members:: Agreed.


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


Some hon. members:: Agreed.
Motion agreed to and bill read the second time and referred to a legislative committee.


The Acting Speaker (Mr. DeBlois):: The proceedings are therefore adjourned until two o'clock this afternoon.
At 1.28 p.m. the House took recess.


SITTING RESUMED
[Stage Direction]
The House resumed at 2 p.m.

Mr. Jesse Flis (Parkdale-High Park):: Mr. Speaker, the Soviet Union has come a long way from the dark days of the cold war when Soviet military power and a Communist dictatorship repressed its people and threatened global security abroad.
Today the 1990 Nobel Peace Prize has been awarded to Mikhail Gorbachev for his phenomenal work in bringing an end to the cold war and drastically reducing the threat of nuclear war. While the world looked on with scepticism, intrigue, hope and finally belief that the impossible was happening, Mikhail Gorbachev, by counselling, negotiation and reassurance has led the Soviet Union to a new place in the international community and the United Nations.
Mr. Speaker, 1990 will be noted by historians as the year when east-west friendship has freed the best and brightest minds in the international community to solve the pressing environmental, social and political problems which no longer take a back seat to the cold war. Mr. Gorbachev deserves the credit he has been given today for helping to bring about this new reality.


PHARMACEUTICALS
Mr. Stan Wilbee (Delta):: Mr. Speaker, for many years the drug Methotrexate has been on the market as a valuable treatment for some forms of cancer.
While on the drug, some people noted that their arthritic problems improved considerably. It was found in further studies that the drug was an effective treatment for arthritis at a much lower dose than used in cancer therapy.
The company involved is now marketing the drug with a new name, Rhematrix, at four times the price of Methotrexate, even though there is no change in the manufacture of the drug. Methotrexate itself is no longer available to the public except through hospital pharmacies.
I would ask the Minister of National Health and Welfare to investigate this situation and make sure that the Canadian public is not being ripped off by this marketing change by a major drug firm.


CANADIAN ARMED FORCES
Mr. Bill Attewell (Markham-Whitchurch-StoufF-ville):: Mr. Speaker, I want to pay tribute today to Lieutenant John van Nostrand from the village of Vandorf who is serving on the HMCS Athabaskan, which is now stationed in the Persian Gulf off Bar Bahrain just 200 miles from Kuwait.
I met with John's mother, Janet, yesterday. She and her husband, Peter, spoke to John by telephone on Sunday, September 30. John was in good spirits, morale is high, and John, who is an engineer, said the HMCS Athabaskan is functioning well. John, who is 29 years old, has been in the Canadian Navy for almost five years. He

October 15, 1990
is a fifth generation van Nostrand from the village of Vandorf where I live.
On behalf of all members of this House, I want to salute all of our Canadian men and women who have joined forces with many other countries to bring peace to this volatile part of the world. We humbly pray for the safe return of all these brave men and women.


NOBEL PEACE PRIZE
Mr. Svend J. Robinson (Burnaby-Kingsway):: Mr. Speaker, the Nobel committee announced today that the 1990 Nobel Peace Prize has been awarded to Soviet President Mikhail Sergeiev Gorbachev for his leading role in the peace process which today characterizes important parts of the international community.
President Gorbachev has demonstrated exceptional leadership in bringing about democratic change in eastern Europe and in the Soviet Union. This fundamental transformation of the region has taken place through a predominantly peaceful process which certainly represents one of his most remarkable accomplishments.

The president is convinced of the need for international security and co-operation. As a result, it was possible to make tangible progress in negotiations on arms control and disarmament between the superpowers.
Mikhail Gorbachev faces many challenges. Today, however, we pay tribute to him for his role in promoting peace and democratic change in Europe.

Let us join in congratulating President Gorbachev and support fully his work toward glasnost and perestroika.


EXTERNAL AFFAIRS
Mr. Mark Assad (Gatineau-La Lievre):: Mr. Speaker, last Saturday noon a group of Canadians, mostly of Palestinian heritage or background, was staging a protest march in the rain protesting the excessive violence to which the Israeli army subjected the Palestinians, and there were 19 deaths.

As in the past, they now appeal to the government of Canada, seeking protection for the human rights of Palestinians under the control of the army of a foreign country.

I would like to suggest to those Canadians of Palestinian heritage, and to all those who plead for human rights and human treatment, to call upon the Canadian Jewish Congress for its help, for I am sure its influence with the Canadian Government would be much more effective.
These people, more than any other, know about suffering, anxiety and fear. I am sure they are aware that something has gone awry in Israel. They can question, with authority, some of the events that have happened in the past few months.


EDUCATION
Mr. Ken James (Sarnia-Lambton):: Mr. Speaker, educational opportunity is a major contributor to personal growth, social mobility, and a vital ingredient of economic growth and international competitiveness.
Today, however, more and more Canadians have begun to question the success of Canada's educational system.
In 1986-87 our primary and secondary educational system in Canada is said to have cost $23.5 billion. Yet, despite the expenditures, the results are mixed at best. In too many cases graduates still have problems with basic literacy and numeracy skills. We have a national dropout rate of 30 per cent, and we have serious skills shortages in Canada.
The time has come to revisit and re-evaluate our educational results. We need a system more sensitive to the future demands of our economy. Failure to do so risks Canada's future social and economic progress.
Education must become a more positive contributor, and our federal government must be a positive contributor in an improved educational process of the future.
October 15, 1990


CANADA POST
Mrs. Diane Marleau (Sudbury):: Mr. Speaker, today in Sudbury Canada Post has closed Postal Station A in New Sudbury to public counter service and will now serve only a small number of commercial customers, leaving the vast number of the public to go to some small private operation. They are now offered reduced service at inadequate outlets. Hopefully they will be able to have their needs met, but in this time before Christmas I doubt it very much.
This is yet another example of Canada Post putting profits before people. As the government continues to carry out its secret plan to privatize all postal services, Canadians are suffering from reduced services and higher prices.
I call upon the minister responsible for the post office to restore the service mandate of Canada Post, to put people before profits, and to restore full service to Postal Station A in Sudbury.


Mr. Greg Thompson (Carleton-Charlotte):: Mr. Speaker, the United States Customs Department has begun a program of nickel and diming Canadian businesses out of the U.S. marketplace by increasing the merchandise processing fee for Canadian businesses exporting into its country.
Effective October 1, 1990, the minimum charge for processing formal entries has risen from $3 to $16.80, an increase of over 500 per cent. Informal entry fees have increased as well. Needless to say, this imposes a severe handicap to our exporters.
The Canadian government must take action immediately to remove this new non-tariff barrier so that Canadian companies presently trading, and those looking to gain access to the U.S. marketplace, will be able to do so free of this restriction.


THE SENATE
Mr. Guy Saint-Julien (Abitibi):: Mr. Speaker, the Conseil du patronat du Quebec is sick and tired of the
Liberal senators. President Ghislain Dufour said the Liberal senators had put on a very poor show, in addition to flouting the legitimacy of Parliament and the democratic principles that form the basis for our parliamentary system.
Mr. Dufour went on to say he did not challenge the Liberal senators' right to criticize the GST. They had the right to do so and they even had a duty to improve the legislation if necessary.
Mr. Speaker, the Liberal senators argue that according to the polls, the GST is unpopular. However, the obstructionist Senate is well on its way to becoming even more unpopular than the GST. For the other side, Mr. Speaker, GST means "Good Senators' Thx".

English]


ABORIGINAL HONOUR CELEBRATION
Mr. Bill Blaikie (Winnipeg Transcona):: Mr. Speaker, last Thursday I had the pleasure of attending the first Annual Aboriginal Honour Celebration banquet sponsored by the Indian-Metis Friendship Centre of Winnipeg, an evening designed to recognize the major role that aboriginal people have played in the development of Manitoba and the particular achievements of those 12 chosen to be honoured by their community.
Unfortunately, four of the awards had to be given posthumously, like the one for Jackson Beardy in the Arts category, or the one for Tommy Prince, Canada's most decorated war veteran. But others like Dorothy Betz and Mary Richard were there to be duly honoured for their work in the justice system and community development respectively. Dave Courchene, Sr., former chief of Sagkeeng or the Fort Alexander Reserve, was honoured for his pioneer work in aboriginal politics.
The list of accomplished and dedicated aboriginal Canadians is long indeed. Many more such banquets will have to be held to honour them all. But at least a start has been made in Manitoba this last week. All those who made it possible are to be commended.

October 15, 1990


LAC SELL INDIAN BAND
Mr. Robert D. Nault (Kenora-Rainy River):: Mr. Speaker, in 1894 the Lac Seul Indian Band in northwestern Ontario entered into an agreement with the federal government and the province of Ontario. The terms of that agreement have never been respected by the governments involved, which has led the band to submit a land claim under the specific land claims policy of the Department of Indian Affairs.
For more than 20 years now the Lac Seul Band has been working on this particular land claim. Finally, in 1985 it submitted a statement of claim. Five years have since gone by and the Department of Indian Affairs has yet to respond to the claim.
This is just one example of how the government's specific land claims policy works or, for that matter, does not work. We have seen how frustrated the aboriginal community is with this particular policy. The Indian leadership is desperately trying to work with the government on these matters, but one very important element is lacking-trust.
I urge the government to move quickly in revamping its specific land claims policy and do so in consultation with the aboriginal people. The government must seek to regain the trust it has lost and it must live up to its fiduciary responsibilities. Anything less is unacceptable. Action, not meaningless words, is in order.


AGRICULTURE
Mr. Felix Holtmann (Portage-Interlake):: Mr. Speaker, yesterday, Sunday morning at 7.45, it was a farmer from Portage who phoned me and said: "Felix, Mazan-kowski is really listening to us". By announcing interest-free advance payments for grain this weekend, our agriculture minister has proven once again that this federal government is on the side of farmers.
Conservatives have acted. Westerners beware that the Reform Party and Preston Manning are against agricultural support when it is needed the most. The Reform Party would throw Canadian farmers to the wolves of the European Community and the United States.
For a good number of western farmers, interest-free cash advances will mean the difference between putting in a crop or leaving the land. Reform Party ideology would abandon the land and starve the very farmers who built the west.
It is time for western farmers to speak up. It is time for Preston Manning to reform his own platform, or it is time for Preston Manning to sit down and learn that words alone do not put bread on the tables of western farmers and their children.


AIDS AWARENESS WEEK
Mr. Jim Karpoff (Surrey North):: Mr. Speaker, I am pleased to inform the House that my provincial New Democrat colleague, Evelyn Gigantes, the Ontario Minister of Health, today helped launch AIDS Awareness Week.
This week's theme is outliving, outloving and outlasting AIDS. In Canada we have identified more than 4,400 AIDS cases, and there are now more than 2,500 Canadians living with AIDS.
There are continuing signs of the spread of the HIV virus, pointing to the need for increased awareness and education, yet there are serious shortcomings in the national AIDS strategy. An all-party committee on AIDS made useful recommendations which have not been acted upon.
What really is needed in AIDS Awareness Week is an awareness by this federal government that it is not meeting the AIDS challenge. We need more research. We need more education and more supportive and improved treatment if we are to eradicate AIDS.


GOODS AND SERVICES TAX
Mr. Jerry Pickard (Essex-Kent):: Mr. Speaker, the GST statements, are they fact or fiction? While millions of Canadians oppose the tax, the government clings to this proposed fiscal initiative that will fuel inflation and push us deeper into a recession. That is fact.
In the government's zealous multimillion dollar GST campaign, the spoken word differs from the written word. Here is the fiction. Grocery store owners were

advised in their Revenue Canada GST guide that basic groceries do not include FST and are therefore not eligible for rebate.
Yet on Friday the Minister of Finance stated that there is FST on food. He said it amounts to one or two percentage points.
To meet the government's own objectives, business has been told one thing and consumers are told something totally opposite. Canadians cannot accept this two-faced approach.


THE ENVIRONMENT
Mr. Ross Belsher (Fraser Valley East):: Mr. Speaker, Canadians are anxiously and optimistically awaiting the introduction of the government's Green Plan.
This is especially so in the case of the people in my riding of Fraser Valley East. The people of the valley from Abbotsford, Chilliwack, Agassiz, Hope and beyond are particularly concerned with air quality. You see, as beautiful as the valley is, as majestic as the mountains may be, the air we breathe leaves much to be desired.
We in the valley are subjected to the smog and emissions of Vancouver. It is literally an ill wind that blows into the valley from the city. The country living of the valley is tainted by the smog of the city, obviously not the best of both worlds.
It is only natural that we in the Fraser valley are anxious about the Green Plan and active solutions. In fact, we are waiting with bated breath. I trust the Minister of the Environment and his colleagues are addressing this problem.



ORAL QUESTION PERIOD


Hon. Herb Gray (Leader of the Opposition):: Mr. Speaker, I have a question for the Minister of Finance.
Last week he and the Prime Minister refused to admit there was a recession, but the Prime Minister did agree
Oral Questions
that he and his government had induced a slowdown, one planned in the budget of February 1990.
In that budget the Minister of Finance said: "Growth is expected to rebound in the latter half of 1990." We are now in the latter half of 1990, and growth is hardly rebounding. There is less and less growth while there is more and more unemployment.
Does the Minister of Finance still stand by that budget projection on growth? If he does, how is he credible in light of figures showing growing unemployment, growing bankruptcies and the figures today showing a drastic decline in the sale of homes in Canada?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, I gave a speech on September 17 in Edmonton which gave Canadians the most up-to-date thinking on the part of the government regarding the economy.
In that speech, I said that some of the statements I had made in the budget did not come to pass as quickly as we thought they would. In other words, I expected a weaker economy earlier in the year. The economy was stronger earlier in the year.
The economy is weaker at this time of year, but we expect the recovery to occur as we move into 1991. Economies are vibrant animals. They do not just happen in a static way. We give our best projections at the time.
If my hon. friend would go back to the economic projection record of this government over the last six years, I think he would find that it was enormously better than that of the previous government.


Herbert Eser (Herb) Gray: Mr. Speaker, I have a supplementary question for the Minister of Finance.
I do not think Canadians were surprised to find that Mr. Gorbachev received the Nobel prize for peace today, but I do not think Canadians would expect this Minister of Finance to be even on the short list for the Nobel prize in economics.


An hon. member:: That is for sure.


Herbert Eser (Herb) Gray: Mr. Speaker, Doug Peters, chief economist at the Toronto-Dominion Bank, speaking of the Minister of Finance, said today: "The message that does not seem to be getting through is that this is not a minor incident; this is going to be a long, pro-

Oral Questions
tracted, serious recession and the longer interest rates stay up, the longer the recession is going to be."
When is the message going to get through to the Minister of Finance that we are now in a real and serious recession caused by the policies of his government? Will he today bring forward new policies and a new economic plan, including lower interest rates that will not induce more recession but prevent it from getting even worse?


Michael Holcombe Wilson: Mr. Speaker, let me remind my hon. friend again that the reason we have high interest rates, and have had high interest rates over the last couple of years is precisely because we are facing a serious inflation problem.
If my colleague would check The Globe and Mail today, he will see that British inflation in the month of September was 10.9 per cent. We are trying to avoid that problem in Canada, and we have been avoiding it by following the set of policies we have been following.
If my hon. friend could just cast his mind back to when he was in the previous government in 1981-82, inflation was at 13 per cent in this country. It was allowed to get out of control. As it got out of control, interest rates had to go far, far higher than today, in the 20 per cent to 25 per cent range, to kill inflation. We want to avoid that, Mr. Speaker, and have been avoiding it. That is precisely why the policies we are following are supported by many people in the country.


Herbert Eser (Herb) Gray: Mr. Speaker, the Minister of Finance keeps talking about inflation, but he also insists on introducing a GST which according to the minister will have an even worse impact on this country's economy.
How can Canadians be expected to take the minister seriously now, when he was consistently wrong before? Why will he not admit that his policies brought about this recession, and when does he intend to do something to get us out of it, once and for fall?


Michael Holcombe Wilson: Mr. Speaker, my hon. friend likes to quote other organizations. One he was fond of quoting last week was the Economic Council of Canada.
The Economic Council of Canada supports the goods and services tax. It supports it for one very clear reason, because it is good for this country.
Many organizations last week were saying that one of the best things we could do was to get interest rates down. I think my hon. friend would agree with that. But you cannot go to heaven without dying.


Some hon. members:: Oh, oh.


Ms. Clancy:: Show us.


An hon. member:: Prove it.


Michael Holcombe Wilson: You have to go through-well, my hon. friend wants to go to heaven but he does not want to die. He wants to have the world in his hands. He wants to have lower interest rates but he does not understand how we will get those lower interest rates. One of the ways to get lower interest rates is by passing the pieces of legislation that are in the Senate.
Why is it that my hon. friend, in his cynical, partisan way, can say: "I want to get interest rates down but I will not go to the Senate. I will not talk to the senators and ask them to get the legislation through that will address the deficit problem, that will address the problem of higher interest rates, and that will address the problem of improving the economic health of this country".


Herbert Eser (Herb) Gray: Mr. Speaker, the Minister of Finance just said: "You cannot go to heaven without dying", in speaking about the economy. Why does this minister and his government want to kill the Canadian economy?


Some hon. members:: Oh, oh.


Herbert Eser (Herb) Gray: Why does this minister and his government act like that officer in Vietnam who destroyed a village and all the people in it by saying that he had to destroy the people and everything in that village in order to save it. What crazy, misguided policies.
October 15, 1990


Michael Holcombe Wilson: Mr. Speaker, let me quote L. C. Wayne, the mayor of Saint John. She said:
There's been a lot of talk about recession and you talk about
preaching doom and gloom every night on The National. But it hasn't
hit us that way. In fact right here, our tourism has been stable and in
some sectors, it's been up.
That is not the case in every part of the country. But the point I am making is that the exaggerated rhetoric of the Leader of the Opposition and other members opposite is not helping the economy. The position of the Liberal Party of Canada in supporting the minority in the Senate, a minority who will,not allow a vote to come to pass on four pieces of essential legislation that are part of the economic program that this government was elected on in 1988. Why is he supporting an unelected minority group of senators who will not allow this legislation to come to a vote? Will he explain to Canadian people why he is taking that undemocratic stand?


Some hon. members:: Hear, hear.


Herbert Eser (Herb) Gray: Why does this minister want to kill the Canadian economy under the guise of eventually saving it?
Does he not realize that Canadians know that even dying will not help them because this minister intends to tax even funerals with his goods and services tax.


An hon. member:: Right on.


Michael Holcombe Wilson: Mr. Speaker, I am not sure that I understood the question.
The hon. member for Broadview-Greenwood has said in the past: "You can't hang-glide to power these days." The Liberal Party in the 1988 election said if they were elected: "the Liberal government will not proceed with stage two of the Mulroney government's tax reform plan."
The Liberal Party is not the government. The Conservative Party is the government. The Conservative Party was elected to enact its legislative program and its platform. What we have is the cynical hypocrisy of the Leader of the Opposition supporting-


Some hon. members:: Oh, oh.


Mr. Speaker:: Let's try and move on. The hon. member for Ottawa West.
Oral Questions THE ENVIRONMENT


Mrs. Marlene Catterall (Ottawa West):: Mr. Speaker, my question is for the Minister of the Environment and concerns the Rafferty-Alameda dam project which is now proceeding without an environmental assessment.
On Friday the' minister said that the Government of Saskatchewan could not proceed with the Rafferty-Alameda dam project. News reports in Saskatchewan today are saying that contracts for the Alameda were let last week.
Did the minister know about any such contracts on Friday? What does he know today, and does he still stand by the statement he made Friday?


Hon. Robert de Cotret (Minister of the Environment):: Mr. Speaker, I would like to assure my hon. colleague that I certainly stand by the statement I made on Friday.
We are operating under a court order. This government fully expects to continue to respect the court order that requires a full review of the project before it can go any further.


Mr. Speaker:: The hon. member may, through the Whip, want to rise again. But I have to keep track of the number of questions that have been asked. I think I am obliged to go to the hon. member for Yukon.


Ms. Audrey McLaughlin (Yukon):: Mr. Speaker, my question is for the Minister of the Environment.
On Friday the minister said that there was no deal with the Saskatchewan government on the Rafferty-Alameda dam. We know that the environmental panel studying the Rafferty-Alameda dam has resigned. We know that the court has said that the federal environmental review must take place.
Given that the premier of Saskatchewan has ignored the environmental review, has ignored the courts and seems to be ignoring the minister, will the Minister of the Environment revoke the licence for the Rafferty-Alameda dam?


Robert René de Cotret: Mr. Speaker, I can only say that we are going to follow the court instructions that we had on this project.

October 15, 1990
Oral Questions
Those were handed down after quite a long delay. We have done everything in our power to respect the order of the court and we will continue to do so.


Audrey Marlene McLaughlin: I have a supplementary question for the Minister of the Environment.
He says that he is willing to do anything that he is required to do. What is he going to do, given that the Government of Saskatchewan is clearly going against the law of the court, the regulations of this government and has also caused an environmental review panel to quit? Is the minister going to revoke the licence? Is the minister going to get the $8 million back that he has given to Saskatchewan for this project?


Robert René de Cotret: Mr. Speaker, I made it very clear last week that we were going to suspend all additional payments to the Government of Saskatchewan, and that we were going to try and reach an agreement in line with the court's ruling, and that meanwhile, the $8 million dollars which had already been paid were frozen until we reached an agreement that would respect the Federal Court judgment handed down in 1989.


Audrey Marlene McLaughlin: Mr. Speaker, my supplementary question is directed to the Prime Minister. Clearly the environmental review approach the government has taken is not working and clearly we have seen what has happened with the projected studies on Baie James, Hibernia, and, today, the Alcan project in Kemano, B.C. It seems that under the government's environmental policy there are more exemptions to the environmental guidelines that are handed out than there are Senate seats handed out.
Is the Prime Minister going to be serious about environmental review to show that his government intends to have clear environmental reviews of every large project in Canada, take his responsibility, and, instead of bringing in a weak bill such as Bill C-78, bring in a piece of legislation with real teeth so we can have real environmental reviews in this country?


