1990-03-06

Mr. Albert Cooper (Parliamentary Secretary to Government House Leader):: Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's response to 22 petitions.
[Editor's Note: See today's Votes and Proceedings.]



INTERPARLIAMENTARY DELEGATION


Mr. Geoff Wilson (Swift Current-Maple Creek-As-siniboia):: Mr. Speaker, as Vice-Chairman of the Cana-da-NATO Parliamentary Association it is my honour, pursuant to Standing Order 34, to present to the House, in both official languages, the twelfth report of the Canadian-NATO Parliamentary Association.
[Editor's Note: See today's Votes and Proceedings.]



COMMITTEES OF THE HOUSE


Mr. Bill Domm (Peterborough):: Mr. Speaker, I have the honour to present the report of the legislative committee on Bill C-5, an act to amend the Railway Act, without amendment.
[Editor's Note: See today's Votes and Proceedings.]



CHAIRMANSHIP OF SPECIAL COMMITTEE

['Agreed.']
Hon. Harvie Andre (Minister of State to Prime Minister and Government House Leader):: Mr. Speaker, I would like to introduce a motion which has been discussed with the opposition parties. I believe there might be unanimous consent for the following motion:
That notwithstanding the Order of the House made on Thursday,
December 14, 1989, the Chairman of the Special Committee on the
Review of the Parliament of Canada Act continue to be the Hon.
Marcel Danis, member for Verchferes.


Mr. Speaker:: Does the government House leader have unanimous consent of the House to move the motion?


Some hon. members:: Agreed.


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


Some hon. members:: Agreed.


[Stage Direction]
Motion agreed to.

Mr. Guy Saint-Julien (Abitibi):: Mr. Speaker, today, pursuant to Standing Order 36,1 wish to table a petition from Matagami concerning the recommendations of the Task Force on Tax Benefits for Northern and Isolated Areas.
Matagami is without question an isolated area, and that is why your petitioners consider the Brunelle recommendation to be discriminatory, unfair and inefficient as it concerns the northern tax benefits system. It offers no encouragement to people in the North and no incentive to make use of northern resources.

March 6, 1990
Routine Proceedings


Mr. Dave Dingwall (Cape Breton-East Richmond):: Mr. Speaker, I would like to present a petition on behalf of Council 4302 of the Knights of Columbus in Spring-hill, Nova Scotia.
These people, almost 2,000 in total, are in disagreement with the goods and services tax and are tired of being challenged and laboured by increased tax burdens. They calling upon Parliament to drop this unfair, crippling tax that has as its target low and middle income Canadians.
In addition, I have a second petition from individuals and constituents of the federal constituency, like the previous one, of Cumberland-Colchester, primarily in the Amherst area. They are also in opposition to this particular goods and services tax. They call upon Parliament to rescind the particular matter which is before Parliament at the present time.


EXTERNAL AFFAIRS
Mr. Don Blenkarn (Mississauga South):: Mr. Speaker, I have the honour to present a petition to this House on behalf of Mr. Yih-Sheh Leo, a Canadian citizen who has been persecuted for political reasons in Thiwan.
The petition calls upon the government to use its good offices in the Canadian Embassy in Japan and the High Commission in Hong Kong and to send a representative to Taiwan to assist Mr. Leo in protecting himself against this improper, unfair, undemocratic and inappropriate attack on freedom of speech.


GOODS AND SERVICES TAX
Mr. Nelson A. Riis (Kamloops):: Mr. Speaker, it is an honour to present a petition, pursuant to Standing Order 36, on behalf of a number of constituents from the constituency of Kamloops who are totally distressed that the government continues to proceed with its goods and services tax.
They point out at some length all their concerns, including the fact that it will erode their purchasing power, that it will tax critical items such as heating fuels,
and that it is regionally discriminatory because it will be on transportation costs. They go on and on.
The petitioners are asking the government, even at this point, to reconsider what it is doing and to go back to the drawing-board and start all over.


BALTIC STATES
Mrs. Pauline Browes (Scarborough Centre):: Mr. Speaker, I am pleased to present a petition in the House today concerning the Baltic States of Estonia, Lithuania and Latvia. Canada has not recognized the illegal annexation of the Baltic states by the Soviet Union.
Whereas Canada is a signatory to the final act of the Conference on Security and Co-operation in Europe which affirms the principle of self-determination of people, the petitioners call upon the Government of Canada to acknowledge favourably the aspirations of Canadians of Estonian heritage who stand united in their support of the Congress of Estonia, which will convene in Tallinn, Estonia, on March 11 and 12, 1990.
Canadians of Estonian heritage will be attending that particular conference and participating in it. The petitioners will express their collective will at that conference of the Estonia people as to their future for freedom.


GOODS AND SERVICES TAX
Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, I also have the honour, under Standing Order 36, to present a petition on behalf of a number of Canadians who live in the area where I grew up, the County of Haldimand in southern Ontario.
They feel like many British Columbians that the goods and services tax is a completely unfair and punitive tax. They call upon Parliament to reject the current proposal for a goods and services tax and to reform the taxation system so that there is an effective minimum tax on wealthy individuals and corporations.
They want to ensure that if and when there is a broad public consensus on a sales tax measure to replace the manufacturers' sales tax this would not be a massive government tax grab.
They call on the government to cease with the proposal which will shift the tax burden on to ordinary Canadians through a regressive consumption tax instead of through real tax reform.
March 6, 1990


Mr. Stan J. Hovdebo (Saskatoon-Humboldt):: Mr. Speaker, it is my honour and duty on behalf of citizens of Saskatoon to present a number of petitions, all dealing with the goods and services tax.
These people feel that the government has not addressed the unfair taxation system currently in place. They call upon the government to reject the goods and services tax and to bring forward a tax system which is fair to all Canadians.