Robert René de Cotret: Mr. Speaker, the hon. member raises questions about Baie James and Hibernia. I can tell her that the Hibernia project went through a full review process with public hearings and it was conducted exactly as was set out in the guidelines order. I can also tell my hon. colleague that with Baie James, or Grande Baleine, the agreement that we have with the province of Quebec is for the project to have a full environmental review before any construction is allowed to go on.
In terms of Bill C-78, it widens the mandate allowed to FEARO at the moment to ensure exactly what she is claiming: that all projects, all policies, and all programs be reviewed, keeping in mind the basic principles of environmental review. Even the Dutch, who have or are perceived to have the most advanced legal system in the world, are saying that Bill C-78 is way ahead of anything else in any industrialized country.


Marlene Catterall: Mr. Speaker, I am pleased to have an opportunity to ask a supplementary question of the minister. Allowing this dam to go ahead flies in the face of three court decisions and every public statement the minister has made on this project or on the environment. Once again the government talks and fails to act when action is needed.
I ask the minister again, what does he know about the contracts for Alameda project, a project which he told this House on Friday could not proceed?


Robert René de Cotret: Mr. Speaker, I can answer that very quickly. The Alameda project can only proceed if we go through the procedures set out by the court. We will respect the court order. I will not, and this government will not, be held in contempt of court.


Hon. Lloyd Axworthy (Winnipeg South Centre):: Mr. Speaker, I would like to ask a question of the same minister. The issue is not whether the federal government will observe the court order. It is a fact the Government of Saskatchewan refuses to follow the court order, and the federal government is doing nothing to stop the Government of Saskatchewan.
We want to know specifically, is the Government of Canada prepared today to revoke the licence, to take the Government of Saskatchewan to court, and to get an injunction so that construction will stop and the credibility and legitimacy of environmental review will stand firm

and strong in this country, rather than quisling out like he is doing right now?


Robert René de Cotret: Mr. Speaker, the government is prepared to take all the steps required to make sure that we are following the court order that was issued. That is, I believe, what I have said all along today.


Lloyd Axworthy: The
minister has just said he is prepared to take all steps necessary. The step that is clearly there-and he has had a whole weekend to consult with his legal advisers-is to revoke the licence.
I want to ask the minister a specific question. The Government of Saskatchewan refuses to acknowledge the responsibility of the court. It claims the minister is party to an agreement on September 5. Will the minister undertake to revoke the licence, stop the construction, put a review panel in place, and get a proper assessment to defend the interests of the country and of the environment?


Robert René de Cotret: Mr. Speaker, this minister and this government are willing to stand by the court order. I can assure you that we will make sure that the full assessment of the project is done. We are at the moment looking at the appointment of a new panel. We are in consultation with the Government of Saskatchewan.
There is no way that we will allow this project to go ahead without due process and due respect for the court order.


AGRICULTURE
Mr. David D. Stupich (Nanaimo-Cowichan):: Mr. Speaker, during the current GATT negotiations Canada has offered to give up 5 per cent of its dairy production in favour of U.S. and European imports. The dairy farmers of Canada have warned today of disastrous consequences for the industry of any decision which jeopardizes our supply management system.
Would the Minister of Agriculture tell us why have we signalled to the U.S. and Europeans our willingness to start the process of dismantling the marketing system in Canada? What commitments have the Europeans and Americans offered?
Oral Questions
Hon. John C. Crosbie (Minister for International
Trade): Mr. Speaker, obviously the hon. member is not well briefed on the situation because we have not offered to give away anything. We have made an offer-


Leslie Gordon Benjamin: It's because you have been taken away. You're going to lay down.


Mr. Crosbie:: Somebody else replaced me as minister and is answering the question, Mr. Speaker.


Some hon. members:: Oh, oh.


John Carnell Crosbie: A loud applause, I might add.
We have made an offer in Geneva in connection with agriculture. It is a little complicated to deal with in detail right now. It is an initial offer and it is conditional on other countries agreeing to negotiate a substantial agricultural trade reform package with concrete benefits for Canadian agriculture.
That is what it is. We are not offering to give away anything. We have made it very clear, as we have since March, and in fact long before that, that the continuance of the Canadian supply management system is to be assured and we want a strengthened Article ll(2)(a), all of which is set out in our offer. Of course, the offer also requires the United States and other countries to make concessions on their part, for example, doing away with the waiver which they have enjoyed now for many years in connection with agricultural products.


David Stupich: Mr. Speaker, I had hoped to hear from the Minister of Agriculture, because the Minister for International Trade is the one who bargained away the west coast fisheries, a billion dollar industry, and gave the Americans total control. He is also involved in $3 billion to give the Americans access to oil off Newfoundland. We are talking now about a $7 billion industry, the dairy industry in Canada, and this person is in charge of it. What hope is there, Mr. Speaker?
Is the Minister of Agriculture prepared to assure Canadian farmers that he will not sell them out the way his government sold out the fish processing industry in British Columbia during a different round of trade negotiations?


Hon. Don Mazankowski (Deputy Prime Minister, President of the Privy Council and Minister of Agriculture):: Mr. Speaker, I want to make this very clear to the hon. member. I am sure he knows that the position that Canada has adopted has been taken in full consultation with the various sectors of the agriculture community

October 15, 1990
Oral Questions
and with the respective provincial governments across the land.
If the hon. member would care to look at the document that was put out by the Dairy Farmers of Canada, which outlines the GATT negotiations, and explains it in a very thorough and objective manner, I am sure he would be interested in noting that it states, and I quote: "Dairy Farmers of Canada supports the thrust of the Canadian proposal for a strengthened Article 11". That is precisely what we have done.


Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, my question is also directed to the Minister of Agriculture. As was mentioned earlier, today the government tabled its position at GATT, as a result of which imports of dairy products will double and subsidies will be cut by 50 per cent. I want to ask the Minister of Agriculture, specifically, why is he letting his government sacrifice our quota system? Why does he insist on repeating the damage he did in the Free Trade Agreement?


Donald Frank Mazankowski: Mr. Speaker, what the hon. member should know, I am sure he does-and he should state so, if he does-is that the current Article 11, in its present form, is not satisfactory and what the dairy farmers of Canada petitioned the Government of Canada to do was to put forth a proposal that would strengthen and clarify Article 11. That is precisely what we have done and that is why they support us.


Hon. Ralph Ferguson (Lambton-Middlesex):: Mr. Speaker, my question is directed to the Minister for International Trade. Under the Canadian position tabled at GATT this morning the amount of poultry meat being allowed into the country is the same as provided for under the Canada-U.S. Free Trade Agreement. There will be 19 different types of "further processed poultry" allowed into the country under this proposal.
Why have these turkeys tabled a position that will effectively wipe out the "further processed poultry" industry and force hundreds of processors and hundreds of farmers out of business in the country?


John Carnell Crosbie: Mr. Speaker, why is it that hon. members opposite chicken out whenever GATT negotiations are discussed?


Some hon. members:: Hear, hear.


John Carnell Crosbie: Our import controls for poultry products have been implemented on an historical, proportional, basis in conformity with Article 11. Therefore, our offer under a clarified Article 11-and the hon. gentleman needs to have his own thinking clarified, of course- would not require any further increases. Now what is he complaining about?


Mr. Bob Speller (Haldimand-Norfolk):: After the next election, Mr. Speaker, it will be his Tory goose that will be cooked.
The minister is taking close to $500 million out of the pockets of Canadian dairy farmers. How does the minister expect Canadian dairy farmers to survive, if he does this? Is the minister not signalling the death of the Canadian supply managed industry?
Hon. John C. Crosbie (Minister for International
TVade): Mr. Speaker, I have some difficulty in answering the question, since I did not quite understand the nature of the hon. gentleman's alarm. That he was alarmed was certainly apparent, but about what, was not.


Robert (Bob) Speller: Mr. Speaker, Canadian farmers feel betrayed by the government. The minister promised Canadian farmers access to the American market in the free trade agreement; this promise was broken. Now the minister is promising, again, access to the American market.
Will the Minister of Agriculture make a commitment in the House today not to sign any agreement that weakens Article 11 or that does not give equal access for Canadian farmers to the American market?


John Carnell Crosbie: Mr. Speaker, on October 1, we had to file at Geneva, together with other countries involved in this negotiation, an estimate of the costs of various programs in effect in Canada to assist agriculture. The total was
October 15, 1990

$8.8 billion. The Minister of Agriculture should be ashamed at the amount of assistance he is giving Canadian farmers. It is a huge amount of assistance.


Some hon. members:: Oh. oh.


Some hon. members:: Hear, hear.


WAR MEASURES ACT
Ian Gardiner Waddell: Mr. Speaker, my question is directed to the Prime Minister. This week marks the twentieth anniversary of the vote in the House of Commons on the War Measures Act. After consideration, this Parliament and this Government abolished the War Measures Act and replaced it with the Emergency Measures Act, which protects civil liberties and imposes strict parliamentary control. Why didn't the government invoke the Emergency Measures Act this year, when it called in the army once again in Quebec, at Oka and Chateauguay?


Right Hon. Brian Mulroney (Prime Minister):: The
Government of Quebec invoked a specific provision of legislation that applies to such circumtances, not the Emergency Measures Act. And that is why this government-


An hon. member:: It's another act.


Martin Brian Mulroney: Of course, it's another act altogether.
My hon. friend knows perfectly well that we introduced a number of major amendments in order to completely overhaul the War Measures Act, because we as a government, with a number of opposition members, felt that what happened in 1970 was both disastrous and unjust, and we did not want this to be repeated.


Ian Gardiner Waddell: Mr. Speaker, the Prime Minister is partly right. But 20 years after the FLQ crisis, the army is once again in Quebec, and this time we do not even have a parliamentary vote. Surely that is a step backward as far as civil liberties are concerned. As a supplementary question, I want to ask the Prime Minister if he will ask the government of Quebec for an early report-as early as possible-on the events at Oka and Chateauguay and will the Prime
Oral Questions
Minister undertake to table that report in this House of Commons, whose job, we feel, is still at the toughest moments to protect the civil liberties of all Canadians.


Martin Brian Mulroney: Mr. Speaker, my hon. friend surprises me because the first part of his question in regard to the War Measures Act is extremely valid and is one that I think I responded to on an earlier occasion:
My hon. friend knows that all provinces are entitled under the National Defence Act to call upon the Armed Forces of Canada to come to the aid of the civil power in the provinces in certain objective circumstances.
The government of the province of Quebec, as it happened, asked under the National Defence Act for the assistance of the army of Canada in a particular circumstance this summer. The Armed Forces, having been satisfied that the criteria were fulfilled, went to Quebec to fulfil that mandate, and did so with admirable restraint and commendable success. I know my hon. friend will join with me at this moment in conveying our congratulations to all members of the military for their tremendous job.


INDIAN AFFAIRS
Guy St-Julien: Mr. Speaker, my question is directed to the Minister of Indian Affairs and Northern Development.
Since September 1989, the Algonquins of Barriere Lake in Abitibi have been making representations with a view to joining the Government of Quebec and the Government of Canada in drafting and adopting a conservation strategy for the environment in the La Verendrye wildlife preserve.
Mr. Speaker, my question is this: Is the minister prepared to sign a tripartite agreement with the Barriere Lake Algonquins and the Government of Quebec, that would prevent clearcutting in the preserve?


Hon. Thomas Siddon (Minister of Indian Affairs and Northern Development):: Mr. Speaker, I know that the hon. member for Abitibi is extremely concerned that the

October 15, 1990
Oral Questions
future of the La Verendrye Wildlife Reserve be secured by way of a strategic conservation plan.
The federal government is certainly willing to sign such a plan to ensure that forest activities in this wildlife reserve are properly integrated with all of the other important environmental values, especially those which have been raised by the Algonquin Indians of the Barrier Lake region.
When that plan is agreed to between the government of Quebec and Canada with the Algonquin people, we certainly intend to sign it.


HOUSING
Mr. Joe Fontana (London East):: Mr. Speaker, my question is to the Minister of Finance. Statistics released last Tuesday, and again today, proved that there is a housing crisis in this country.
Starts in Canada have plunged to their lowest levels in six years. Sales are down 30 per cent and 128,000 jobs have been lost thus far, with more to come in 1991 because of the high interest rates and the inflationary effects of the GST.
I want to ask the Minister of Finance: Is it this government's policy to decimate the home building industry in this country with its high interest rate policy and a new tax on housing?


Michael Holcombe Wilson: Mr. Speaker, the simple answer to that question is no.
Over the course of the last six years, we have seen a record level of housing starts. This has been as a result of the policies that have been followed by this government of getting interest rates down and ensuring that there is a strong level of confidence.
As my hon. friend knows full well, what happened in his community of London, as well as in other communities in southern Ontario, is that things got overblown. We got house prices that were out of sight. They were house prices that bore no relationship to reality.
That is what happens when inflationary pressures get out of control. It is precisely for that reason that we have been following the policies of letting inflationary pressure get under control and getting back to a little bit of reality in the housing market.
In all these things, there is a pendulum that goes too far the other way. That is the position that we are in right now. As we get through this period, as we get interest rates down further, I am absolutely convinced that there will be a good rebound in housing starts in London and in other parts of Canada.


Joseph Frank (Joe) Fontana: Mr. Speaker, the minister can try throwing that kind of bunk around here, but it is not working out in the streets in this country.
CREA says today: "High interest rates and the stagnant national economy have forced many would be owners to abandon their purchasing decisions now under present conditions."
I want to ask this minister again: How much more pain and misery is this government prepared to inflict on home buyers and on people who need housing before it does something about it? When and where will this government do something for housing and for people in this country?


Michael Holcombe Wilson: Mr. Speaker, my hon. friend talks about would be house buyers.
Many would be house buyers were speaking to me a while ago saying: "Prices are out of sight. There is no way I can ever consider buying-"


Ms. Copps:: That is in Rosedale.


Michael Holcombe Wilson: That is in Hamilton. It is in London and Kitchener that we are having problems with prices getting too high. That is the natural result of the inflationary pressures that we have been going through in the last three years.
Surely my hon. friend will understand that it is important that we do not let this get out of hand. As I just pointed out, it is getting out of hand in Great Britain with 10.9 per cent inflation. I remind my hon. friend that we had 13 per cent inflation in this country in 1982 after inflationary pressures got out of hand. That is precisely what we are trying to avoid in this country.
In recent months, we have seen where the mortgage rates have gone down from the middle 14 per cent range to the middle 13 per cent range. As we get these

pressures further under control, we will be able to see those interest rates come down further.


THE ECONOMY
Hon. Roy MacLaren (Etobicoke North):: Mr. Speaker, the Minister of Finance in a rather ill advised moment said: "You can't go to heaven without dying."
The Canadian economy is suffering from self-inflicted wounds and not wounds caused by international pressures, as was the case as he knows very well in 1980-81.
My question to the minister is: Why is this government so obsessed with its discredited monetary policy, its high interest rate policy? Why has it chosen to control inflation by stifling demand rather than acting vigorously to promote productivity and Canada's international competitiveness?


Michael Holcombe Wilson: Mr. Speaker, we have heard some veiy self-righteous questions from the members opposite. I include the Leader of the Opposition when I say this.
Back on February 7,1980,1 am sure he will recall when he, Morty Shulman and I were sitting in a television studio and on City Television Mr. Shulman said to Mr. Gray: "Would you lower interest rates?" There was a very resounding: "Yes, I would." "Would you be prepared to resign your seat if the government did not carry through on that policy?" "Yes, I would".
That was on February 7 when interest rates were 14 per cent. They hit a peak of 21.24 per cent, and my hon. friend, the Leader of the Opposition, sat there in his seat in the House of Commons, it did not bother him one little bit that he had made this statement and in a self-righteous way he still stands up and says he knows everything.


Roy MacLaren: Mr. Speaker, I do not know whether the Minister of Finance regards that as an answer to a question. He spent a whole lot of his time talking about things that happened 10 years ago. People want to know what the government is doing today.
The Prime Minister says he intentionally induces economic slowdown. The Minister for International Trade says that Canada is doing too much for its farmers.
Oral Questions
The people of Canada want to know how the government intends to get out of this mess in which it has placed Canada, not what happened 10 years ago.
The Economic Council of Canada is perfectly clear on what is wrong. It knows, as all Canadians know, that the problems today have been induced by the government through fighting inflation with only monetary restraint. When will it shift to a policy of growth and productivity and international competitiveness?


Michael Holcombe Wilson: Mr. Speaker, the hon. member likes to refer to the Economic Council. The Economic Council refers to a scenario that says if we brought rates down to what our February budget had expected them to be, the result would be a combination of economic growth and a wiping out of the deficit by 1995. It points out a dark side would be an inflation rate that would be disruptive, causing a return to monetary restraint in the mid-1990s. In short, this is a flight plan for a roller-coaster ride. It is precisely that flight plan that we are trying to smooth out so that we can have the inflationary pressures kept under control today, so we do not have the boom-bust that we had in 1981-82 and save people the anguish they endured at that time.
That is the policy of this government and, as we see inflationary pressures come down further, we will be able to get interest rates down further and lead to the strong competitive position that both my hon. friend and I want to get. The difference between the two of us is that our way is going to work. His way would not work.


THE ENVIRONMENT
Mr. Simon de Jong (Regina-Qu'Appelle):: Mr. Speaker, my question is directed to the Minister of the Environment. The Federal Court decision of December 1989 stated, and in fact ordered, the federal government to revoke the licence to the province of Saskatchewan for the Rafferty-Alameda project unless there was an agreement reached with the province of Saskatchewan that would stop all construction other than that for safety reasons until there was an environmental review held and reported.


Some hon. members:: Order.

October 15, 1990
Point of Order


Simon Leendert de Jong: The province of Saskatchewan has ignored the conditions of the original licence. It has broken the agreement. The panel has resigned. As things stand now, this government and the Minister of the Environment are in defiance of the court order with every day that passes.
My question to the minister is this.


Some hon. members:: Oh, oh.


Simon Leendert de Jong: Mr. Speaker, if you could calm them down.


Mr. Speaker:: It would probably help if the hon. member would put his question.


Simon Leendert de Jong: My question to the minister is this. Why does he not revoke the licence and then attempt to negotiate an agreement with Saskatchewan that would allow a proper environmental review to occur? Why does he not first revoke the licence?


Robert René de Cotret: Mr. Speaker, as I have mentioned before, I fully intend and this government fully intends to live by the intent and the wording of the court order. We will do exactly that. We will respect the court. There is no question that could be raised about that issue.


Gregory Francis Thompson: Mr. Speaker, my question is for the Minister for International Trade and has to do with the recent increases levied by the United States government on Canadian exports.
The minister will know that as of October first changes to the merchandising processing fees were brought about in the U.S., which has been a great imposition on our exporters to the U.S. In some cases these fees have been increased by 500 per cent. In other instances fees have been levied where there have never been fees in the past.
Are these fees consistent with the GATT? Are they consistent with the FTA? If they are not, what can we as a government do about it?
Hon. John C. Crosbie (Minister for International
Trade): Mr. Speaker, the hon. gentleman asks one of the few rational questions that I have heard in this Question Period.
With respect to his question, we have made protests to the Congress and to the U.S. administration. The hon. gentleman will be glad to know that the free trade agreement provides for the staged elimination of these user fees within five years. The first reduction was implemented on January 1,1990. While this is unfair and we believe totally unjustified, as a result of our negotiations of the FTA these charges will all disappear over the next four years.
I would like to congratulate the Prime Minister on his foresight in connection with this matter.


POINT OF ORDER
Ian Gardiner Waddell: Mr. Speaker, last April, along with other members of this House, I was a member of a delegation, the Association intemationale de parlementaire de langue francaise.
We went to Egypt and met with Mr. Rifaat Mahgoub, who was the Speaker of the Egyptian Parliament. He was assassinated last week. I recall at the time with the other members of the Canadian delegation when the Speaker met with us that he alerted us to the dangers of extremism in the Middle East.
I would like to express on my own behalf, and I think speaking for many of the other members of the House, our deepest regrets to the Government of Egypt and to the people and the Parliament of Egypt on this sad occasion.
Right Hon. Joe Clark (Secretary of State for External
Affairs): Mr. Speaker, on behalf of the government, and I am sure on behalf of all of the House, I would want to associate myself with the comment and sympathy raised by hon. friend.
I have had the opportunity to communicate the profound regret of Canada to my colleague, Abdul Mequid, the foreign minister of Egypt.
This is another indication of a cycle of violence in that region which we all hope can be brought to an end. Many of us who had the opportunity of meeting the former

Routine Proceedings
Speaker understand personally the shock of that tragedy that has been sent throughout Egypt and that has sobered all of us as to the importance of finding an early solution to the tensions in that region.


Lloyd Axworthy: Mr. Speaker, I would like to associate myself with the remarks of the right hon. member. It was an important statement to make on behalf of this Parliament and on behalf of the Canadian people. We would also like to be associated with the remarks sent by the Secretary of State for External Affairs to the Government of Egypt.
Clearly this is something that every Canadian finds repugnant, as it brings home more clearly that politics is an uncertain business in Canada and is a dangerous business in other parts of the world.
We recognize that for many of the people who take on public office in that region it is a matter of enormous commitment and of some real risk. We hope that some solution can be found to these perilous times in that very difficult region. We hope that this event, if there is anything to come out of it, might provide some reminder of just how important it is that peace be found.



ROUTINE PROCEEDINGS


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


PRIVILEGES AND ELECTIONS
Mr. Peter Milliken (Kingston and the Islands):: Mr. Speaker, I have the honour to present the Seventeenth Report of the Standing Committee on Privileges and Elections concerning Private Members' Business.
Pursuant to Standing Order 92, the report is now deemed to have been adopted.
[Editor's Note: See today's Votes and Proceedings.]


INCOME TAX ACT
Svend Johannes Robinson: for leave to introduce Bill C-336, an act to amend the Income Tax Act (tuition credit).
He said: Mr. Speaker, the purpose of this bill is to restrict the availability of the tuition credit in relation to educational institutions providing courses at a post-secondary school level by ensuring that such a tax credit shall only apply where the taxpayers are enrolled in one or more courses at a post-secondary school level.
The effect of this private member's bill will be to close a rather gaping loophole in the Income Tax Act which currently allows people to claim income tax credits for tuition fees at institutions, including private schools, in circumstances which were never intended by the drafters of the act.
I would hope that the Minister of Finance might be prepared to examine this private member's bill and to have the House move forward on it in the very near future.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.
[Stage Direction]
October 15, 1990
Routine Proceedings PETITIONS

Mr. Fred J. Mifflin (Bonavista-Trinity-Conception):: Mr. Speaker, I rise to present a petition, in accordance with Standing Order 36, which has been duly certified by the clerk. It is from 35 of my constituents from the area of Catalina, Bonavista, Port Union, Little Catalina, Melrose, and Elliston.
This petition is concerned about the extra four weeks that people in Newfoundland have to qualify for unemployment insurance. They are very concerned that they will not qualify as the rule stands right now.
I have well over 3,000 in my riding who are concerned about this matter. I was in Catalina and Bonavista this past weekend and the number of people who came to me was well in advance of the 35 who have signed here.
They are concerned that the unemployment rate in Newfoundland is of the highest order in the country. They humbly pray that the variable entrance requirements will be introduced, which would reduce their qualifying time for UIC from 14 weeks to 10 weeks.


CANADA POST
Mr. Rey Pagtakhan (Winnipeg North):: Mr. Speaker, I rise today, under Standing Order 36, to present a petition signed by 1,784 residents of Winnipeg North. The petitioners object to the closure of postal services at the Chapman Pharmacy. They point out that the Chapman Pharmacy is conveniently located at a major intersection in Winnipeg, offers optimally convenient hours for residents of the surrounding areas, and has a surrounding community that consists of many seniors and lower-income Canadians who rely heavily on nearby services including the complete range of services provided by this pharmacy.
Moreover, no adequate consultation with this pharmacy was done, and the shortest possible notice was given. Even the month chosen to give notice was one during which the House of Commons was in recess; hence the concerns of the pharmacists and their customers could
not be voiced in Parliament in time. Indeed this postal service outlet has served the community for many decades.
Hence, the petitioners ask Parliament to do all it can in order for the minister responsible for Canada Post Corporation to reconsider the decision taken by this corporation to close postal services at the Chapman Pharmacy, in the interest of fairness to the Chapman Pharmacy and in recognition of the excellent postal services it has rendered to its many customers who stand to suffer should the closure persist. Therefore, the petitioners seek remedy in this House.


CHILDREN'S RIGHTS
Jesse Philip Flis: Mr. Speaker, I too have the honour of presenting petitions on behalf of Canadians, pursuant to Standing Order 36.
The residents of Canada who signed this petition state that the UN Convention on the Rights of the Child protects children's human rights in such key areas as adoption, survival, development, protection of the child's identity, sexual exploitation, neglect, and drug abuse.
The petitioners humbly pray and call upon Parliament to urge strongly the federal government to encourage universal adherence to the UN Convention of the Rights of the Child and prompt an effective implementation of its provisions.
The petitioners ask the federal government to review its legislation and policies for consistency with the convention.


Mr. Hawkes:: Mr. Speaker, I rise on a point of order. On Friday I began a question of privilege on the behaviour of the New Democratic House leader and was asked to come back on Monday to continue that presentation in the expectation that the member would be here.
I see that the member is not here. I would just simply like to confirm with the Chair that I will be allowed to proceed with those arguments when in fact the House leader of the New Democratic Party does arrive in the House and, if that is later this day for some reason, that I would be properly notified by the Table so that I would have an adequate chance to prepare and appear.
October 15, 1990


The Acting Speaker (Mr. DeBlois):: The Chair has taken note of the government Whip's comments.



GOVERNMENT ORDERS


Mr. Douglas Young (Acadie-Bathurst):: That this House condemn this government for planning and
implementing the first ever made-in-Canada recession.
He said: Mr. Speaker, I think it is important to establish from the outset that this govemement planned and implemented a recession whose existence is recognized by practically all Canadians.
In the past few weeks, the minister said repeatedly that in his February Budget he projected data that clearly showed we would be Ain a slowdown-to use the minister's words-that the unemployment rate would increase and that the country's economic growth rate would drop or disappear altogether. This means, Mr. Speaker-and this is very a very important point-that, as we said in our motion, the government indeed planned and implemented this recession.
What Canadians deplore, however, is the fact that the Minister of Finance apparently cannot accept that his planning led to the results desired by this government-a recession, in other words.
Mr. Speaker, I believe that in this debate, it would be important to hear the Minister of Finance agree, once and for all, and this would at least be a start towards solving the problem, that Canada is indeed in a full-fledged recession.
We need only listen to the comments of all partners in our economy. We could ask about inflation in Quebec: what inflation? The Minister of Finance steadfastly refuses to accept there is such a thing, although we are aware of it and its existence has been recognized, for instance, by the Conference Board of Canada, the Mouvement Desjardins, the National Bank of Canada and a wide range of representatives from the business
Supply
community, labour, consumers and by Canadians in general.

Mr. Speaker, what we believe Canadians are more concerned about than anything else at this point, recognizing that there is very little that individual Canadians and even corporations can do about the recession in which we find ourselves, is the refusal of the minister to recognize the fact that we are, in fact, in a recession and, as our motion states, it is a made-in-Canada recession.
I listened with great interest to the comments of the Minister of Finance during Question Period, when he said such things as "cast your mind back to 1981-82" and commented on the high rates of interest and the high rates of inflation that Canada was experiencing at that time.
The Minister of Finance knows well that it was a phenomenon that was rampant throughout the western world. We had situations in the United States and in western Europe where inflation and interest rates were going through the roof.
The Minister of Finance pointed out to the Leader of the Opposition that there was a discrepancy in the position taken by the Leader of the Opposition, in his capacity then as a member of the government, and what he is saying now. I would like to point out that it is awful dangerous, as I am sure the Minister of Finance is aware, to comment on what was said 10 years ago, when the Minister of Finance was occupying a somewhat different position himself at that point in time.


Michael Holcombe Wilson: But I did not make that type of comment.


M. Douglas Young: Let me quote the Minister of Finance in 1984. He said this: "What we remember most about that period", speaking about the early eighties, "is the fact that interest rates were far higher than they should have been. Interest rates skyrocketed during that period to between 22 per cent and 25 per cent. The reason was largely because of what went on in the United States and the very high interest rate policy followed there".
Mr. Speaker, this is what Canadians are getting extremely upset about. It is that we do not seem, as politicians, regardless of which side of the House we sit on, to remember what we said not all that long ago. We are very quick to point out some conflicts perhaps in

October 15, 1990
Supply
positions taken by members of the Opposition but very slow to accept what the Minister of Finance and others were saying at that point.
In that same speech in this place, in 1984, the Minister of Finance, speaking then as the financial critic for the Opposition, stated that the 1981 budget raised taxes just at the point when the economy was falling into recession and we should have been reducing taxes.
I wonder what the Minister of Finance thinks about that formula now, as he continues to berate the Senate for being very careful about the implementation of the goods and services tax. Most observers recognize it will take a pretty substantial amount of money out of the Canadian economy at a time when we are going to be in a recession.
The Minister of Finance says we are wrong. I listen to him in this House and in his speeches in Edmonton and other places, when he suggests that the GST bill must come out of the Senate because it is fundamental to his deficit-reduction program and it is fundamental to the government's revenue-generation plan.
Again, relating to the comments made by the Minister of Finance when he was finance critic in 1984, referring to the recession that we had experienced in the early eighties, he said: "We were helpless, as we watched the United States rates climb higher and higher. Canadian rates followed".
Mr. Speaker, that is the point. Canadian rates are not following now, Canadian rates are four and five points above the American base rate. It is an historical situation to see that much of a margin between Canadian and American rates. Yet, the Minister of Finance insists on casting our minds back-he talks about dying before we get to heaven, and so forth-and asks the question as to why the members of the Opposition support the Senate in its fight against the goods and services tax.
I want to point out to the Minister of Finance that the reason Canadians and members of the opposition support the Senate in this fight against the goods and services tax is because they know the senators who are fighting the tax are right. It is not very complicated.
It is one thing to be selective and to suggest that big brother is right and they are always correct, when in fact, if we go back to the budget wherein the minister set out
his pattern that could lead into a recession, because he was half right, he said that unemployment would go up and growth would slow or else disappear. But he also said that interest rates were going to come down significantly and would average on the calendar year 11.1 per cent.
We were dead wrong on that. As everybody in the country knows, interest rates over this year will be significantly higher than what was projected in the budget.
One could think that perhaps the opposition is guilty of overstating the case, that after five years-because the Minister of Finance celebrated his anniversary in Edmonton, I understand when he made his speech on September 17, and it was six years-you would think, Mr. Speaker, that after six years, the minister would recognize that even friends of the government, people who were extremely vocal in 1988 with respect to the government's performance to that point and what they had projected for free trade, had come out and stated that they are concerned about the economic mismanagement. This is not the Liberal Party of Canada talking about what is happening to our economy.
I quote from the joint statement on the national economy made October 11 by the Canadian Manufacturers' Association, the Canadian Chamber of Commerce and the Business Council on National Issues. They state, "We wish to underline the growing concern within the Canadian business community that domestic macroeconomic mismanagement, persistent fiscal laxity and a failure to come to grips with the magnitude of the competitiveness challenge confronting Canadian industry are steadily undermining Canadians' economic prospects".
We could go on at length and join the chorus of boos across the country with respect to the government's performance on the economy, but I do not think that that serves any useful purpose because it has all been said. Canadians are aware that when people are confronted with problems in their personal life, in their business life, whatever the case might be, the first step toward trying to correct the difficulty or the problem is to recognize it.
I believe that what Canadians want from the Minister of Finance and from the Prime Minister are not statements that this economic slowdown is healthy or that

things are going according to plan. They want to knows specifically first of all, does the government recognize that the kinds of projections that are involved in budget documents, and the kinds of assessments that are made in speeches on the state of the Canadian economy do not reflect the human suffering that is going on in the country, when bankruptcies are at very, very high levels across the country, when unemployment is increasing, when housing starts are down and people generally are discouraged. It is not just the fact that they are faced with that we are in a recession, it is the seeming inability of the government to understand the depth of the problem.
I hope, as we pursue this debate today, that we will have provided the Minister of Finance with an opportunity to discuss the interest policy, to tell us why in 1990 we should be leading the way for Americans in showing them where they can invest their money at extremely high levels of interest, why we are killing our export industry. We talk on the one hand about correcting the difficulty with the manufacturers' sales tax, when in fact the high value of the Canadian dollar is doing more damage to Canadian exports than the FST or the MST has ever done, even taking into account that the government has increased the federal sales tax from 9 to 13.5 per cent in the five and half to six years they have been in power.
I hope we will be able to hear from the Minister of Finance today. What Canadians are looking for is first, does the government and the Prime Minister and the Minister of Finance accept the fact that we are in a real recession. It is not a question of technical recession. Looking at the number of jobs that we are losing across the country and the increasing rate of unemployment, can we get a clear, categorical statement from the government, through the Minister of Finance, that yes, we are in a recession. Then can we begin to deal with it in the life of that reality.
The difficulty of trying to deal with any problem in Canada as a politician today is a major challenge. We have heard a great deal of what is going on in the other place. I know that the Minister of Finance and other members of government on a regular basis discuss the bills that are before the members of the other place.
Supply
They ask Canadians to try and force the issue to make sure the goods and services tax passes.
When we went across the country with the Standing Committee on Finance of the House of Commons, we met many people who, in various ways, were very calm, logical and rational in their presentations. Others were extremely upset and very aggressive in their rejection of the goods and services tax. I am sure the same experience occurred for members of the Senate when they went across the country and met with Canadians in discussing the goods and services tax.
To put things in perspective, when people are facing a made-in-Canada recession-most of the time we like to have little stickers on things saying, made in Canada, we are proud of it, we have put the red flag on it and we have logos to indicate that particular products are made in Canada. I do not think anyone is very proud of the fact that we have a made-in-Canada recession.
People are frustrated as we enter this recession. Many sectors of the economy and parts of the country have been in a recession for some time. It is not something that happened last week when the Conference Board of Canada came out with its report. I see headlines in the press over the weekend saying: "Racket emanates at anti-GST rally" and noisemakers and so on. Although some people have had some reservations about some of the approaches taken by senators at specific times in their fight against the GST, I believe that in the context of what people have to face in the real world, they understand the frustration of the senators.
On the weekend I had the occasion to speak with literally hundreds of people. Not one person said, "Tell the senators to pass the GST." Some people had some comments about some of the goings on in the other place but no one said, "Make sure when you get back to Ottawa that you tell those people in the other place to pass the goods and services tax." One of the things we have to understand is that the members of the Liberal Party who sit in the Senate are very much aware that what they had done in that place will in fact require that Senate reform take place.
People are focusing on the Senate and need for reform in the Senate. I would hope that a lot of Canadians would focus on the need to reform the institutions of Parliament, including the House of Commons. It is nearly unfathomable that we would sit in this place and

October 15, 1990
Supply
be going back to our constituencies on the weekends and spending time through the summer and being in contact with our constituents through our offices, that members on the government side, as a block, would support the goods and services tax as we move deeper into a recession.
It seems to me that there has to be new mechanisms put in place to allow for members of Parliament to speak their minds on issues that are important to their constituents. Although there may be frustration with some of the parliamentary procedures, there is far more frustration for people who do not reflect the views of their constituents.
I would hope as we go through this debate that we will hear from the Minister of Finance. One of the things that many people have understood about this government is that it has reacted many times to polling and has made decisions on the basis of how it perceives Canadian public opinion to be responding on a certain issue.
There is no doubt that it has given up the battle on this. There is not question as it relates to the goods and services tax or management of the economy in general, that the government has taken the John Paul Jones approach of damn the torpedoes and full speed ahead, and we are going to do it regardless.
I know the Minister of Finance has held that office almost longer than any finance minister in the history of this country. Whether or not he has decided to go down with the ship is something we are going to learn in the very near future. It is important for Canadians to feel that the Minister of Finance understands their problems. Second, it is important for Canadians to believe that the Minister of Finance and the government will respond to those problems. We believe that the government has to bring in a revised budget, if not a new budget, a mini budget, a new statement. The September 17 statement in Edmonton recognized some of the changes that have occurred in our economy. But the fact is that the projections in the budget the minister brought in in February are completely off base because so much of it is now proven to be erroneous.
It is no longer a question of speculation on interest rates. It is no longer a question of speculation on the amount of the deficit. We are in a different situation and Canadians believe that they have a right to have the finance minister come in. He does not have to say: "Mea culpa," and beat his chest. He just has to say what Canadians already know, that it has not turned out the way we thought it would, and we believe we now have to change. We have to say to the Governor of the Bank of Canada that there has to be a reduction in interest rates and that he is not moving in a long-term way with enough credibility to be able to force the value of the Canadian dollar down to try to protect our export industries.
The other question I want to draw on before I conclude is the argument by the Minister of Finance and government members that there are no alternatives. When the Minister of Finance came before the Canadian people after the 1984 election, he talked about a long-term plan to stabilize the fiscal situation in the country. He talked about tax reform, deficit reduction, and spending restraint.
We are in a far worse situation now than we were in 1984. The minister can say that relatively speaking, and using the right numbers, there have been some improvements. But the fact of the matter is that the debt is far higher, the cost of servicing the debt is far higher, and interest rates are higher than they have ever been in relation to American rates in terms of the separation between the two. What we need to find out today, or very soon, is if the government is prepared to look at alternatives.
When the minister states that there are no alternatives, surely he understands that it is not within the realm of possibility for ordinary Canadians, or even people who have a lot of expertise in the tax field, to come in with a panacea. The minister has been struggling with it for six years.
Neil Brooks of the University of Toronto came out with an alternative suggestion. Dennis Mills of our party has been working at trying to put forward a simple tax proposal. There is another group at the University of Toronto that recently put forward some proposals to deal with the replacement for the goods and services tax. We are not suggesting that any one of these alternatives is the absolute answer.

What we want to continue to impress on the government and the Canadian people is that the Liberal Party believes the only way to have meaningful and credible tax reform is to deal with it on a massive basis through consideration of what the implications are for provincial governments and municipal governments. There is no simple solution of shifting the burden of taxation from one level of government to the other because the taxpayer is always the same.
We believe this is a made-in-Canada recession and that it was planned and put in place by the government. We hope we will have an opportunity to hear from the Minister of Finance who will recognize that we are now in that recession that the government has planned. What we want to hear is how does he intend to get us out of the recession.


Michael Holcombe Wilson: Mr. Speaker, I was interested in the comments of my hon. friend, who probably could have said them all in 30 seconds because there were absolutely no alternatives there. He referred to some alternatives of other organizations but made a specific point of not endorsing any one of these as the senior finance critic of the Liberal Party.
Why is it that the Liberal Party always shies away from proposing alternatives? Why, when he is critical of the policies we have been following, can he not put forward one or two proposals that might be considered as options? I have never said that I have all the answers. I acknowledge that I do not have all the answers, but I do listen to people and get suggestions of alternatives. We do make adjustments, but I have never had an alternative from the Liberal Party of Canada.
As an example, the hon. member was quite critical of our fiscal record in his comments. Yet, every time we have proposed something to get the deficit down and to reduce spending, the Liberal Party has resisted. It has fought us. It has laid across the tracks. Eveiy time we have come up with something, it has resisted. This makes it much more difficult for us to deal with the problem that he is critical of us not doing a better job on.
Let the hon. member say to me what are the options, what are the alternatives, and what are the things that
Supply
the Liberal Party would put forward as possible things that we can consider.


M. Douglas Young: Mr. Speaker, the point that the minister makes with respect to alternatives and his consultative process are worthwhile.
We were very fortunate last year in the Standing Committee on Finance in the House of Commons to have an unanimous recommendation. The Chairman of the Standing Committee on Finance, the eight Conservative members, the four Liberal members, and the two NDP members all agreed unanimously that interest rates in Canada had to come down. We made that recommendation to the Minister of Finance and to the government.
In addition to that, at the same time, there was a similar recommendation from all the premiers from all the provinces across Canada. Obviously, that recommendation was ignored.
On the question of alternatives, if anyone in the country should be aware of how difficult it is to formulate an alternative, it should be the Minister of Finance. He has been at it for six years. In the opinion of the National Council on Business, the Chamber of Commerce, and, just last week, the CMA, there was mismanagement of the economy by the Minister of Finance and the government with thousands of people at their beck and call to provide some direction and some policy decisions.
What we suggest is that the kind of unilateral nonconsultative approach taken by the government is what has got us into this mess. I believe that the recommendation made by the Mayor of Vancouver, when we had our hearings in his city last year, that there has to be widespread consultation dealing with all three levels of government to avoid the kind of thing that has occurred in the last few months. Just transferring the burden of taxation from one level of government to the other is not the way to go.
The last point I would make is that in the minister's speech in Edmonton on September 17, he stated: "I and my departmental officials have been following carefully and closely what Canadians have been saying during a wide range of consultations and public meetings."
Since that time, we have had all the leading business people in the country, the Labour Congress, the labour

October 15, 1990
Supply
leadership, and sectorial people in all the areas of the economy come forward and say that the Minister of Finance is completely wrong in the approach he is taking.
My goodness, the bottom line is who in the world believes that the minister would listen to the Liberal Party when he is not listening to anybody else in Canada?


Mr. Andre Harvey (Chicoutimi):: Mr. Speaker, it is a pleasure to hear the Liberal Party critic comment on the economy. On the other hand, we also get that uncertain feeling because, as you know, his party almost brought this country to the verge of bankruptcy. Remember that $40 billion deficit in 1984! That was six years ago, Mr. Speaker. Quite an achievement! So today, I would like to take this opportunity to congratulate our Minister of Finance, who is here all the same this afternoon to listen to what Liberal members have to say. It was quite an experience to hear their comments, after seeing those same members vote against Bill C-23, which imposed a minimum tax on the rich. This is incredible, coming from a party that claims to defend the interests of the needy! I may also point out that the same party, both here in the House and the Senate, rose up against Bill C-22 which guaranteed investments totalling $600 million in Quebec, in the field of research. We know how important that is.
Mr. Speaker, I would now like to take this opportunity to ask the hon. member about one particular item, because a few minutes ago, he mentioned transfers to the provinces. I don't mind hearing Liberal members talk about generalities, but I wish he would tell me the rate of increase in federal payments to the provinces since 1984.
And if the hon. member is wrong, I will raise a question of privilege, so my Minister of Finance can inform the House about the rate of increase in transfer payments to the provinces since 1984, and what our new policy is vis-a-vis the provinces.


M. Douglas Young: Mr. Speaker, the hon. member should not be surprised if his constituents raise a question of privilege with respect to his comments. If he claims to speak for Quebec and for his constituents when he asks what this government's policy
is vis-a-vis the provinces, he gives the impression he does not know what is going on.
At this very moment, Mr. Speaker, there are Canadian provinces before the courts who are trying to defend their rights under the Constitution and ensure that transfer levels are maintained.


An hon. member:: He did not talk about that!


André Harvey: Mr. Speaker, my question is quite straightforward. I always like to keep things short and sweet.
I asked the hon. member about the rate of increase in distribution of federal payments to the provinces since 1984. This ratio exists-the hon. member is an expert, as the Liberal Finance critic-so could he simply tell me what the rate of federal transfers to the provinces has been since 1984?


M. Douglas Young: Mr. Speaker, depending on the program, the rate of transfer payments to the provinces is before the courts, because the government, according to some provinces, is not living up to its obligations.
Of course, if the hon. gentleman wants to have the rates on an annual or province-by-province basis, I would be delighted to send him the information if it is not available to him through his minister.
However, Mr. Speaker, I think it would be even more important for the minister to talk to representatives of the Mouvement Desjardins, the National Bank of Canada and the Canadian Chamber of Commerce, and find out what is happening to the economy and what this recession is all about.
Does the hon. member know-does he himself know-we are in a recession, yes or no? That is the question, Mr. Speaker! He asked for a few figures between 1984 and 1990, but one thing is certain-I want to get back to the hon. member's comment that in 1984, there was a deficit of $40 billion. This year, Mr. Speaker, the deficit will be over $30 billion, after six years under the present Minister of Finance.
The question is still the same: do the Minister of Finance and his colleague, the hon. member for Chicoutimi, realize that Quebec, like the rest of Canada, is in a recession? That is the question we are asking today. Do you, as a government and as elected representatives,
October 15, 1990

Supply
realize that the people in your province-entrepreneurs and private citizens-are in a recession?


Mr. Simmons:: Mr. Speaker, I want to thank my friend from Acadie-Bathurst for an excellent presentation. I want to come back to something that the minister put to him a moment ago, because by inference there is a suggestion that should not be overlooked.
The minister made much of my friend having alternatives-


Michael Holcombe Wilson: No, not having alternatives.


Roger Simmons: -made much of the need to have alternatives. I think he will agree that is a fair statement of what he was saying. I am submitting to the House, I say to the minister, that part of his question, part of his comment, was that the member for Acadie-Bathurst ought to have alternatives. Does he agree on that?


Michael Holcombe Wilson: Yes.


Roger Simmons: Yes. I am glad he agrees on that because I want to put a question to my friend from Acadie-Bathurst. He is a man of considerable memory and, although he was not here pre-1984, he was in elected politics and I am sure he has researched the record extremely well.
Can he affirm for the House that the Minister of Finance, who now advocates that he-the member for Acadie-Bathurst-ought to have specific alternatives, espoused the proposed goods and services tax when the minister was in opposition? Can he tell us that that was the case? I am sure it is the case judging by what the minister has said in this Chamber, but can he assure us that it is indeed the case?


The Acting Speaker (Mr. DeBlois):: The period set aside for questions and comments has now expired, unless the House gives unanimous consent.


Some hon. members:: No.


The Acting Speaker (Mr. DeBlois):: Resuming debate. The hon. member for Burin-St. George's. On a point of order?


Roger Simmons: Mr. Speaker, I rise on a point of order. The question was not put to the minister. Point of order.


The Acting Speaker (Mr. DeBlois):: The hon. member for Burin-St. George's, on his point of order, but briefly.


Roger Simmons: Mr. Speaker, I rise on a point of order. I submit that the member for Acadie-Bathurst ought to have an opportunity to answer my question. I had risen at the same time as the gentleman from the backbench and you, Mr. Speaker, recognized two from the same party in succession, which is not the practice in this House.


The Acting Speaker (Mr. DeBlois):: I am sorry but the Standing Orders are quite clear: without unanimous consent, the period for questions and comments is limited to ten minutes. Resuming debate. The Minister of Finance.


Roger Simmons: You can't answer the question.


An hon. member:: He will answer you, don't worry.


Michael Holcombe Wilson: Mr. Speaker, there were two questions-


Roger Simmons: Point of order.


The Acting Speaker (Mr. DeBlois):: The hon. member for Burin-St. George's on a point of order.


Roger Simmons: Mr. Speaker, the tradition in this period of questions and answers is that the member to whom the question was put gets, however brief, enough time to respond, I submit in not allowing him to respond, Mr. Speaker, are not allowing for a fair debate in this Chamber.


The Acting Speaker (Mr. DeBlois):: The Chair has no objection to continuing questions and comments but it must have the unanimous consent of the House. Do I have unanimous consent?


Some hon. members:: No.

October 15, 1990
Supply


The Acting Speaker (Mr. DeBlois):: The hon. Minister of Finance now has the floor.


Michael Holcombe Wilson: Mr. Speaker, I said that I would respond to the two questions. The member for Burin-St. George's asked whether I mentioned the GST in opposition before 1984. No, and I will give the hon. member the reason why. It is because in the previous government, Mr. MacEachen, now Senator MacEachen, authorized a study on sales taxes which came to the government just around the time of the 1984 election.
I would point out to the hon. member that I did talk about it in the 1988 election. It was based on that 1988 election consideration, and all the discussions and consultations that we had beforehand is the justification for the proposal right now.
On the second question my hon. friend in his very cute answers had no alternatives, just vacuous generalities. He was asked about the increase in transfers to the provinces. The answer is 6.1 per cent on average over the last six years and the program spending for the Government of Canada-in other words, its own spending-is 3.7 per cent. So the transfer to the provinces have been considerably greater than what we have spent on all other things in the Government of Canada.
Since 1984, as my hon. friend knows, we have set forward a very clear plan of economic policy for the country. There are three fundamental issues that we have been following here. One is to deal with the nation's finances-the deficit and the debt problem.
My colleague during his comments said that we were backing away from all the major challenges. I do not see how the hon. member for a minute can say that we have backed away from the major challenges of cutting government spending when we have had to deal with difficult issues such as the closing of bases which is close to his part of the country. It has affected places there. VIA Rail has affected his part of the country-very much so. These are decisions that we do not enjoy taking, but we have not backed away from them.
On the one hand, my hon. friend criticizes me for not getting the deficit down, then on the other hand ignores the very difficult and tough decisions that we have taken in getting the deficit down.
The second area of our economic policy is reducing structural barriers, privatization, deregulation, training for people who are out of work, tax reform, both corporate and personal income tax, and now sales tax reform, and finally, getting the problem of inflation under control. We have made some very clear and very tangible progress here.
The cost of running the government today was $100 million less last year in dollars spent-not inflation adjusted dollars but in dollar spent-than in 1984.
I have talked about our record of controlled program spending. In the operating balance, we came from a $16 billion deficit to a $14 billion surplus this year, a $30 billion turnaround.
Our success here has been greater than the United States. We have moved further in a shorter period of time than the United States has in dealing with their deficit problem. So we have seen a made-in-Canada improvement in our control of our fiscal position. We have also seen a made-in-Canada improvement of the economic capacity of the government because of this range of structural policy changes that are equivalent to $30 billion, or equivalent on an ongoing basis annually to the size of the gross provincial product of the province of Manitoba.
We have debated the GST. We have debated it endlessly in this House. That will put our exporters and importers on a level playing field with the international competition, something that will help us generate jobs here in Canada.
The OECD describes a process we have been following in structural reform as substantial and as noteworthy. The Economic Council of Canada review has also commented very positively on what we have been able to do in dealing with these structural issues.
Now, inflation control. Inflation was a problem. It was getting out of control, but we have brought inflation down, for the seventh consecutive month, to 4.1 per cent. We have real challenges here because the pressures are pretty substantial. As I pointed out, in the United Kingdom they were 10.9 per cent last month. That gives some indication of what happens to a country that does not take its inflation problem seriously.
October 15, 1990

From 1984 to 1989 we had a made-in-Canada growth in this country which was second only to that of Japan. A million and a half new jobs were created by Canadian businesses here. Again, a made-in-Canada boom in this country. The growth that we have seen, the second longest period of continuous growth in the post-war period, has resulted in real benefits to the standard of living of Canadians: from 1983 to the present, a 16 per cent improvement in average per capita income, after inflation, after income taxes. That amounts to an $8,000 improvement in the purchasing power of the average Canadian family.
Credit growth was getting out of hand though, Mr. Speaker. We had credit growth. Consumer credit reached a peak of 15 per cent. In June it was still a 10.2 per cent increase, almost double what it was in the United States.
Business credit growth, again 2 percentage points higher than the United States; mortgage credit growth, 16 per cent in the month of June-that is twice the rate of growth of our economy and about two and a half times the rate of mortgage growth in the United States.
Unit labour costs, one of the best measures of our competitive position, which my hon. friend is concerned about and his colleague from Etobicoke North was concerned about earlier in Question Period. We were seeing an increase in our unit labour costs a good deal higher than the United States and about twice as high as the rate of growth in Germany and Japan. So we needed a firm monetary policy to deal with the problem that we have today.
My hon. friend talked about the problems of 1981-82, saying that they were quite different. In Canada they were the same. The economy was growing more quickly than the capacity of the country to handle, it was for that reason that we had to impose the higher interest rate policy in Canada, to deal with this Canadian problem. I make no apologies for that.
What we have done, Mr. Speaker, is to be sensitive. We listened very carefully to what is happening in the economy. I know there are tough times out there. I talked to businesses that are closing. I talked to people who have lost their jobs. I take no satisfaction whatsoever in that. But I do know that if we had ignored this problem, the problems we would have faced in six
Supply
months, nine months, a year, two years down the road would have been far more serious, far more disruptive, far more damaging to the prospects of Canadians than is the case right now. We have this problem under control now to a far greater extent than-again, let me remind you-is the case in Great Britain.
We have had made-in-Canada growth. It developed into a made-in-Canada problem so we imposed a made-in-Canada solution so we can have made-in-Canada strong non-inflationary growth into the future. This is what my hon. friend, my hon. colleague from the Liberal Party is asking for, a policy response and a clear sense of direction to Canadians as to the policies that we are following and where this is going to take us as a country.
What I find very difficult to accept, Mr. Speaker, is the continued allegations on the other side that we could have a reduction in interest rates just by snapping our fingers.
These people should listen to what the Economic Council or what the three business groups that my hon. friend referred to just a minute ago said. They said: "The only way you are going to get interest rates down is to control government spending, not just the Government of Canada, but all governments because all governments are part of this problem." That is a clear message that came out from the business groups last week.
My friend is selectively ignoring these words. He is selectively ignoring the proposals, the prescriptions that these organizations have come up with. They say: "You have to get the deficit down." You cannot just snap your fingers and hope for lower interest rates. Interest rates will only come down if the circumstances are right to support lower interest rates.
This is where I have the greatest difficulty with the policies of the Liberal Party. It says: "Your fiscal policy is wrong. You should have a lower deficit. You should have lower interest rates." Then, what do we hear from them? We just heard the best example.
There was a vacuous, totally empty response when I asked what the alternatives were. What are the things that the opposition parties are suggesting we should do to get the deficit down to allow us to get the interest rates down? There was an empty response, and my hon. friend knows it. I think he is embarrassed about it, but that is what his leadership has told him to do.

October 15, 1990
Supply
I referred to this in Question Period I referred to, and I repeat it again. The Economic Council did come up with a scenario that said if rates were brought down to our February budget level, the result would be a combination of economic growth and a wiping out of the deficit by 1995. They also pointed out a dark side: "That would be an inflation rate that would be disruptive, causing a return to monetary restraint in the mid-1990s. In short, this is a flight plan for a rollercoaster ride." That is the point that I wanted to make.
We know that the economy is in tough shape. We know that people are going through a difficult period here. The key that we have to ask ourselves is: If we had taken the roller-coaster ride that the Economic Council has described, where would we be in one, two, three or five years time? We are determined not to get into that same trap that was fallen into not just by the government here in Canada, but by governments in other parts of the world as well. That is why we are following these policies.
This takes me to where we are now in the life of this Parliament. This government has put forward four pieces of legislation. Bill C-21 is the unemployment insurance bill. It includes a number of elements of unemployment insurance reform, designed to broaden the scope of unemployment insurance at the same time as tightening up on unemployment insurance, and also providing some financing to the Government of Canada to allow it to get its deficit down.
Bill C-28 is a number of income tax measures, including the large corporations tax. Bill C-69 is a bill designed to reduce a number of government spending programs so that all of these together can take real action to get the deficit under control.
In addition, Bill C-62 is designed to stabilize the fiscal position of the Government of Canada. All of these are designed to do precisely what the Economic Council and these business groups have suggested we do, get the deficit down.
In December 1987 we had a report from the senators. Senator MacEachen, Senator Buckwold, the current chairman of the finance committee, and Senator Kirby, all of those gentlemen are fighting these four bills, as well as the GST.
I believe I have seven more minutes, Mr. Speaker. I started at 3.45 p.m.
Those three senators are fighting the GST and these other bills. Those three senators came in with a report in a Liberal dominated committee which says that they recommend that the government scrap the federal sales tax and introduce a multi-stage, broad based sales tax, which is precisely what the goods and services tax is.
This is the hypocrisy that I see in this place when, on the one hand, we have people like my friend opposite saying: "You should do this." Then, on the other hand, he takes all the steps possible to make it extremely difficult if not impossible to do the things that he is precisely requesting that we do.
The Liberal Party ran in the last election and number two on the Liberal Party election platform was: "A Liberal government will not proceed with stage two of the Mulroney government's tax reform plan". That is the sales tax proposal, that is the GST proposal. The Liberal Party said it would not. The Liberal Party was not elected to form the government. The Conservative Party, under the Prime Minister, was elected to form the government.
Now we have a position where the elected government passed a bill in the House of Commons that was part of the Liberals' election platform to defeat and our election platform to pass. We have passed it, with a majority government supported by Canadians in the last election, and now we have not just the Liberal senators but a minority of the senators in the Senate saying: "No, we are going to rise up out of the past, we senators who were appointed by Mr. Trudeau when he was Prime Minister, and we are going to ignore what the people decided on November 21, 1988". They are going to do what that party which was defeated in that same election would do. They say that they are going to kill that tax, in spite of the fact that they were beaten on that platform.
I appeal to my hon. friend and to other members opposite because we have an important problem here, not only a fiscal problem. We have to get these bills passed to be able to deal with the fiscal position of the Government of Canada, and we have a fundamental, democratic problem here.
I just read from the editorial support here. One reads: "Shame on you Liberal senators". There are references to the Senate as an undemocratic anachronism. Others read: "Time for the deadlock clause"; "elected House must show the Senate who's boss"; "the Prime Minister had little choice"; "an abuse of Senate power, embar-

rassing to all Canadians"; "forget the shameful antics, we need the GST"; "surgery needed to save democracy and the GST"; "the games senators play"; "opinion polls no reason for Senate to stall the GST"; "anarchy in the Senate"; "the Liberals should be ashamed of themselves".
I have many, many more of these, but the answer is very clear: It is fundamentally important for the future of parliamentary democracy in this country that we proceed with this legislation that is being blocked in the Senate by the Liberal minority there. It is an important fiscal problem. Those bills are key to the ability of this government to manage the fiscal position of the Government of Canada.
I have not heard members opposite in the House of Commons who sit on the Liberal side saying why they feel in this day and age that we should have an unelected, appointed, unaccountable group of people who are appointed by a previous government. How can they justify that group of people blocking the will of the people as expressed on November 21, 1988 and as expressed in the platform of the Government of Canada?
The Liberals said they would block this if elected, but they were not elected. If we are going to establish a precedent of having a minority of senators blocking this legislation, I ask my colleagues opposite: Where does that leave us as a country? What recourse do the Canadian people have if they want to have a large corporations tax, if they want to have $500 million more in training programs, if they want to have maternity benefits, and if they want to see senior citizens who are earning more than $50,000 contribute toward lowering the deficit by putting back some or all of their Old Age Security? What recourse do Canadians have? They cannot vote out Allan MacEachen. They cannot vote out Michael Kirby. They cannot vote out Sid Buchwold. They have to wait for those gentlemen to reach age 75. That is not the right way.
People have said to me from other countries when I tell them what is going on here: "This is a joke. It is an anachronism. It is 19th century stuff. I thought we got rid of all this. What is going on? What is the GST?" When I explain it to them they say: "That is the same as our
Supply
value added tax. Why are these unelected Liberal senators saying you should not have a tax we have had it for 20 or 25 years?"
This is the challenge that is facing Canadians and this House today. Are we going to pass this legislation which will help us get the fiscal position of the Government of Canada in a stabilized and normalized position? Are Liberal party members opposite going to continue to be held hostage by their colleagues in the Senate who are not elected?


Some hon. members:: Hear, hear.


The Acting Speaker (Mr. DeBlois):: We are now at the
period for questions and comments. I would indicate to the Minister of Finance that the gesture I made five minutes ago was not meant to shorten his time, but simply to draw the attention of the clerks at the table.


M. Douglas Young: Mr. Speaker, first of all, on the question of the goods and services tax that allegedly the government party put forward in the last election, as I recall that proposal, even the minister's own technical documents in August of last year indicated that it would be visible, harmonized, fair, and revenue neutral.
I do not think one Canadian voted for the goods and services tax proposal that the minister has brought forward. We will let Canadians debate that, and I am sure they will whenever they have an opportunity.
I have a simple question for the Minister of Finance. The minister asked about alternatives. I indicated in a reply that I thought that what had been proposed by the Standing Committee on Finance in its report last year was a valid contribution to try to turn things around in this country and avoid the recession we are now in.
I want to ask the Minister of Finance if in his widespread consultation he has done the following or, if he has not done so, if he would consider doing it now? Would the minister take the time, along with his officials, to contact the exporters, the manufacturers in Canada, and ask them this question: "Would you rather have the goods and services tax passed or would you rather have a 75-cent to 80-cent Canadian dollar and interest rates at

October 15, 1990
Supply
11 per cent?" I think it would be very interesting to get an answer to that question.
I believe we have the answer because we have been listening to these people. They will have to choose between the two because they will not be able to have both, in that the GST will cause inflation that will not make it possible to drop the interest rate as much as the minister might like. I think it would be very enlightening to ask the Canadian Manufacturers' Association and to ask the pulp and paper industry and the mining industry if they would rather have a 75-cent to 80-cent dollar with interest rates at 11 per cent or the GST.


Michael Holcombe Wilson: Mr. Speaker, there is another one of the cute little tactics of the senior finance critic of the Liberal Party. It is not an either/or. No one has ever put it and no one should ever put it as an either/or question if they knew what they were talking about.
We are doing the GST for fundamental reasons because the existing tax is broken, and he knows full well it is. He also knows full well that the exporters, manufacturers, and others in this country on whom we depend for a significant number of jobs, need the GST.
The level of the Canadian dollar and our monetary policy are quite separate from whether or not we have the GST. The monetary policy must be there to deal with the inflationary problem that we have been struggling with over the past two and a half to three years.
My hon. friend referred to the finance committee report of about a year ago. At that time mortgage credit was growing at a rate of 17 per cent; consumer credit was growing at a rate of 12 to 14 per cent per annum; and business credit, 11 per cent, for an economy that was growing at a rate of 7 per cent or 8 per cent.
If he is suggesting that it would have been an appropriate, intelligent, prudent policy of the Governor of the Bank of Canada to lower interest rates at the time when credit demand was booming and suggesting that that would not lead to significantly higher inflation, I think that he is dead wrong. That is exactly what would have happened, and that is why we felt it was important.
I remind him that in August 1988 we had a unanimous recommendation from the provincial premiers to reduce interest rates. If we had done that, at this point in time we would be looking at an inflation rate probably closer to what they have in Great Britain at 10.9 per cent than the level of inflation today.
He says that the tax we promised was visible. I do not know how much more visible this tax could be. I wish it were invisible.
Harmonized, I have always said that it was my first preference to have a harmonized tax. We have the province of Quebec harmonizing with us. We have the province of Saskatchewan in discussions. We have other provinces talking about harmonizing.
Is it fair that the GST credit will reduce the amount of taxes paid by families earning less than $30,000? I believe that means a fair tax.
Revenue neutral, we can debate that one until the cows come home. I have stated very clearly what the position of the Government of Canada is and I stand by that.


Sheila Maureen Copps: Mr. Speaker, my question for the minister is in reference to his claim that only the Liberal opposition seems to be opposed to this insidious measure.
He will no doubt be aware that one of his colleagues stated recently in the newspaper that he had consider crossing the floor on the issue of the GST. I would like to just read a quote into the record: "Our office has never received as many calls and letters nor have I had as many comments burning my ears off about a whole series of issues. While constituents are unhappy about everything from free trade to the Oka crisis, Meech Lake, Prime Minister Brian Mulroney's leadership and recent controversial Senate appointments, the GST remains atop the list".


An hon. member:: Oh, oh.


Sheila Maureen Copps: The member for St. John's East yells out "propaganda". If that is propaganda, he should be aware that these were statements made recently in the newspaper by the hon. member for Hamilton-Wentworth who, the last time I looked, was still a member of the Conservative Party.
I would like to ask the minister what response he has to his colleague who obviously is feeling the heat from
October 15, 1990

his constituents but does not have the guts to take the courage of his convictions and cross the floor to sit as an independent.


An hon. member:: He will.


Michael Holcombe Wilson: Mr. Speaker, her colleagues from Acadie-Bathurst says that we do not have the courage to meet these major challenges that we are faced with. If the GST is not a major challenge, I do not know what is, but I remind colleagues that for 50 years now, starting with the Rowell-Sirois report in 1940 and every 10 years since then, there have been recommendations to scrap the existing manufacturers' sales tax and bring in a new type of sales tax.
Jean Chretien, when he was Minister of Finance in 1977, observed that the existing sales tax should be changed.
Allan MacEachen brought in a budget in 1981 to change the existing sales tax to the wholesale level. It did not work. He asked Wolfe Goodman of Toronto, one of the pre-eminent commodity tax practitioners in the country to bring in a report. Mr. Goodman brought in the report, as I said around the time of the 1984 election, and it was that report which said: "not at the wholesale level. You have to bring in a tax. To be a properly designed commodity tax, it should be brought in at the retail level".
In response to my friend from Hamilton East, sure, we are all feeling the heat. We all know that this tax is not popular, but colleagues on this side of the House are prepared to tough it out because they know it is the right thing for the country. They know that it is one of the most significant things that we can do to improve the economy of the country and also to put our exporters, people who compete against importers, in a solid position to compete and create jobs. Also it will reduce the cost of new investment in Canada, in the case of Quebec which has harmonized with us by 7.5 per cent, equivalent to a 7.5 per cent invest tax credit.
For someone who represents a steel town, why is my friend resisting a type of tax initiative that will have such a positive impact on the steel industry in Canada?


Mr. Mills:: Mr. Speaker, my question for the Minister of Finance relates to productivity. He is always talking in this House about how the tax system is designed to help
Supply
our exports along and give some incentive to our manufacturers.
When I talk to the people in my city, which the Minister of Finance shares, the biggest disincentive to productivity is the sense of unfairness that exists on the shop floor and executive offices, which in turn goes all the way through the economy.
Does the minister really believe that he can create an environment of world-class productivity, with an environment in business where, forgetting for a moment the GST and all its complications, but just the entire tax system which people do not perceive to be fair and where they do not understand: there are parts of the tax act which are used for jobs, and there are parts of the tax act which are so old that it is just out of touch and out of date. When will the minister open the shop door and start listening to people who really know what productivity is all about and the current environment that he is creating-


The Acting Speaker (Mr. DeBlois):: I regret to interrupt the hon. member. Is there unanimous consent to let the hon. member continue his remarks?


Some hon. members:: Yes.


The Acting Speaker (Mr. DeBlois):: The hon. member has the floor.


Dennis Joseph Mills: How can the Minister of Finance possibly believe that a complicated system like the GST, his entire economic package right now, can do anything to promote productivity or a spirit in our economy that is going to lift us out of this recession we are in?


Michael Holcombe Wilson: Mr. Speaker, I think my hon. friend would agree with me that the GST will remove a hidden burden of tax on all our exporters. That is going to help productivity. It puts Canadian companies on a fair and level playing field with the imports that they have to compete with, whereas now the imports pay one-third less tax. That helps our productivity. Moving to the GST will reduce the cost of new investment by 4 per cent for those provinces that have not harmonized and by 7.5 per cent in the case of Quebec that has harmonized. That is productivity.
I think what the hon. member is getting at is attitudes. My hon. friend has written a book on taxation. He is saying there is a sense of unfairness, and I say to him that he is fostering that sense of unfairness by using statistics

October 15, 1990
Supply
for 1987 in that book which reflect the position before income tax reform. Things have changed fundamentally since that because of the large number of loopholes that we have removed as a result of sales tax reform, and in other budgets, and the result-


Dennis Joseph Mills: Corporate preferences haven't been administered.


Michael Holcombe Wilson: Yes, the corporate preferences have been reduced significantly. The result is that the corporate tax rate, the effective tax rate, is higher and the level of profits is lower in this current year. So that tells me one thing, that corporations are paying a higher burden of tax.
The statistics for 1987 show that the chartered banks were paying no tax. This year they will be paying about $1 billion worth of tax. People earning more than $50,000 were paying about 32 per cent of the total tax burden in 1982. This year they will be paying about 38 per cent of the total tax burden.
If my hon. friend is fair to me and honest with the people of Canada he will use the proper figures and not figures that are out of date and provide an inappropriate illustration of what is going on.


Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, the minister, in what was a chance for him to defend his policies, put forward a sunset of hopeful suggestions for this economy and for the future.
He suggested first that we have a fair fiscal and economic system in this country. Second, if I can quote his comments during Question Period today: "Our way is going to work", in short, that his economic strategy will be successful. Third, the tax which he is putting into effect at this point, the goods and services tax, is somehow exactly what this country needs. Let me suggest in all three of these points that the minister has tried to put forward that he is completely and utterly off base, completely and utterly wrong.
Let us look at the question of fairness. The fact is that across this country there are corporations which for the latest years for which we have statistics, not 1987 but 1989, these corporations-and I will give some examples-in fact gave greater donations to the Conservative Party of Canada than they made in terms of taxation contributions to the government of this country.
The donation of Xerox Canada to the Conservatives was small, only $11,500. If you consider their profits were $74.6 million, that might seem rather cheap. The minister might be rather unhappy with Xerox Canada. I suggest that he should be much more unhappy from a policy point of view that this same Xerox Canada, with its $11,500 contribution to his party, paid not a penny of taxes to the revenues of this country.
Confederation Life was not a great contributor to the Conservative Party. Its donation was about $11,200 out of a pre-tax profit of $103 million. Again, not a single penny paid into the revenues of this country.
Domtar is another example. It is a little bit bigger payer. It made a contribution of $45,000 to the Conservative Party out of pre-tax profits of $18 million. Not only did it not pay a penny in tax but received tax credits from the Government of Canada totalling $21 million.
Power Corporation donated to the Conservative Party over $72,000 out of profits of $214.5 million. It paid not a penny to the taxpayers of Canada, not a penny to the Government of Canada, but instead received credits of $2.1 million from this government.
If that can be called fairness, if that can be something that this minister can stand up and say he makes no apology for with respect to his economic policies, then all I can say is this minister has forgotten what this country is about and what the meaning of fairness is.
If we take a broader picture, if we get away from some of the specifics and look at the period 1984-85 up to 1889-90-again, these are periods the latest for which we have statistics-corporate taxes during that period did increase by 38.8 per cent. Personal taxes increased by 77.4 per cent which is in fact more than double the percentage that corporate taxes increased.
The government has increased sales and excise taxes, which it claims are so unfair in terms of the manufacturers' sales tax, more dramatically than any government in the last 20 years in this country. Those sales and excise taxes increased by 105.5 per cent.

So we take the three broad categories of taxation. It is very clear that despite the minister's rhetoric, despite the minister's attempt to tell us that everything is fair and acceptable, in fact corporate taxation has gone up far less in percentage terms than personal income tax. This is half the percentage increase of personal income taxes, and about a third of the percentage increase for sales and excise taxes. So much for the fairness that this minister speaks about.
We have suggested alternatives continually, using direct examples of tax systems which work in other countries. We suggested a minimum corporate tax, which is not some wild radical idea but something used in the United States, as the minister knows well, and which sees to it that there is at least some kind of contribution to the federal treasury on the part of corporations that make money in that country. So much for the question of fairness.
The minister has also suggested that his policies work. He suggested amazingly enough that after all, we do not want to look to Britain which has a 10.9 per cent inflation rate. We do not want that to happen to us in Canada. Margaret Thatcher, who runs the Government of Britain, is following precisely the policies which this minister and his government have pursued in this country; policies of cutbacks, high interest rates, massive increases in the level of interest rates, privatization of corporations and deregulation. Margaret Thatcher wrote the book. This minister is simply reading it out here in Canada. Then he has the gall to stand up in the House and to say that we do not want to do the same as has happened in Britain. We do not want to see these vast increases in inflation, when those vast increases in inflation are precisely the consequence of the kinds of policies that this Minister and this Prime Minister have followed in this country.
Frankly, I have not been able to believe it as, day after day in the House, the minister has got up and noted Margaret Thatcher's government and its terrible rate of inflation as a sign of the major problems which we could get into if we were not careful in Canada. I am not sure if the minister was thinking of a different country or a different prime minister.
Supply
It was Margaret Thatcher who stood in this House of Commons and endorsed this minister's policies for free trade, for instance, two years ago.


Michael Holcombe Wilson: A very astute woman.


Steven W. Langdon: "A very astute woman," the minister says. That is very interesting. It was a very astute woman who has brought about an inflation rate of 10.9 per cent, which the minister stands up and criticizes without telling us that this very astute-


The Acting Speaker (Mr. DeBlois):: I regret to interrupt the hon. member but his time has expired. Is there unanimous consent to let the hon. member for Essex- Windsor continue his remarks?


An hon. member:: His time is not over yet.


The Acting Speaker (Mr. DeBlois):: I am sorry. Indeed the time for speeches is 20 minutes. I apologize. You have 10 minutes left.


Steven W. Langdon: Mr. Speaker, I was just getting going.
The minister suggests that this is something which has worked, that we have had a policy which has worked and will work. To quote the minister: "Our way is going to work."
Let me suggest something to those who might care a little about details and about reality as opposed to myth. I will quote from the minister's budget of February 10, 1988. The minister suggested that the gross domestic product of the country would be increasing from a level of 3 per cent in 1989 to a level of 3.2 per cent in 1990-93. He suggested the unemployment rate would be falling to an average of 7.0 per cent; that inflation would be at 3.4 per cent, and, best of all, that the rate of interest would be at 6.7 per cent. That is exactly the kind of prediction or sense of the future which this minister has given us.
Let me quote what is best described as a slightly more sober view of the economy from the early part of the 1990s, as projected by the Conference Board of Canada last year. It suggested that the Gross Domestic Product is going to be increasing by 0.7 per cent in 1990; 0.4 per cent in 1991; and possibly up to 3.0 per cent in 1992. Every single figure is below the average which the minister suggested would be the case.
As for the unemployment rates, they will be at 7.9 per cent, 8.9 per cent, and 8.5 per cent, again, in every single

Supply
case, well above the average suggested by the minister's own figures. I could say the same thing with respect to interest and inflation rates.
We have a minister who has had a chance to show that his policies work. In fact, he has had a long chance. The Canadian people have been long suffering with this minister. Yet, what we have seen emerge is the first recession created in this country by the policies of the government of this country. That is not me suggesting it. That is the Conference Board of Canada, a body which is usually very supportive of the minister.
In fact, the Conference Board has made it very clear that this first made-in-Canada recession is taking place at the same time that the United States, our major trading partner, may even avoid a recession. So much for success. So much for things working out.
The minister in February of 1988 said things were going to work out well, but they did not. Can we really expect to believe him in 1990 when he says things are going to work out well in the future? Or can we expect to see what the Liberals gave us in 1981-82 coming back again?
Can we expect to see a recession take place in which the unemployment rate does not stop at the 8.4 per cent at which it presently is, but go up to the 12 per cent that the Liberals gave us in the past?
Can we expect to see interest rates go, not to 14 per cent and 15 per cent, but to the 21 per cent and 22 per cent that the Liberals gave us?
Can we expect to see a recession not just for a year, as this minister is giving us, and that costs us, not just two percentage points of decline, but a 6 per cent decline in real growth as the Liberals gave us?
Are we going to see a conflict take place between the Liberals and the Conservatives to see who can drive the country further into depression? Are we going to see an attempt at outcompeting each other in poor economic mismanagement?
I think it is possible, Mr. Speaker, that this may take place. I hope, however, that there are alternatives that this minister chooses. I hope for instance the minister puts into effect a minimum corporate tax. I hope he cuts interest rates, as clearly could take place in this country.
I hope that he establishes some new institutions: a national industrial bank, for instance, to help our industries to start to modernize faster and to get better prepared for world competition. Will he see the establishment of a regional set of development banks that will provide low interest rates in poorer parts of the country? Is it possible that we will see some effective adjustment policies put into effect that really start to train our workforce for the future? That is what we have advocated. Will we see an environmental thrust that gives us, not taxes on the poor, but taxes on products that hurt the environment? Those are the directions we should take.
I urge the minister, first, to recognize that we are in a recession and, second, to start to do something about it instead of just trying to blame the senators or blame the Liberals. Let me tell the minister, and this is my last point, across the country there is not much enthusiasm for the Liberal Party. I can tell him that from the province of Ontario.
Let us give a future to the country that comes from new policies. Let the minister gives these new policies to us or let us, as a party, give these new policies to the country.


The Acting Speaker (Mr. DeBlois):: I thank the hon. member for Essex-Windsor for his indulgence and understanding. The hon. the Minister of Finance.


Michael Holcombe Wilson: Mr. Speaker, let me just comment very briefly. The hon. member has said we have not brought in any corporate minimum tax. In fact, that is precisely what the large corporations tax is. It will raise over $1 billion and it is currently being held up in the Senate.
We have brought in a limitation on research and development deductions so that companies such as Xerox, which he referred to as not paying tax, will pay tax. We have also phased in a reduction of capital cost allowances which will result in companies such as Dom-tar, which he quoted as not paying tax, paying tax as a result of these changes that will be phased in due to tax reform in 1988.
It is inlportant for my hon. friend to realize that we have taken directly the criticism that he and others, including ourselves, have directed toward the corporate
October 15, 1990

income tax system, but there is a limit as to how far this can go without forcing new investment into other countries because the tax system is more attractive there. He will find his friends in Queen's Park will be following that same thinking when they try to raise their level of corporate taxation.
I would like to put two questions, if I could, Mr. Speaker. First, how will he cut interest rates? Second, he wants an industrial bank, as I understand it, that will encourage business to modernize. How will he be encouraging business to modernize? Will there be low cost loans or will there be no cost loans or what? What is the basis? How will that bank do a more effective job than the normal sources of financing such as the insurance companies, the pension funds, or the banks do right now?


Steven W. Langdon: Mr. Speaker, first, with respect to the large corporations tax, I remind the minister that the definition of large leaves a great many firms within the country that are quite sizeable out of his definition of large. It is certainly a step forward to see to it that some kind of tax contribution is made by those companies, but I do not think that it is a sufficient step insofar as it still leaves vast numbers of companies that are not making a contribution, despite the fact that they are making significant profits, to the tax system in this country.
I am sure that both the minister and I went door to door in the Ontario election that took place recently. One of the things that was most strongly felt by people throughout Ontario was the fact that there was this sense of imbalance in the tax system, that there were some people who were getting off scot-free and these are the people to whom, frankly, Premier Bob Rae's promise of a minimum corporate tax made a great deal of sense. There will be, I am certain, a minimum corporate tax put into effect in the province of Ontario. But that is not sufficient either because, of course, if it just takes place in one province, that province takes the risk of seeing corporations move their head offices to other provinces. So it is up to the minister to start to move. It is up to the minister to start to take action and to put a corporate tax into effect. It has not destroyed capitalism in the United States, I say to the minister, and it will not do so in this country either.
With respect to the two questions which were asked, I say to the minister that since my appointment as critic in
Supply
areas of macroeconomic policy, I have talked with officials from the Bank of Canada. I am quite convinced that they would not have any difficulty using the technical mechanisms which they usually use in terms of the expansion of the money supply within our economy. They would have no problem in bringing the interest rates in this country down. We have a very professional and effective Bank of Canada here and I think the minister should be the first to admit that it would be quite capable of reducing interest rates, if that were its policy.
Finally, with respect to the National Industrial Bank, let me suggest to the minister that such an institution has been at work in the country of The Netherlands for quite a number of years. It is 51 per cent government shareholding, 49 per cent private enterprise shareholding. It operates through a combination of low-interest loans and direct commercial loans which nevertheless take into account the realities of risk which are there in the case of quite a number of industries that are going through adjustment problems.


The Acting Speaker (Mr. DeBlois):: Order, please. The hon. the Minister of Finance on a point of order.


Roger Simmons: He's taking his lesson from Charbon-neau. He has had his question.


Michael Holcombe Wilson: It is a point of order, and I think the hon. member should apologize for what he just said about the Speaker.


An hon. member:: Order. Withdraw.


The Acting Speaker (Mr. DeBlois):: Order, please. I recognize the hon. the Minister of Finance on a point of order.


Michael Holcombe Wilson: On a point of order, Mr. Speaker. I will not take the opportunity to respond to what my colleague has said but I would like to notify the House that tomorrow will be designated as an opposition day.

Supply


The Acting Speaker (Mr. DeBIois):: Questions and comments. Only two minutes for the hon. member for Burin-St. George's, and two minutes for the hon. member for Essex-Windsor to answer.
[English)


Roger Simmons: Mr. Speaker, on that point, I just suggested you were taking orders from Charbonneau. There is nobody on that side suggesting Charbonneau is not being fair, is there? Anybody over there suggesting he is not being fair?
Mr. Speaker, I listened with great attention to my good friend, the hon. member for Essex-Windsor. I have the greatest admiration, I say to him, for people who can make-


Albert Glen Cooper: Terrible, terrible.


Roger Simmons: I know you are terrible but I am not talking about you now.
The gentleman for Essex-Windsor raises in me nothing but unadorned admiration because I have great admiration, unfettered admiration for people who can make good, 20-minute-long, tongue-in-cheek speeches, without so much as a smile to let on what they are really up to. I heard him talk about being for this and against this on several issues throughout the 20 minutes. It has to be the best tongue-in-cheek speech that I have ever heard or else one of the most inconsistent, entirely inconsistent speeches I have heard, because he was all over the block. So I am going to help him focus in the two minutes we have left in this segment. I am going to put a very direct question to him which can be a yes or no answer.
The question to my friend, the hon. member for Essex-Windsor, is simply this: will he now stop the word games and will he give an unequivocal commitment to this Elouse that he will support the Liberal senators in the Senate, unequivocally, in their fight to stop the GST? Will he be dissuaded from playing the word games and concentrate on helping us stop that terrible GST while we have time to do so?


Steven W. Langdon: Mr. Speaker, I think you said two minutes. Very briefly I, of course, feel that this government should not be proceeding with the goods and services tax. It is quite clear from what the Conference Board has said, an independent body-


Sheila Maureen Copps: Do you support the Senate?


Steven W. Langdon: I will come to that if you will stop heckling. Just hang loose, guys. I would not want to be a senator, believe me.
What has to take place is a defeat of the GST, without question. There are at least three key elements to that defeat. The first is the Senate fight which is taking place. I think that that Senate fight is a fight which, although it dismays many people, is nevertheless a fight which has to go forward. Second, I think there need to be court challenges taken forward, as the Ontario New Democratic Party government intends to take forward. I am sorry to see, for instance, that no Liberal provincial government has decided to take such a court challenge forward. Finally, and most important, this fight must be supported by the people of Canada, across this country, because that is the way that we can stop a government from ramming an unfair, unjust, tax down the throats of Canadians.


Sheila Maureen Copps: Mr. Speaker, I thank my hon. colleague, the member for Essex-Windsor, for being as frank as he was about his party's position on the Senate. I welcome his statement and I welcome his position. What troubles me is that, over the last number of weeks, we have had more positions from his party than I care to mention on that particular issue. On the one hand, we have his House leader who stands up in the House, beats his breast for all of western Canada and says: "We want to abolish the Senate, those nasty senators who are carrying out their responsibilities". On the other hand, when it suits their purposes, the same House leader finds himself in the Senate associating himself as closely as possible with the able work of the senators to kill the GST. Could the hon. member for Essex-Windsor let his colleagues know that his clear and unequivocal position is to support the Liberal Party in its fight to kill the GST? If we unite, and this is not just the members of the opposition, not just the members of the fringe parties here in Parliament, but if we as Canadians unite in opposition to the GST, maybe we can force the government to back down.
It is significant that the hon. member for Hamilton- Wentworth stated in this week's newspapers that he has considered crossing the floor and giving up his seat, that in the 11 or 12 years that he has been in Parliament, that he has never had as many calls, letters, and pleas from Canadians to kill the GST.
October 15, 1990

I could not believe my ears when the Minister of Finance had the gall to stand in the House and pretend that he was carrying the banner of democracy when, if the Minister of Finance and the Prime Minister had been open and honest with the people of Canada in the last federal election, he might have had a democratic leg to stand on.
I knocked on doors in the last federal election. I heard the Minister of Finance say to Canadians that the new tax was not going to raise a single penny of new revenue. We know from the statement of the hon. member for Mississauga South and others that it is going to be a cash cow.
I would like to take a moment and read into the record some of the comments of frustrated ordinary Canadians and to refer very specifically to this resolution, because it does not only speak to the destructive tax policies that are going to kill us, the so-called fiscal policies, but it also speaks to the monetary policies which hearken right back to the work done by the Minister for International Trade to sell this country down the river. I am sorry that the hon. member for St. John's West is no longer in his seat because I think what we have is a resolution which is very clear, concise, direct. It calls for the House to condemn the government for planning and implementing the first ever made-in-Canada recession.
I would like to refer to the speech made by my colleague, the hon. member for Essex-Windsor. He claimed and agreed with us that it was the first ever made-in-Canada recession, but on the other hand, he continually wanted to tie back this particular recession to the recession that the world faced in the economic and market conditions of 1981.
The Minister of Finance had the gall a few moments ago to stand in the House and say that the member for Hamilton East, who still happens to have the largest number of steel factories in my riding, should be supporting his government's fiscal and monetary policies. The fact is those of you who were here during the trade debate will know that very early on Clayton Yeutter indicated that his government was not prepared to move with the trade deal until the Canadian dollar moved closer to the American dollar. At that time we posed the question to the Canadian Steel Producers' Association very directly: What would happen if we had an 85 cent
Supply
dollar? It said it was a hypothetical question it could not answer.
When we reach an agreement on the current strike, which is leaving thousands of workers and their families without a regular pay cheque in my community, and the combination of fiscal and monetary policies of this government which are creating an economic climate, once the Stelco strike is over in my community, I would suspect that many hundreds, if not thousands of workers who are still on the Stelco employment list will no longer have jobs.
I could not believe my ears when the critic for the New Democratic Party said that the Bank of Canada had respect and he complimented them on their work. I do not know whose monetary policy he is supporting but the Bank of Canada's monetary policies, aided and abetted by the Minister of Finance and the Prime Minister, are driving this country into the first made-in-Canada recession. It started with the trade deal and it started with a clear government decision to allow our dollar to move closer to the American dollar. It is continued by fiscal policies which are causing Canadians to lose their jobs by the thousands.
The Minister of Finance beats his breast and talks about how we have to get the finances of the government in order. I have been trying, in my own small way, to find out how many millions of government dollars have gone out by way of pay-outs to Canadian companies that are now moving to the United States: Firestone, Variety Corp., Tridon.
Members of Parliament in the House of Commons do not even have the right to go and ask those companies to open up their books so that we can find out how, when, why, and where the taxpayers' money is being used. Variety Corp.-loans and guarantees in the hundred million dollar range, with the condition that it keeps its head office in Canada. It is picking up and going south of the border. Tridon, with technological dollars taken right out of the pockets of the Canadian taxpayer for its world blades and for its reflectors, is now going to take that technology that is making it money and do that production in the southern United States; exactly the scenario that we predicted at the beginning of this made-in-Ca-nada recession which was perpetrated on us by the

October 15, 1990
Supply
Minister for International Trade, the Minister of Finance, and in particular the Prime Minister.
What is frustrating average Canadians, as they hear us talk and they hear the Minister of Minister with all his jargon about how his interest rate policies are fighting inflation, et cetera, is that they know in the last six years of this Tory government their purchasing power has been eroded. They are reaching a level of zero tax tolerance, and they just cannot take it any more.
In fact it was the member for Hamilton-Wentworth who said last week in the newspaper article I quoted earlier that Canadians are sick and tired of the tax level and they just will not pay it any more. We are reaching the point of the tax revolt.
I have a letter from a very ordinary Canadian, Catherine Provo of 17 Lang Street, Hamilton. I would like to hear what she has to say on this issue because I think she speaks for average Canadians who feel extremely frustrated and who feel that their democratic hands have been tied by backbenchers in the Tory government who have been muzzled; people of the likes of the member for Hamilton-Wentworth who goes to his riding and says how awful the GST is but who stands here in the House and supports it. This is what she has to say:
I am in total opposition to this destructive and unnecessary tax grab.
As a single parent of four children, my standard of living which has always been to just make ends meet, has seen a steady decline since the Progressive Conservatives took control of this country.
I find the term "Progressive Conservative" to be a total contradiction in itself. I feel this needs no further explanation. One only needs to try to raise a family in this country.
My vote in the next election will depend on the defeat of this bill -
Please do all that you can to stop this regressive tax.
We in the House of Commons have been doing what we can. The people in the other place have been doing what they can. I must say in that respect I find the hypocrisy of the NDP unconscionable because it has not given full support to the over-all parliamentary objective of killing the GST.
We are united with our colleagues in the other place, fighting hard to try to kill the GST. Members of the NDP have forgotten the lesson of the 1988 election. Remember, Mr. Speaker, when they were going to be the great fighters against the free trade agreement until they saw our leader, the right hon. member for Vancouver Quadra, moving ahead in the polls and they forgot all about the trade fight. They totally abandoned their principles. Instead of attacking the trade deal, they attacked the Liberal Party and created a situation where the Tories were elected to another majority government.
That Tory majority in this Parliament is a direct result of the failure of members of the NDP to fight for and defend their principles in opposition to the trade agreement. They are doing the same thing on the GST. If they were truly committed to fighting the tax, we would not see the kind of rhetorical game playing that we are seeing from the House leader of the NDP, that we are seeing from the leader of the NDP, and that we are seeing from all those players. Members of the NDP do not mind coming here and associating themselves as close as possible with the senators, but when they go out to the public they claim that their objective is to see the Senate wiped out and abolished or to move in another direction.
I too fully support Senate reform. I think what we may see as early as possible is a reformed and invigorated Senate that will be able to provide the kind of leadership that unfortunately is sadly lacking in this Chamber. I for one would like to salute the senators in what they are doing. We in the Liberal caucus are going to offer them our 100 per cent, full support; not the kind of equivocation we see from the members of the NDP.

This really bothers me, Mr. Speaker! The New Democratic Party financial critic has just said today that he agrees with the Bank of Canada's professional monetary policy. We know full well that with high interest rates, the GST policy, the current monetary policy which limits our capacity to export to the United States, we cannot go along with the Bank of Canada's policy. I suggest that since the Coyne affair, Canada's monetary policy has never been in such a serious crisis, and the time has come for all political parties to recognize the fact that we cannot afford a monetary policy which provides for interest and loan rates in this country which are five points higher with respect to exports to the United
October 15, 1990

States. This creates a situation wherely our small businesses are unable to compete.
Moreover, Mr. Speaker, the GST is the last nail in the coffin of a tax and monetary policy which is leading Canada for the first ever into a made-in-Canada recession. What is the Minister of Finance's response? Today, when asked about Canada's position during the negotiations on marketing boards for our major farm industry, how did his colleague the Minister of International Trade react? He just laughed. He said that we were giving our farm producers too much money. I heard him say that with my own ears.


Mr. Charest:: Oh, oh!
Ms Copps: The former Minister, the Hon. Member for Sherbrooke, was not here, but I was. I heard Mr. Crosbie, with the support of the Minister of Agriculture and the Prime Minister, tell our farm producers to their faces that the Government was giving them too many subsidies. I only hope he will make a speech in front of the UPA and say the same thing. Those who are sitting on Government benches and who understand our current policy on international trade realize now that the Government is about to kill the family farm in this country. With the Government's decision on dairy products, we know that thousands of jobs will be lost, not only in the province of Quebec, but everywhere in Canada, because of the milk quotas. And what is the Government's proposed remedy? It hits us all with its GST.
Through its monetary policy, it has created a situation where Canada, a country which has always been very dependent on external trade, is no longer able to compete with the United States because its real interest rates are five points higher than those in the United States. When businessmen and women think of making investments, where will they go? Certainly not here in Canada. And the Minister claims that he is doing everything in his power to rectify the Government's spending problem. But let me tell you one thing, Mr. Speaker. I have been trade critic of my party for hardly a few weeks now. I have been trying to get information concerning the billions of dollars paid by Canadian taxpayers to corporations which are now moving to the United States. You will not believe it, Mr. Speaker, but as elected Members of this House, we are not entitled to check the books of the various corporations which have
Supply
received funds from Canadian taxpayers. We are being asked to dig ever deeper in our own pockets, which the corporations are not asked to do although they have received subsidies from the Federal Government. I suggest there is a certain inconsistency there.
There is a certain inconsistency about the government's position. I could through dozens and dozens of letters-and I am sure most members could-about the potential for human suffering that is being caused by this government's GST policy.
I should like to take just a couple of moments to point out some real flaws in the actual operation. I am sure most of us would believe, for example, that health matters should not be taxed. However, are you aware, Mr. Speaker, that as a result of the current policies of the GST you will be taxed if you take your dog to veterinary clinic to get a rabies shot? Do we really want to create a situation where to protect your children from being bitten by rabid dogs you have to pay a tax?
Some of us will know that the lime disease has recently come into full force in certain parts of southwestern Ontario and certain other parts of the country. We need to have policies that will permit officials and owners of pets, et cetera, to inoculate their pets, to be responsible pet owners. This particular policy basically says that anybody who owns a cat or dog is going to be taxed for simple prevention measures including spaying, vaccinations, et cetera.
We can see that not only are there inconsistencies in the application of the tax as it relates to hospitals which will have to pay tax on the certain goods and services that they purchase, but that will represent a tax upon a tax in the hundreds of millions of dollars in a sector that Canadians have always believed should be free of tax.
I know that the Minister of Finance is unlikely to support this resolution, but I would like to reiterate the plea that I make to his colleagues. This is a simple resolution that condemns a government policy that last week saw lay-off notices delivered to 8,500 employees across this country. Mr. Speaker, if you read the recently published book by Maude Barlow which was just launched on the weekend, there have been over 100,000

October 15, 1990
Supply
jobs in the last year alone eliminated as a result of this government's particular policies.
I ask members on the government side of the House who value their political future, those members who like to feel that they have a little independence, to listen to their constituents when they tell them that they have reached zero tax tolerance.

You had better listen to your constituents, Mr. Della Noce, because if you are here to support the GST, come election time you will realize that you will suffer a tremondous prejudice. And I ask the same question to all Hon. Members.


Mr. Pierre H. Vincent (Parliamentary Secretary to Minister of Finance):: I rise on a point of order, Mr. Speaker.


The Acting Speaker (Mr. DeBlois):: The hon. member for Trois-Rivieres on a point of order.


Pierre H. Vincent: Mr. Speaker, I am amazed to see the hon. member for Hamilton East call other hon. members by name in the House. After six years in this place, she should know that members are to be referred to by riding.


The Acting Speaker (Mr. DeBlois):: The hon. member for Hamilton East has 30 seconds left.
Ms Sheila Copps (Hamilton East): I am sorry, Mr. Speaker. He changed ridings. I thought he wanted to stay there. His new riding is Laval-Est. I urge the hon. member for Laval-Est to believe his constituents when they tell him that they have had their fill of taxes. If he wants to get reelected, he should at least listen to his constituents. I heard him say on a Montreal radio station the other day that he was there to fight alongside the Quebec caucus, that he was going to tell the Prime Minister that the GST was too much and that the government policy was- When the time comes to speak on the issue and vote, I urge you to vote with us. That way, the Prime Minister will get the message.


Mr. Vincent Della Noce (Parliamentary Secretary to Minister of National Revenue):: On a point of order, Mr. Speaker.


The Acting Speaker (Mr. DeBlois):: The hon. member
for Laval-Est on a point of order.


Vincent Della Noce: Mr. Speaker, I cannot help but respond to my colleague about what she claims I said on the radio. She should quote what I said in the interview I gave on air not far from the office of her colleague the member for Saint-Leonard, where I said that I was the one who would represent my constituents, not the senators because they never attended a social function. I never saw one!


Jean J. Charest: Mr. Speaker, I hope my colleagues in this House will allow me to take a moment of our precious time to congratulate you on your appointment to this new role. This is the first opportunity I have to do so.
Mr. Speaker, I listened with interest to my colleague from Hamilton-East who referred a few times to the concept of leadership. I could not help noticing because she is just back from a long leadership race within her party which, unfortunately, she did not win. Someone else was elected as leader of the Liberal Party of Canada.
I found it interesting because I feel that, as a matter of fact, a number of issues we have to deal with in this country at the present time, including the proposed GST, relate to leadership. I can tell you forthwith, Mr. Speaker, that I personnally find what is happening in the Senate appalling. It is unacceptable! No democrat can allow such actions on the part of a non-elected Senate dominated by federal Liberals.
Unfortunately, as we speak, Mr. Speaker, the population does not realize how outrageous the present actions of the federal Liberals are and is not aware of their possible consequences on democracy.
Canada is one of the few countries going backwards. While the Eastern Bloc is becoming more democratic in Canada, the federal Liberals are turning back the hands of time. This is incredibly outrageous! I denounce that vigorously, Mr. Speaker.
I should like to direct a question to my very articulate colleague, the hon. member for Hamilton East, concerning her involvement in the leadership race. I would like to know what position she took on the GST during the leadership race, because her new leader, Mr. Chretien, did make some remarks about it during the leadership race, as reported in an article in the Ottawa Citizen of October 13, 1990. It refers to Mr. Chretien under the headline 'Who's in charge?', with a question mark, for sure. I recommend that article to people who are interested because it asks who is in charge of the Liberal
October 15, 1990

Supply
Party of Canada. I might point out that there is no answer.
Referring to the GST during the leadership campaign, Mr. Chretien said that cancelling it presented a danger unless there were alternatives available. That is what he said during the leadership race. But in addition to that he said, and I quote- Well, this is from the Ottawa Citizen, it will be up to him to confirm or deny this, but the article quotes Mr. Chretien as having said:

"There is no great tradition in Canada for the Senate to block fiscal measures".

Apparently that is what he said.
Later, it seems he changed his mind when he stated: [English]
"I have my own personal opinions but I am not alone in the Liberal Party".

A great demonstration of leadership!
Later still he said he would let the Senate act as it saw fit. But later again when the Senate announced it would kill the GST he is reported as having said:

"They will not do anything that I don't want them to do".

Mr. Speaker, I want to conclude quickly by quoting the member for the Ottawa region who is in the House, the hon. member for Ottawa South, Jim Manley, the junior finance critic who said:

-says he supports the Senate's efforts but he is worried that in the battle for public opinion kazoo blowing might very well cost the Liberals support. I personally find the antics of obstructionism offensive and I don't believe that most Canadians want that to be the way their public policy is decided".

Apparently, Mr. Speaker, that is what he said.
So I want to ask the hon. member for Hamilton East what was her position during the leadership race, whether or not she agrees with the position of her new leader, Mr. Chretien, or whether she has maintained the position she had at the time?


Sheila Maureen Copps: Mr. Speaker, the hon. member knows Mr. Charbonneau, the Speaker of the other place, who decided last week that rules no longer existed.

Mr. Speaker, if he can stand there and defend the position of his colleagues in the Senate who are willing to throw out the rule book, he and his colleagues in the House of Commons are aiding and abetting the demise of democracy. You can talk about any democratic movement around the world but one of the primary tenets of democracy is to respect the rules of the House and the Senate'. If you do not like the rules of the House and the Senate, then you move to change them. In 1986 there was one political party that moved a unanimous motion for an elected Senate and that was the Liberal Party.
This is a hypocritical government, Mr. Speaker. The Prime Minister stands in his place and beats his breast about the Senate, but he was very quick in appointing his friends there. And who is there now as the president of the Senate? One of the key people who behind the scenes orchestrated Joe Clark's overthrow. You know the story, I know the story. It is as clear as the book written by L. Ian MacDonald, the Prime Minister's official biographer.
Clearly, Mr. Speaker, I respect the rule book. I am prepared to change the rule book so we can have an elected Senate. But I wish those phoneys on the government side of the House would be willing to stand up and support the Liberal call dated in 1986 for an elected Senate.


Jean J. Charest: Point of order, Mr. Speaker. I would like the record to show very clearly that the MP for Hamilton East refused to answer the questions I put to her.

Supply


Vincent Della Noce: Mr. Speaker, I will try my luck once more with the Hon. Member for Hamilton East and see whether she could reply. Because she dared mention my riding, I will tell her something about it. If its name has been changed it is because we listened to the people. And it is the people who decided that their riding should be called Laval. After 25 years, it was time to grow up and so we did. Although Laval was established 25 years ago, the former name still prevailed. Nobody had thought of that. Today, my constituents find themselves in the Laval East riding instead of this other name which cannot even be found in the dictionary.
Also, the Hon. Member and her colleagues referred to a recession. There is a saying that a recession always begins in the car industry. Mr. Speaker, I visited the various car dealers in my riding. To my surprise, these car dealers responded so well that their statements covered two pages in the October 12 issue of this weekend's Journal de Montreal, the newspaper with the highest circulation in the province of Quebec. To make a long story short, it stated: "The car industry does not yet feel the pinch of the recession". Wait, for I have something even better for my hon. friend, following which I will ask her a question. Sylvie Dagenais, one of the very best car saleswoman in Laval stated and I quoted: "Business has never been so good. A recession? Never heard of it", said Sylvie Dagenais, President of Vimont Lexus Toyota. "I have never sold so many luxury cars. I am short of models just now. A Japanese sedan costing over $65,000, that's fantastic!" Richard Johnson. Mrs. Dagenais, who is in charge of 5 dealerships, stated that she has never felt the effects of recession. "We are doing just fine. It is a question of attitude. We have build everything on customer service satisfaction-"


The Acting Speaker (Mr. DeBlois):: Order, please! I must regretfully interrupt the Hon. Member, for there is only one minute left for the Hon. Member for Hamilton East to respond.


Sheila Maureen Copps: Mr. Speaker, I assume that he does not believe either the National Bank, or the Desjardins Movement, or the Minister of Industry, Science and Technology who acknowledged, here in this House last week, that we were in a recession.
But if he does not believe either the minister, or the Desjardins Movement, or the National Bank, will he at least acknowledge what the officials of the Department of Industry, Science and Technology have been saying, that Montreal East now has the highest unemployment rate in Canada? And if that member representing one constituency from the Montreal area thinks that everything is fine, I would advise him to go back home and listen to the residents of Montreal East where the unemployment rate is over 20 per cent, Mr. Speaker. These 20 per cent unemployed workers do not trust a member who is not prepared to fight for the unemployed of his area. It is a disgrace! He should leave that job to someone who cares!


The Acting Speaker (Mr. DeBlois):: The question and comment period is over. Resuming debate. The hon. Parliamentary Secretary to the Minister of Finance.


Pierre H. Vincent: Mr. Speaker, I am pleased to rise today to speak the opposition motion. This will give me the opportunity to review the events since 1984. I am convinced that we will hear some yelling and screaming from the opposition side. But, since 1984, we are used to their yelling and screaming.
The record of the Progressive Conservative Party as a government since 1984 is a success story. And I remember when-


Some hon. members:: Oh, oh.


Pierre H. Vincent: You see, they start yelling, Mr. Speaker, I warned you. I remember that, in November 1984, the Minister of Finance had tabled his plan for an economic renewal that the government wanted to initiate. I remember the budget of May 1985, the one of February 1986, the ones of February 1987, of 1988, 1989 and 1990. On these seven occasions, the opposition members, both Liberals and New Democrats-I can print out in the Hansard-had forecasted two things: the loss of jobs and a recession. Every time on seven occasions during six years, they said the same thing. They just rehashed what they had said the previous year. In six years, we have had an exemplary economic situation in Canada: 1.6 million jobs created. In six years! We are first in terms of job creation among industrialized countries, and second, after Japan, in terms of economic growth! These are, Mr. Speaker, the results of the Minister of Finance's eco-
October 15, 1990

nomic statement of November 1984 and his budgets. These are the results.
Mr. Speaker, you know, as I do, the Quebec motto. It is: "I remember". And in 1981-1982,1 did remember-I had a lawyer's office-that interest rates were at 22 per cent. The member for Hamilton East was then a member of Parliament, not a business woman. She did not have to pay 22 per cent. Like most of my colleagues from the province of Quebec, I had to pay an interest rate of 22 per cent because the then liberal government had the indecency, the gall to let inflation flare up to 13 per cent. Not 6 or 7 per cent but 13 per cent. That is what I call a recession! And that was also due to a lack of economic and fiscal policy.


Mr. Pronovost:: MacEachen!


Pierre H. Vincent: I will not deal in detail with the MacEachen budget that my colleague from Saint-Maurice is talking about, a budget which brought about some 90 changes after its introduction. Let's not go into that! Because if talk about MacEachen, I have to talk about the Senate. And if I talk about the Senate, Mr. Speaker, I must read the following as reported in today's La Presse: The present attitude of liberal senators is most unfortunate according to Le Conseil du patronat du Quebec which invites the population to protest in order to get the liberal senators to stop their foolishness and get serious.


Peter Andrew Stewart Milliken: On a
point of order, Mr. Speaker.


The Acting Speaker (Mr. DeBlois):: The hon. member for Kingston and the Islands on a point of order.


Peter Andrew Stewart Milliken: Mr. Speaker, the motion under consideration this afternoon deals with a recession created and planned by this government. The hon. member is talking about the Senate. There is nothing in this motion about the Senate. I would ask that hon. member confine himself to the motion under consideration and not discuss the Senate. Mr. Speaker, we must also-


The Acting Speaker (Mr. DeBlois):: I regret to interrupt the member for Kingston and the Islands, who is quite experienced and knows the rules, but what he just said is a matter of opinion.
Supply
Therefore, I prefer to let other address this question.


Some hon. members:: Hear, hear.


The Acting Speaker (Mr. DeBlois):: The Parliamentary Secretary to the Minister of Finance.


Pierre H. Vincent: Mr. Speaker, I thank you for your remarks, but I would like to go a little further. To begin with, Mr. Speaker, as I told you at the beginning of my speech, when the truth is spoken, members opposite aren't pleased. But, on the other hand, the present economic conditions are partly due to the non-elected liberal senators who have the nerve-I repeat, the nerve-to hold back bills duly adopted by this House, by' members of Parliament elected on November 21, 1988.
Yes, Mr. Speaker, the Senate issue has something to do with today's motion.


Some hon. members:: Oh, oh!


Pierre H. Vincent: I told you, Mr. Speaker, that there would be some whining from the other side!


An hon. member:: Respect democracy!


An hon. member:: They're whining!


Pierre H. Vincent: Mr. Speaker, I find that amusing, but I will nevertheless continue to tell you what the president, Mr. Ghislain Dufour, said in his press release: "Mr. Ghislain Dufour believes the show given by the Liberal senators to be of questionable quality, in that they show no respect for the legitimacy of Parliament and for the democratic principles which form the basis of our parliamentary regime".
That, Mr. Speaker, is the opinion of the people of Trois-Rivieres whom I met this weekend. These people told me that the Liberal senators, not too bright to start with, had all gone mad.
Just this afternoon, Mr. Speaker, senator Hebert, whose brother is in favour of the GST, quarrelled with an elected member of Parliament and insulted him-


Guy St-Julien: Hebert the Liberal buffoon.


Pierre H. Vincent: Mr. Speaker, indeed, the Senate issue has to do with the motion presented today.
To get back to what I was saying, Mr. Speaker, in 1984, the Minister of Finance said we would have vigorous economic growth followed by a slowdown. He said that in 1984. Do you know why he said that in 1984? Because

October 15, 1990
Supply
Mr. Wilson is the first competent Minister of Finance this country has had in a long time.


Some hon. members:: Hear, hear.


Guy St-Julien: To clean up the Liberal legacy!


Pierre H. Vincent: As the hon. member for Abitibi said: To try and clean up the Liberal legacy-


Guy St-Julien: It's true!


Pierre H. Vincent: -and the accompanying abuse, Mr. Speaker! There were companies that didn't pay income tax. There were loopholes. There were scientific research tax credits which cost this country billions of dollars, Mr. Speaker. And this with the knowledge of the Minister of Finance at the time, Marc Lalonde, who admitted as much in an article in L'Actualite. They really let things go. However, Mr. Speaker, as of September 1984, this loophole was closed. Even before the economic statement, even before our first Budget, we said: That's it!


Guy St-Julien: It was highway robbery. It was the Liberal robbery of the century!


Pierre H. Vincent: Yes, Mr. Speaker. However, Mr. Speaker, we had 1 per cent real growth this year.
From 1984 to 1989, we had an annual growth rate of 4.5 per cent, more than all the world's industrialized nations. As far as employment is concerned, we were better off than every other nation in the world except Japan. What the opposition doesn't say is that from 1984 to 1989, private income increased 16 per cent, after inflation and after taxes. This means that even with inflation and tax increases, and we admit to those, we do-Canadians judged us on our record in 1988-even after tax increases and inflation, private income increased 16 per cent in five years.


Some hon. members:: Hear, hear.


Pierre H. Vincent: They don't bring that up very often, Mr. Speaker.


Vincent Della Noce: We should send them a memo to remind them!


Pierre H. Vincent: Mr. Speaker, in the same period, the demand for business and services in this country increased faster than production. This means that more Canadians were seeking more goods and services than
Canadian companies could manufacture and sell. It is all part of the law of supply and demand, and in this case there was more demand than supply.
What happens, Mr. Speaker, when demand is greater than supply? It leads to what we call inflation. We experienced that in 1981-1982.
There are two ways to resolve the inflation problem. We could let it be and then all of a sudden, wake up to raise the interest rate to 22 per cent. That is what I call the Liberal way.


Guy St-Julien: It's true. That is what they did.


Pierre H. Vincent: It hurts everybody, it causes bankruptcies, and it creates a recesssion as the dictionnary would have it.
There is another way, Mr. Speaker. When the inflation rate, which should normally be at 3.5 per cent reaches 6 per cent, we must raise interest rates so that the demand for goods and services decreases as regards to supply. That is the right way to do it. And that is the way we did it.
Just to give you an idea, Mr. Speaker, labour costs in 1989 were 6.6 per cent higher in Canada than in most industrialized countries. Consumer mortgage borrowings have increased by 17.1 per cent in 1990 over 1989.


An hon. member:: Where is that?


Pierre H. Vincent: That is what happens, Mr. Speaker, when too many people want goods and services. To answer the hon. member's question, even though he has no right to speak- I let them speak, but I will show more courtesy than they did, I will answer their questions right away. Inflation, Mr. Speaker, is rampant from Newfoundland to British Columbia. And inflation has increased in every province of this country. Now, I hope you will have the courtesy to let me continue.
Mr. Speaker, a too rapid drop in interest rates would rekindle the inflationist outburst that we have experienced and that we are begining to overcome, fairly well I might add. Hence the importance of pursuing the monetary, economic and fiscal policy set out by the Minister of Finance. Thus the importance, Mr. Speaker, of trying our best to make them understand. I know it is difficult. I have been trying for six years to put certain principles, certain figures into their minds to make sure they are

able, at last, to explain to their constituents the economic problems of the country.
Mr. Speaker, obviously everybody would like to see interest rates coming down. But I think if we want a normal interest rate in this country, we need a normal rate of inflation. A normal rate of inflation means that Canadians should not ask for more goods and services than the country can produce. This means that everybody should cooperate. Therefore, I urge the opposition today to get aboard the train of economic realism for the country's sake and to tell their constituents and their provinces: "Please, cut your spending". The only government which, since 1984, did not increase its spending is the Canadian government.


Vincent Della Noce: The Conservative government.


Pierre H. Vincent: Our operating expenditures, Mr. Speaker, have not increased since 1984. How many industries, provinces or individuals have not increased their spending since 1984? Not very many, Mr. Speaker. At the same time, we managed to move 800,000 people above the poverty line. We created 1,600,000 jobs. Those were the results of the 1984 economic statement of the Hon. Minister of Finance, which we continue to implement. Canadians, whether provinces, companies, individuals or the opposition, must realize that.
Allow me, Mr. Speaker, to tell what happened in my riding over the weekend. I met one of my constituents who had come to Ottawa the week before. She was walking on the sidewalk and she fell down. She was looking at the Parliament building when she fell. Somebody helped her get back on her feet. She turned around and saw it was Mr. Chretien. She recognized him and said to him: "Mr. Chretien, what can I do to thank you for helping me get back on my feet?" And Jean Chretien answered: "Well, madam, you can vote for me in the next election." She said: "Listen, I may have fallen on my buns, but not on my head, Mr. Chretien!"
Mr. Speaker, since 1984, this government reduced the deficit by 10 billion dollars. Our federal expenditures, Mr. Speaker, were growing at a rate lower, annually, than the inflation rate, even with the growth in all the statutory programs.
Supply
We have been doing since 1984 what no Minister of Finance did in twenty years of Liberal government. Not one of them! Old leader, new leader, they all increased expenditures, but they never actually managed the country. What we have now is a realistic monetary and tax strategy which is good for Canada. You know what is wrong with it? It is blocked by a bunch of non-elected senators who think they own the Senate. They do not, Mr. Speaker. They are non-elected members and I challenge all the Liberal senators to come and run in our ridings-I will be kind, in the Quebec ridings only- against Conservative members of Parliament with their policies for a platform. Imagine, their own leader went to New Brunswick to run. But since he is in the middle of an electoral campaign, I will spare him. We were gracious. We have no candidate running against him to make sure he will be elected.
Mr. Speaker, it is inadmissible that people who are not elected attempt to implement a program which was defeated in the 1988 elections by the people who wanted to get elected. The Minister of Finance pointed out again today that the Liberals were taking a stand against the GST in their 1988 electoral platform. The Liberals were not elected. Why? Because the Canadians wanted free trade because it is excellent for Canada, because they wanted a real leader, because they wanted a real Finance Minister and because they wanted tax reform. There is a piece of legislation presently blocked in the Senate which provides for all large Canadian companies to pay their fair share of tax. The non-elected Liberal senators don't even have the decency to pass that bill. And then we are told the Conservative Party is the one that represents large corporations! No, Mr. Speaker, it is not the Conservative Party but Liberal senators, the Liberal Party with MacEachen who is associated with the Bank of Montreal, and so on. Such is the situation in our country.
We must be realistic. My message to those senators, the one Canadians and the people from the riding of Trois-Rivieres asks me to deliver, is to sit down, to talk sense, to state their position calmly to the population and then to respect-


The Acting Speaker (Mr. DeBlois):: The hon. member
for Parkdale-High Park on a point of order.

Supply


Jesse Philip Flis: Mr. Speaker, I rise on a point of order. I draw the hon. member's attention to Standing Order 11(2). Attention has been drawn to this before. It states:
The Speaker-after having called the attention of the House, or of the Committee, to the conduct of a Member who persists in irrelevance-
I am standing on a point of order of irrelevance and repetition. The motion clearly states:
That this House condemn the Government for planning and implementing the first ever made-in-Canada recession.


The Acting Speaker (Mr. DeBlois):: Order, please. I am sorry- The hon. member for Sherbrooke on a point of order.


Jean J. Charest: Mr. Speaker, I rise on the same point of order. After listening to my colleague from Parkdale- High Park, I just wanted to bring to your attention the fact that other members of the House were here, including himself, when the member for Hamilton East in her speech brought up the point about the Senate and Senate opposition. I just wanted to bring to your attention that I do not remember the member for Parkdale- High Park getting up at that time.


Some hon. members:: Hear, hear.


Jesse Philip Flis: Point of order.


The Acting Speaker (Mr. DeBlois):: On the same point of order?


Jesse Philip Flis: Yes, Mr. Speaker, in reply to the hon. member, if he was on his toes he should have raised irrelevancy at that point. I was in committee and not in the House. I could not have raised it at that point. Unfortunately, the hon. member fell asleep.


The Acting Speaker (Mr. DeBlois):: So, I want to put an end to this, because we might get bogged down in a debate. I repeat this is a matter of opinion. Only 30 seconds left to the hon. Parliamentary Secretary to the Minister of Finance.


Jean J. Charest: Point of order!


The Acting Speaker (Mr. DeBlois):: The hon. member for Sherbrooke on a point of order.


Jean J. Charest: Mr. Speaker, I am sorry too, because I do not want to extend the debate unnecessarily.

The member just alluded to the fact that I was in the House, but asleep. That is totally false. I was here very much awake and awake enough to know that the hon. member for Parkdale-High Park was here. I resent that allusion, Mr. Speaker. I want the record to be corrected.


Pierre H. Vincent: Mr. Speaker, I will conclude the same way I started, by saying how glad I am to see we awakened them a bit this afternoon. I told you, Mr. Speaker, at the beginning of my speech, that they would not like what I was about to say, because the truth always hurts. What I did, Mr. Speaker, is review the events since 1984 with an emphasis on all the stupid things the Liberal senators did. Mr. Speaker, I thank you.


Mrs. Shirley Maheu (Saint-Laurent-Cartierville):: Mr. Speaker, the hon. member said that the truth hurts, but considering the kind of things he has been mentioning, he doesn't seem to have much to say.
When they make speeches in the House, they make jokes about anything, including the Senate. When will this House realize that Quebecers will no longer be fooled? It just won't work any longer!


Some hon. members:: Oh, oh!


Shirley Maheu: You are Quebecers, but let me-Mr. Speaker, I want to finish!


An hon. member:: That was a big mistake!


The Acting Speaker (Mr. DeBlois):: I would ask hon. members to show some understanding and co-operation.
The Hon. Member for Saint-Laurent-Cartierville has the floor.


Shirley Maheu: Obviously, those 15 per cent still seem to bother you quite a bit, and that's the truth, Mr. Speaker.
When they bear down hard on the Senate-all Quebec members do that because they know the Senate isn't


October 15, 1990

particularly popular in Quebec. So why didn't this government abolish the Senate if it hates it so much?


Some hon. members:: Oh, oh!


Shirley Maheu: I think they should come out and admit, once and for all, that all these government members are trying to do is to distract us from the main issue, which is the GST. The issue is not the Senate. You are just using the Senate to fool the public. They are using the Senate as a crutch, and meanwhile-


Pierre H. Vincent: My father used to say, don't spit in the wind!


Some hon. members:: Oh, oh!


Shirley Maheu: Mr. Speaker, on a point of order.


The Acting Speaker (Mr. DeBlois):: The hon. member wishes to raise a point of order?


Shirley Maheu: Yes, Mr. Speaker. May I ask why I was not allowed to finish?


The Acting Speaker (Mr. DeBlois):: Several members have asked to speak. However, if you wish, you may finish your comments or question, but please be brief.


Shirley Maheu: should like the hon. member for Kamouraska-Riviere-du-Loup to tell us-


Some hon. members:: Oh, oh!


Shirley Maheu: Is that not you on the other side. I am looking for the name of your riding.


Pierre H. Vincent: Trois-Rivieres.


Shirley Maheu: Trois-Rivieres, good.
How many jobs have been lost in the Greater Montreal region in the past year and a half? Nobody talks about that. Now about job creation, can we talk about the quality of job creation and begin telling the truth to the people of Canada?


Pierre H. Vincent: Mr. Speaker, I might repeat what I said about spitting in the wind. That is what my father used to tell me.
Supply
First, Mr. Speaker, concerning the abolition of the Senate, I will try to give my colleague from Saint-Laurent-Cartierville a two-minute law course.
First of all, to abolish the Senate, Mr. Speaker, Quebec would have to be part of the Canadian Constitution. In 1981, thanks to the Liberal Government, Quebec was'excluded. In 1990, thanks to the Liberal Leader who, during the Convention, embrassed Clyde Wells, the Liberal Premier of Newfoundland, Quebec was again excluded. Under the circumstances, they should not talk to me about the need to abolish the Senate, for it is because of the Liberals if the Senate has not been abolished, because the Prime Minister of Canada had offered it.
Mr. Speaker, they just cannot accept that. The Prime Minister of Canada offered it, but the Provincial Liberals in Newfoundland, and later the Federal Liberals did everything they could to torpedo the Meech Lake Accord and hurt Quebec. That is my reply to your question about the abolition of the Senate. Carry on this way, you are doing fine, it is a brilliant performance!
To reply to the other question raised by my friend the Hon. Member for Saint-Laurent-Cartierville concerning job creation, I will say that between 1981 and 1984, nearly 100 000 jobs were created every year, including 75 per cent which were temporary. And you know what "temporary" really means: you are hired for three months to paint fences. You are hired for six months to cut grass, even in Winter. Such was the type of jobs created between 1980 and 1984.
Between 1984 and 1990, 1.6 million jobs were created, 80 per cent of which were high quality permanent jobs. And I challenge the Hon. Member for Saint-Laurent- Cartierville to come and see for herself! First of all, if she did not know that I represent the Trois-Rivieres riding, now she does. I challenge her here and now to come and visit Trois-Rivieres to see that we have indeed lost jobs, but that we have created a great many new ones, so that the net balance is positive.


An hon. member:: Canadair is in her riding.


Pierre H. Vincent: Such, Mr. Speaker, is the economic reality.

Supply


The Acting Speaker (Mr. DeBIois):: Before I recognize the Hon. Member for Prince-Albert, I will allow the Hon. Member for Saint-Maurice to comment briefly.


Denis Pronovost: Mr. Speaker, I listened very carefully to the hon. member for Trois-Rivieres, and I tried, on the basis of what he said and what was said by the hon. member opposite, the hon. member for Hamilton East, who said that the Parliament of Canada had to reject the GST because 85 per cent of Canadians were against the tax- that is her reasoning, her way of seeing things. I would like to know whether the hon. member for Trois-Rivieres agrees, because if we were to ask Canadian citizens tomorrow morning whether they are for income tax or if we polled Canadians on this issue, they would say no. If we asked Canadians: Are you in favour of provincial sales tax in Quebec, what would they answer? If we asked Canadians: are you in favour of a tax on gas, what would they say? The Liberals put a tax on gas, and they introduced quite a few tax increases.
Canadians didn't agree, but the Liberals had to run the country. They didn't do it the way they should have done, but they did it just the same. If you ask people who smoke whether they agree with the tax on cigarettes, of course people don't agree. So I would like to ask the hon. member for Trois-Rivieres how else one can run a country with an annual budget of $147 billion? How can one do that if one listens to the rhetoric of the hon. member for Hamilton East? Do we abolish all taxes and income taxes and leave Canadians without the wherewithal to govern themselves?


Pierre H. Vincent: Mr. Speaker, an excellent question as usual, from the hon. member for Saint-Maurice.
Mr. Speaker, I am sure you will agree that not a single member in this House, including yourself, with respect, likes income tax and taxes. There is not a single person here who likes taxes, and no one in this country does. However, although we do not like taxes and income tax, we like the services provided by the federal government, which the government, headed by the Conservatives, wants to keep giving to those who are in need in this country. That is why, Mr. Speaker, it is important to have the GST in order to create jobs and put Canada back at the same level internationally as all other countries. As for the hon. member for Hamilton East who said that
since 85 per cent of Canadians were against the GST, we had to be against it as well, then, according to her logic, should we abolish beds just because 85 per cent of the population dies in bed?


The Acting Speaker (Mr. DeBIois):: There is one minute left for questions and comments. The hon. member for Prince-Albert-Churchill River will have 30 seconds and the hon. member for Trois-Rivieres 30 seconds to answer.


Mr. Ray Funk (Prince Albert-Churchill River):: Mr. Speaker, it is hardly surprising that 85 per cent of Canadians do not believe this government and would not vote for it if there was an election when the member says that Canadians should reduce their expenditures when they are losing their farms, their homes and their businesses.
I would like to ask the member these questions: Does he agree with his Minister of Finance that in fact there is no recession in this country? If he agrees with his Minister of Finance, at what point does he think a recession would be starting, how long does this have to keep on going, and if there is a recession, what kind of policy changes would he like to see?


The Acting Speaker (Mr. DeBIois):: The hon. member for Trois-Rivieres, very briefly.


Pierre H. Vincent: Mr. Speaker, no, there is no recession. Yes, there is an economic slow down. When is there a recession? When there are stupid policies like those we had in 1981, then, there is a recession. It is only in those circumstances that we have a recession.


The Acting Speaker (Mr. DeBIois):: Questions and comments are now over. The hon. member for Ottawa South has the floor.


Mr. John Manley (Ottawa South):: Mr. Speaker, I am pleased to be able to participate in this debate.
I must say I have listened to many speeches in this Chamber over the last year and a half or almost two years. Had I been able to be recognized on question and comment with respect to the previous speech, I think it is the first one on which I could truthfully say that it was so

partisan, so bombastic and so vacant of meaning that it would not have been worthy of comment.


An hon. member:: The Pope has spoken.


John Paul Manley: I can see the hon. members opposite agree with me.


The Acting Speaker (Mr. DeBlois):: Order, please! I will again ask for the cooperation of all the members of the House so that I can hear, and above all that the public can hear the remarks of the hon. member for Ottawa South.


John Paul Manley: Thank you, Mr. Speaker. I know that you are eager to hear what I have to say, if not the members opposite.
I have two real concerns that I would like to express about the situation that we are in today in Canada.
One relates specifically to the resolution that is before us. We are in a period of very significant economic difficulty in Canada. We have a very high rate of unemployment. Many jobs are being lost. Over 1.1 million Canadians are out of work. Even in my area of Ottawa, which is often thought of as being fairly impervious to recession, one of the local workers for the regional municipality social welfare agency told me that his level of case work since last year has gone up with a constant number of workers in his office. It has gone from 90 cases in August 1989 to 130 cases in August 1990. There has been a very significant increase in people seeking the assistance of the social agencies even in the national capital, a fairly affluent area. Consequently, job loss is a very real concern.
The other concern that I have is I think best expressed by the cover story that ran in Maclean's magazine about two weeks ago. It said: "How Much Can Canada Take?" I think that is a good question for us to ask ourselves at the present time; how much can Canada take?
As we watch the implementation of the goods and services tax being debated down the hall from us and as it involves Canadians from everywhere in this contentious issue day after day, I see an erosion of our willingness as a people to voluntarily comply with government mea-
Supply
sures, particularly government taxation measures. I believe that the real battle over the GST for the government opposite is not what it went through in the House of Commons. It is not what is occurring down the hall in the Senate. The real battle for the compliance with the GST is going to be at the level of whether or not Canadians actually do pay the money they are asking them to pay, if and when this tax is ever implemented.
I have been very vocal and very clear in the reasons for my opposition to the GST. Our system of taxation does require voluntary compliance and, in failing to consult and to consider the views and concerns of the Canadian people in implementing this tax, this government runs a risk of undermining the integrity of our entire system of taxation by provoking in our people a tax revolt such as we have never seen in Canada in the past.
We have to look at the credibility of the minister as part of the problem that underlies the government's situation at the present time. He stood here earlier today and talked about how based on democratic principles he believed that he was entitled to have this tax passed, and I think he relied in saying that on the results of the 1988 election. I find myself listening to that. It is a compelling argument. It is an important argument that a government that is elected has the right to do what it put forward to the people, what it has a mandate to do. It has a mandate to govern, but I fear the minister has pushed his point too far.
There surely have to be some limits on what a democratically elected government can do. We know there are some now under the Canadian Charter of Rights and Freedoms. The charter itself imposes a limit on what governments can do. I am not saying that the charter limits the implementation of this tax, but I am saying that there are limits on the right of a government to pass laws in Canada. That is fundamental. We can surely all agree on that.
Are there other limits? Are there limits imposed either by other law or by convention, or by limitations that are imposed by the very nature of a democratic society? That is the question that I have been struggling with myself. It is the answer to that question which either justifies or fails to justify the action that the Senate of

October 15, 1990
Supply
Canada is taking in opposing this government's measures.
I believe that the minister is wrong in saying, essentially as he has said, that by winning the 1988 election he has a four or five year dictatorship, the right to do anything he wants in Canada. I do not agree with that.
I think that there are clear limitations. The government's job is to persuade the people of Canada that the policies they are pursuing are right. Now you cannot always persuade everybody that what you are doing is right. Maybe you cannot even always persuade a majority of the people that what you are doing is right, but where you have, as in this case, a vastly overwhelming majority of the people opposed to a measure that you are proposing, you at least have to stand back and say: "My gosh, have we got it wrong? Have we got it wrong?" I think they have, and I think that the Senate has support from the people of Canada in defending them, the people, against these measures proposed by the Minister of Finance.
The government has got it wrong. It has crossed that line over which governments in a consensual society must not go. They must always remember that they are put there by the people. They are answerable to the people. Their obligation is to bring the people with them on an issue. The senators are the only ones in this whole government system we have here on Parliament Hill who are actually responsive to the people at this point in time.
What about the minister's credibility? He talked about how his mandate flowed from the 1988 election. Right in the middle of the election campaign the chairman of the Standing Committee on Finance, the member for Mississauga South, put his foot in it as he sometimes does, but he always speaks his mind. He speaks honestly, openly and frankly, something that we would love to have from the Minister of Finance, just that kind of attitude.
He said that if this GST were implemented it would raise about $10 billion more than the government was predicting. The Minister of Finance chopped his head off so fast that it rolled all the way from Mississauga to Lake Ontario.
We now know that the hon. member for Mississauga South was right. He was right. The minister did not want to tell Canadians what this tax was going to cost them. In
the campaign, sales tax was there as part of the program, phase two of tax reform. There is no question about that. But he was proposing a national sales tax that would be at once visible, fair, and revenue neutral.
That he has a mandate to do this from the people is in question for a good reason. If the people believe that any time they go to the polls they are electing just a dictatorship and a tin-pot dictator, what is the use of having elections? What is the use? If governments are not going to be responsible and answerable to the people who elect them, what is the use of having elections?
Did he bring forward a GST that met the measure of the test that he put himself in the election campaign?


Some hon. members:: No.


John Paul Manley: No, he did not.
Is it revenue neutral?


Some hon. members:: No.


John Paul Manley: No. It is going to reduce the deficit. He said that today. How can it be revenue neutral and also help the government's fiscal situation. I do not understand that one.
Is it visible?


Some hon. members:: No.


John Paul Manley: No. He has changed it so that only if the retailers are really able to comply with that, will they be visible, but they can find other ways. All they are going to have to do is post a notice stating: "By the way, did you know you paid the GST?" The consumer will not necessarily know how much he or she has paid.
Is it fair?


Some hon. members:: No.


John Paul Manley: No. My colleagues agree with me. It is not fair. Is it fair that northerners in the farthest reaches of Canada, in Peace River for example, have to pay the GST on transportation costs that are included in the cost of the goods they buy in those remote territories?


Some hon. members:: No.


John Paul Manley: The MST is a terrible tax. We all agree with that, but at least we can say this for the MST. If goods are produced in Toronto, the person who buys it in Toronto pays the same amount of MST as the person

Supply
who buys those same goods in northern Canada. With the goods and services tax, that will not be true.
Is it fair that the credits for low income Canadians are not indexed to inflation?


Some hon. members:: No.


John Paul Manley: No. Is it fair that for families who earn more than $30,000 a year in Canada-not a lot of money at all-that it is regressive for those people, and the minister accepts this? That is not fair.
Have we got a fair tax? No. A visible tax? No. A revenue neutral tax? No.
Did the Minister of Finance ever get up and explain to the Canadian people during the course of the last election campaign, in an open, frank and honest way, what he intended to do with his phase two of tax reform?


Some hon. members:: No.


John Paul Manley: No. Has he got a mandate from the people of Canada to shove this down their throats?


Some hon. members:: No.


John Paul Manley: No. And thank goodness the Senate of Canada is reminding him that we have under our Constitution a bicameral system and that he has to consult with the Senate.
What was the government's mandate? Mr. Speaker, you will remember its mandate. It used it in 1984 and again in 1988: jobs, jobs, jobs. That was its mandate.
What we face in Canada right now is not only 8.4 per cent unemployment and not only the fact that the Conference Board has indicated a potential of a 9 per cent unemployment rate by early next year, but that we have over 1.1 million Canadians out of work.
I support the policy of jobs, jobs, jobs. When a government is elected, its first fundamental priority should be to address the need of its people to work. If there is a trade off, and some of the economists can debate this, between inflation and unemployment, we should go for jobs every time. The tragedy of the high interest rate and high dollar policy this minister has followed is that it will only work if it creates unemployment. It is working because it is creating unemployment.
The government is looking for suggestions. I would like to give it some suggestions. I suggest that it bring in a new budget. I think it is clear that the numbers presented in the February budget were inadequate. The minister himself has admitted that, not in the House. He chose to address the Canadian Chamber of Commerce to say that. He did not tell the House that he was wrong. I say the numbers are wrong and we need a new budget.
A key part of that new budget should be the announcement that pending further discussion and consideration, the goods and services tax will not be implemented. If this was a bad tax before, this is a terrible tax at a time when the country is sliding into a recession. It is a terrible tax at a time when consumer confidence is very low, businesses are closing and people are out of work. To add that 7 per cent burden at that point in time is totally and absolutely wrong. This is the time to stand back and say that we need to look at this again. Is this the time to implement a new consumer tax in Canada?
We also need to look at the process of tax reform and the burden distributed between corporations, the cost of doing business, and consumers in Canada. The consumers have been paying their income tax. The real consequence of this shift from the manufacturers' sales tax to a new value added tax is that about $5 billion to $6 billion in existing tax paid at the corporate level as part of the cost of doing business is being shifted downstream to individual Canadian consumers. That is a very large tax increase to put on the backs of Canadian consumers at the point in time when 1.1 million are unemployed, their confidence is down, retail sales are down, housing starts are down, car sales are down, every indicator you can think of is down. What a time to do that. That should be the government's program.
What about its longer term program? It takes a great deal of pride in the things it cuts. I think it is time it start to think about where it needs to invest.
The real problem we face in this country from the point of view of employment is pretty well set out in the recent report of the Economic Council of Canada. It talks about the changing job pattern in Canada. What we face in Canada-and it has nothing to do with parties-is reality. We face the deindustrialization of Canada. We see that Canada is increasingly unable to hold those

Supply
lower paying or even some of the higher paying manufacturing jobs.
If we are to succeed in the future, we have to pursue policies which promote science and technology and scientific research and development. We need to invest in education, in forward-looking jobs that add value and creativity in Canada. We can no longer expect to survive on our base of industry that is old. We can no longer expect to prosper in the world based solely on the sale of our natural resources. I think that the government should bring forward a twofold economic strategy; one addressing the fact that they are creating a recession in this country and have done so by creating very high unemployment, and at the same time to bring forward a plan for building a new class of high paying, useful jobs that will move us forward into the future as a nation that is committed to the welfare of its people and a clean environment.


Jean J. Charest: Mr. Speaker, I was interested in the remarks of the member for Ottawa South since he was quoted in The Ottawa Citizen of October 13. I thought his comments were fairly reasonable. I will get to them later.
I must admit that I am very disappointed in his speech. During questions and comments he may want to make some comments about that because I know he is one of the members of the Liberal Party of Canada who is promised, apparently according to people in his own party, a good future, a brilliant future. I think I even heard somebody say that he may be a leadership candidate. That could be a compliment in certain circles, except that in the Liberal Party of Canada at least half of the caucus consider themselves to be leadership material.
I would have expected a speech that was a little more consistent in the area of democracy. I do not think that the speech by the member for Ottawa South will be remembered as one of the most brilliant moments of his career in so far as describing what democracy is about. Now is the time when all members of this House who are concerned in any way at all with the basic precepts and principles of democracy must denounce with all their energy what is going on in the Senate of Canada today. To speak of dictatorship at this time, Mr. Speaker, you would have to speak of the dictatorship of unelected federal Liberals who refuse on a money matter to accede to the democratically elected will of the House of
Commons of Canada. That is revolting, it is unacceptable. The member for Ottawa South should take the first opportunity to get up in his place and denounce that as being unacceptable.
I have a simple question for the member for Ottawa South. What is the position of the leader of the Liberal Party of Canada concerning this. I will tell you why I am asking this question, Mr. Speaker. Because we do not know.
What we know is from the same article in The Ottawa Citizen of October 13, 1990, entitled, "Who is in charge?". I will not cite the article verbatim, but it states, "The leader of the Liberal Party, Mr. Chretien, today said during the Liberal leadership race that it would be irresponsible to axe the GST if we did not have an alternative". I have yet to hear today from the Liberals what that alternative would be.
But then later on he seemed to change his mind. He said, "I have my own personal opinions but I am not alone in the Liberal Party of Canada". I have news for him. He is really not alone in the Liberal Party of Canada.
He then went on to say that he did not know what the Senate was going to do. Then he said, "Well, they will not do anything that I don't want them to do", and today we still do not know where the leader of the Liberal Party stands on this.
I want to finish by citing the member for Ottawa South who said that he supports the Senate's efforts. That is what he said, and it is consistent with his speech today, but he is worried that in the battle for public opinion kazoo blowing might very well cost the Liberals support.
It seems the applause has stopped on the other side.
He went on to say, "I personally find the antics of obstructionism offensive and I don't believe that most Canadians want that to be the way their public policy is decided". He is obviously talking about the way the federal Liberals are behaving. Could he tell us today whether he still stands by that quote in The Ottawa Citizen of October 13?


John Paul Manley: Mr. Speaker, I hope you will give me adequate time to respond to a very long statement by the former minister. I am a little disappointed in him as well. I have high regard for him, perhaps as a potential future leader of his party. I thought by and large he had comported himself in his very significant responsibilities quite well. I do not think that this is necessarily the best
October 15, 1990

time to be extremely partisan. I did not mean my comments in an extremely partisan way.
I do not think that what I said today is inconsistent in any way with what I was quoted as saying in the paper-which is an accurate quote. Any thoughtful Canadian would probably feel the same way.
I have regard for the situation that we are in. I think the remarks that he refers to Mr. Chretien making should be regarded in the same way as well. This is an unusual situation where the Senate is opposing a government bill. That is clear. I do not think that is a surprise or mystery to anybody. It is a very significant departure from practice in Canada that that is happening. Very significant.
The question really is, is the Senate justified in the circumstances to do what it is doing? That is really what I was trying to address, not in a partisan way but really in a philosophical way as someone who is very concerned about the situation we have in Canada-the status of our institutions, the respect that our people have for the institutions and what is happening.
I am sure I do not need to remind my friend of this quote by a Greek philosopher who said 2,000 years ago: "If we are to have freedom, our politicians must do what we want them to do". I acknowledged in my speech the difficulty of establishing that in a pluralistic society, but in this case they have succeeded in persuading only about 15 per cent of the people that what they want to do is right.
Can it be right that a government which was not elected on a mandate of putting in this particular tax, as I think I demonstrated in my speech, as opposed to a government that was elected because of a campaign that was very much focused on another issue and was voted for by about 43 per cent of the population of the country, really claim that they have the legitimate authority to override the will of 85 per cent of the population with a measure?


An hon. member:: Absolutely not.


John Paul Manley: I think there is a limit.


An hon. member:: That is right. And you reached it.


John Paul Manley: And you have crossed it.
Supply


An hon. member:: They surpassed it.


John Paul Manley: They crossed it and what they are doing, Mr. Speaker, is wrong.
Now if we have a system where we have a House of Commons and a Senate in this country, which we do, then it is necessary for the leadership in the House of Commons to take into account the views of the Senate.
In six years, what has this government done to significantly reform the Senate? Nothing. Nothing.


Some hon. members:: No, no.


An hon. member:: They did, they added some 20-odd senators.


John Paul Manley: Even what they proposed in the context of Meech Lake-


An hon. member:: They never got it through.


John Paul Manley: -did not reform in one way the powers of the Senate, -so I presume since the government advocated those reforms of giving the provinces the right to appoint the senators, that it must have thought that the powers the Senate has under the Constitution were adequate.


An hon. member:: Yes. Absolutely.


John Paul Manley: The only reform that they have brought about with respect to the Senate is to increase it by eight members.
I might add in conclusion, Mr. Speaker, that at the very least, this government has the obligation to ask the Supreme Court of Canada whether it had the authority to add eight senators to the Senate. If not, then it should not be proceeding in the way it is and it should be taking into account the views of the Senate as the Constitution of Canada requires.


The Acting Speaker (Mr. DeBlois):: I will allow very briefly, because we only have one minute left, 30 seconds of questions to the hon. member for Prince Albert- Churchill and 30 seconds for a reply from the hon. member for Ottawa South.


Raymond John Funk: Mr. Speaker, I admired the somewhat unsuccessful attempt by the previous speaker to be non-partisan, in contrast to his colleague for Hamilton East who suggested that the

October 15, 1990
Supply
New Democratic Party had not campaigned vigorously enough against free trade and that is why we had a majority Conservative government.
I would like to remind the members of the Liberal Party that there are 12 more New Democrats in this House than there ever have been before. We more than held our traditional turf and the fact that the Liberal Party was unable to do so is the reason we have a majority government.
Nevertheless I would like to ask the hon. member a simple question. If the Liberal Party has been so absolutely and so consistently opposed to the goods and services tax in both Houses, why did not the senators kill the GST on May 3, 1990 at second reading, when they had the opportunity to vote against it in principle.


John Paul Manley: I think the Senate has proceeded with this legislation in the most responsible way, by considering the views of Canadians before deciding what it should do with it. I am sure the New Democratic Party has no objection to the fact that the Senate committee on banking and finance travelled from coast to coast in this country and heard the views of the Canadian people. And having heard the views of Canadians, they were able to assume the authority which, unfortunately, was thrust upon them by the government, through its irresponsible actions in forcing this down the throats of Canadians.


Mr. Scott Thorkelson (Edmonton-Strathcona):: Mr. Speaker, I welcome the opportunity to speak on this motion now before the House.
Taken at face value, this motion appears to be about the government's economic policies and the supposed results of those policies.
What this motion really represents is the opposition's vested political interest in exploiting the gloomiest side of any and every economic issue. That is why the opposition is so desperate to have a recession declared before the full evidence is available. That is why it is so eager to turn the possibility of a mild recession into something far, far worse.
If the members opposite were weather forecasters, they would tell Canadians that if it's cloudy today, it means showers turning to steady rain, and then to torrential downpours, hurricanes, cataclysmic floods, and a huge upsurge in the ark division of the shipbuilding
industry. In fact, I can see rain clouds over the hon. members' heads on the opposite side. A little common sense perspective is really what is needed here today, not the opportunistic rantings we have heard about the economy from the opposition.
The fact is that the Minister of Finance made clear in the budget in February that the economy was in for a difficult year after several years of strong economic growth at a rate beyond the capacity of our economy to sustain. As the minister acknowledged in the budget, the possibility of negative real growth for at least one-quarter was very real as the economy and inflationary pressure that had built up were cooled down.
The opposition knows full well that this is the same basic pattern of economic readjustment that has followed every other time in which our economy has exceeded its growth capacity for an extended period. What the opposition does not seem to understand is that by acting firmly today, sooner rather than later, the government is ensuring that we avoid a deep and protracted recession. Have the members opposite already forgotten the devastating experience of the 1981-82 recession? The government has not forgotten its responsibility to see that that does not happen again.
I would like to point out to members opposite that if we had a recession in Canada in 1981-82, we had a depression in Alberta. The National Energy Program, in combination with the economic policies of the Liberal regime at that time, resulted in 45,000 to 60,000 people losing their jobs. People had to forfeit their homes when land prices dropped. Their mortgages were $10,000, $15,000 and $20,000 higher than the value of their houses. At that time, the Liberal government literally pillaged $20 billion a year for five years during the time one of the worst recessions that we have seen in this century. That is why the Liberals ran fourth in my riding. We have not forgotten that. If anyone knows what a recession is, it is the members opposite. It is a veritable depression which was created by them in the province of Alberta.
The motion before the House serves one useful purpose. It provides an opportunity for me to talk about the policies that the government has been planning and implementing since it came to office in 1984.

Our policies have dramatically expanded the economy's potential to grow and create wealth over the last six years. This is the result of consistent, comprehensive action by the government to bring the national deficit under control and to free the private sector from structural barriers and burdens that impeded its efficiency and ability to compete.
The opposition talks about the need to preserve and create jobs. To do this, of course, we must be competitive. One of the prerequisites to ensuring our competitiveness is a stable, healthy, economic environment that encourages productive business investment. That is why the overriding agenda of the government since 1984 has been to create a more favourable economic climate for business by taking action in areas where we have a direct impact on the economy and where we can achieve the greatest long-term benefits.
The first of these areas has been to take action to reduce the deficit. Fiscal soundness is key to our competitiveness because it will free up domestic savings needed to finance the deficit. These savings then can be channelled into more productive investments, creating a more efficient and vibrant economy. That is what it is all about.
We have made significant progress in this regard. We have cut waste and inefficiency in operations of government. The size of the Public Service has been reduced by 12,000 person-years to the level it was in 1973. I hasten to add that our population in Canada has grown 20 per cent in this time. Government is responding to greater problems, greater challenges, and we have done it very, very well. The number of Crown corporation employees has been reduced by 75,000 people, partly through privatization, and partly through greater efficiency. Today the cost of operating the government is virtually the same as it was six years ago.
We have been successful in forcing the federal government to live within its means on the operating side. When we first came to office the federal government was spending $16 billion more than it was taking in. Last year we had a $10 billion surplus-


Some hon. members:: Oh, oh.


Scott Jon Thorkelson: -on the program spending side and we expect a $14 billion operating surplus this year.
Supply


Mr. Merrithew:: They don't know what a surplus is.


Scott Jon Thorkelson: No, they don't. They have never had one-deficit financing for years and years and years, average increases of 14 per cent for them for about 20 years.
Our control over growth of the national debt takes longer to apply. In 1984 we inherited a $200 billion debt. It was accelerating at a rate of $22 billion a year. Now it is over $300 billion, but I should remind hon. members opposite that 80 per cent of that is compound interest on compound interest on the Liberal debt. In effect, it is a Liberal debt that we are saddled with and which we must take care of.
By 1994-1995, our financial requirements will be in surplus. That means that within five years the government will be able to start buying back its bonds and treasury bills. The country will be on a clear path to reducing its debt substantially.
Consider how far we have come compared with other major industrialized countries. In 1984 Canada's deficit on a national accounts basis was 50 per cent higher than the average of the G-7 leading industrial countries. Now it is down to seven-tenths of a percentage point above the G-7 average. On the expenditure side, our performance in reducing program expenditures is better than that of both the U.S. and Mrs. Thatcher's United Kingdom.
I would like to point out that in his speech the member for Ottawa South was talking about investments.
He laughs now when we talk about reducing program expenditures, but he said he wants to add to the deficit. He wants to invest in the economy. Where is this money going to come from? We would have to borrow. He would borrow and borrow. He would create the debt which slips away from us. We would spend more and more on interest payments every year. It is the biggest component of government expenditures to date: $41 billion. He wants to add to that, rather than having a good program of controlling expenditures and putting money in the right places at the right time.
Our objective is to get the deficit down in order to reduce interest payments on a debt to an ever-dwindling fraction of the total budget. Achieving this will provide more savings for productive investment and will create wealth and jobs for Canadians. In short, it will make the economy more competitive, and that is what our pro-

October 15, 1990
Supply
gram is all about, making our economy more competitive.
Along with our work to control government spending, we have moved to strengthen the ability of the private sector to compete and create a bigger economic pie for all Canadians.
When the members opposite were in government, all they talked about was redistributing wealth. We want to create wealth, growth, productivity, and greater numbers of jobs.
We began six years ago by transforming a chilly investment barrier into a positive screening and review mechanism. Investment Canada is now fostering a friendly, receptive, and helpful investment plan.
We have also moved to strengthen and improve the climate for free enterprise through new business framework legislation that safeguards fair competition. The new Competition Act is providing long overdue stability to the competitive environment. Similarly, amendments to the Patent Act have strengthened intellectual property rights. What have these three measures done? They have brought new jobs and new investment all across the country. We have seen a tremendous amount of investment in Alberta because of these measures.
In the riding that I represent-a university riding-because of the Patent Act, we have seen new investments in pharmaceutical research and other things. It has been very good for our economy.
We have been overhauling and reforming Canada's regulatory framework. Wherever possible, we are eliminating unnecessary restrictions, and we are discouraging new regulations that are not essential. Every day, the opposition calls for new regulations to damper down the economic forces in our economy. These are wrong measures. Perhaps most dramatic has been the deregulation of the energy and transportation sectors permitting a more market oriented and market driven approach.
Less than three weeks ago, we tabled in the House our policy and proposals for updating financial sector regulation to ensure that Canada continues to have a healthy, competitive financial sector. In doing so, we are building on one of the most sound and reliable financial systems in the world. We have a strong deposit taking system. We have a large capital market, and we have world-scale life
insurance companies. We possess the ability to finance our capital requirements in a very effective and efficient way.
Another way in which we are reducing the government's role in the economy is by selling government owned Crown corporations to private interests. Since 1984, we have privatized more than 20 Crown corporations. This has been of tremendous benefit to the economy.
We will continue to privatize Crown corporations and sell investments where government ownership is no longer needed to meet public policy objectives. Exactly two weeks ago, we introduced Bill C-84 which outlines our proposal to privatize Petro-Canada.
At the same time, we have promoted economic growth through a variety of means that encourage business. We have taken steps to stimulate greater private sector research and development. Next to Australia, Canada provides for the most favourable tax treatment for R and D expenditures in the industrial world.
To be competitive in today's information intensive economy requires a skilled and flexible workforce. That is why we have put forward our proposed labour force development strategy. This strategy, which now has been before the Senate for almost a full year, places strong new emphasis on worker retraining and upgrading of skills. The strategy provides for increased federal funding for labour force upgrading, and it seeks ways to encourage the private sector to double its training effort.
I would like to point out that as a member of Parliament, I meet with constituents every week. Many constituents come to me as a last resort looking for a job. What these people want is an opportunity to contribute to society. Many of them would benefit very much from a skill training-program. But this has been denied to them by the Liberal senators who are holding up this legislation.
What I believe is so fundamental to this is that there are people in the workforce who, through no fault of their own, experience discrimination. These include older women and people who have not had an opportunity to complete their schooling. Because of the way the economy is structured, they badly need this retraining. This is one of the most fundamental measures that we
October 15, 1990

should he passing as there is a desperate need in the country for retraining.
I regret informing the people who come to visit me and seek my help that there is not enough money in the jobs retraining program because it is held up by the Senate. I have been to graduation ceremonies from some of these job retraining programs. Virtually 90 per cent of the people who have taken some of these job retraining programs have jobs. They go into the workforce where the private sector has co-operated, and the private sector business people and others are so impressed with what they have been able to contribute that they hire them immediately. This very important program is being denied to them by the Liberal senators.
Another central plank in our policy to create economic growth has been the Canada-U.S. Free Trade Agreement. Because Canada depends on trade for 30 per cent of our gross domestic product, it was vital that we secure access to our largest and most important trading partner. Gaining broad, secure access to the large American market means additional sales and more jobs.
We can see this in my province of Alberta where we have had a tremendous amount of investment in the petrochemical industry. Last week, for example, the President of Finland was in Alberta, in the county of Strathcona, to place a corner-stone for a new petrochemical plant that will employ hundreds of people. These are the high quality, high value-added jobs that the member for Ottawa South was talking about. The reason they came to Alberta was because of the free trade agreement and our access to markets in the U.S.
In Gibbons, Alberta, there is another petrochemical plant which is under construction right now. We had 17 per cent tariffs on petrochemicals and those are gone, or they are diminishing so quickly that we are experiencing a tremendous amount of growth in the petrochemical sector. These are high paying and highly skilled jobs taking our raw resources and adding value to them. The member for Ottawa South was complaining that we are selling these resources at low prices to the world but we are adding value to them and creating a tremendous benefit for the economy and exporting these products to the U.S. and world markets. These are world-scale facilities.
Supply
The free trade agreement has allowed greater economies of scale and specialization. That will mean increased growth, not a made-in-Canada recession, as opposition is talking about.
We have a healthy growing economy and with that we can not have a tax system that distorts economic decisions and penalizes economic efficiency. I would like to tell members opposite that their motion is partisan, wrong and will be defeated.


The Acting Speaker (Mr. DeBlois):: Order, please! I regret to interrupt the hon. member but since it being 6.45 p.m., it is my duty pursuant to Standing Order 81(14) to interrupt the proceedings and put forthwith all questions necessary to dispose of the supply proceedings.
Is it the pleasure of the House to adopt the motion?


Some hon. members:: Agreed.


Some hon. members:: No.


The Acting Speaker (Mr. DeBlois):: All those in favour will please say yea.


Some hon. members:: Yea.


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


Some hon. members:: Nay.


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


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


The Acting Speaker (Mr. DeBlois):: I declare the motion lost.
It being 7.14 p.m., the House stands adjourned until 11 a.m. tomorrow, pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 7.14 p.m.