Mr. Jim Karpoff (Surrey North):: Mr. Speaker, I have the honour to present to the House a number of petitions signed by constituents of my own riding, including people from Riverside, Newton, Guilford, Whalley, Port Mann, Bridgeview, Green Timbers, Port Kells, Johnston Heights, and Fraser Heights. They are all asking the government to abandon its proposal for the goods and services tax and to bring in fair and equitable taxation.
I also would like to inform the House that I have a large number of other petitions which were done spontaneously by citizens in the ridings, both small businesses and seniors, but unfortunately they were not in a form that could be certified by the House.


Mr. Joe Comuzzi (Thunder Bay-Nipigon):: Mr. Speaker, pursuant to Standing Order 36 it is my duty and privilege to table 68 petitions which have been certified correct as to form and content.
The 1,443 signatories from Thunder Bay, Nipigon, Kakabeka Falls, Dorion, Hurkett, Red Rock, and other areas in the region I represent strongly oppose this government's proposed goods and service tax.
These constituents call upon Parliament to reject in full the misguided, regressive, nonsensical consumer tax that the government proposes to implement on January 1, 1991.


Mr. Lawrence MacAulay (Cardigan):: Mr. Speaker, it is my privilege to present this petition for people living in my district of Cardigan, P.E.I. who strongly oppose this tax.
They believe it will hit Canadians with higher taxes, higher inflation, higher interest rates, and higher unemployment, wherefore the undersigned petitioners call upon Parliament to reject this goods and services tax.
Routine Proceedings VIA RAIL


Mr. David D. Stupich (Nanaimo-Cowichan):: Mr. Speaker, I have two petitions signed by residents of the various communities in my riding calling upon the government to live up to its promises to keep VIA Rail as a transportation system in Canada and urging it to restore the system to its fullest.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Albert Glen Cooper: Mr. Speaker, the following questions will be answered today: Nos. 211, 212, 219 and 223.


Ms. Black: Were shelters for battered women funded by the Homes for Special Care section of the Canada Assistance Plan and, if so (a) for each province and territory, what number (b) what amount of money did the government contribute to this type of home?


Hon. Henry Perrin Beatty (Minister of National Health and Welfare):: Yes. (a) and (b)-See attached chart.
	(a)	(b)
PROVINCE	TOTAL NUMBER OF HOMES	AMOUNT ($000'S)Newfoundland	3	300Prince Edward Island	1	100Nova Scotia	8	800New Brunswick	7	700Quebec *	N/A	N/AOntario	56	5,400Manitoba	5	600Saskatchewan	9	900Alberta	15	2,300British Columbia	47	2,800Northwest Iferritories	4	300Yukon	1	200TOTAL	156	14,400
* Quebec does not administer a needs test to residents of transition homes. Therefore, Canada Assistance Plan cannot share in any costs related to such facilities.

March 6, 1990
Routine Proceedings VIA RAIL STATISTICS


Ms. Black: For the last year for which Statistics Canada has figures, for the (a) Atlantic (b) Quebec (c) Ontario (d) British Columbia region, what proportions of male and female passengers were carried by VIA Rail?


Hon. Benoit Bouchard (Minister of Industry, Science and Technology):: Statistics Canada reports:
Statistics Canada Collects data only on the total number of passengers carried by VIA Rail and since these data are based on tickets sold, they do not distinguish between male and female passengers. No breakdown is available by province.
Latest figures available are as follows:

(,000)
1988	6,268
lb November 1989	5,447
(cumulative)
SOURCE: Statistics Canada, Catalogue number 52-003.


Mr. Bird: Under the new Goods and Services Tax, will Canadian businesses receive a refund for taxes that they have paid on existing stocks and inventories as of January 1, 1991, and if so in what way (a) are the inventories to be evaluated (b) will tax refunds be calculated?


Hon. Otto John Jelinek (Minister of National Revenue):: Yes, under the new Goods and Services Thx (GST), eligible Canadian businesses will receive a rebate of the federal sales tax paid on goods for sale, lease or rental in inventory on GST implementation day.
(a) The method used to evaluate the inventory will be the same as the method adopted for income tax and financial statement presentation purposes. Rebates in respect of gasoline and diesel fuels will be a specific amount per litre, based on the per litre FST rate on these items on December 31, 1990.
(b) The calculation of inventory rebates will be based on prescribed rebate factors in all cases. There will be separate rebate factors for gasoline, diesel fuel, motor vehicles, construction materials/equipment for buildings, and for other taxable goods. The gasoline and diesel fuel rebate factors will be applied to the volume of the inventory, that is the number of litres of product. All other rebate factors will be applied to the tax-paid inventory value of goods for sale, lease or rental.


Mr. Gardiner: Have any organizations or government departments in the riding of Prince George-Bulkley Valley received Canada Assistance Plan funding and, if so (a) what are their (i) names (ii) addresses (b) in each case, what dollar amounts have they received?


Henry Perrin Beatty: Canada Assistance Plan contributions are not paid to individual organizations or government departments in respect of individual parliamentary ridings. The Canada Assistance Plan reimburses provincial governments 50 per cent of eligible costs incurred in respect of shareable social assistance and social service programs as defined by the Act and Regulations. No funds are paid directly to individual organizations or departments.


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


Mr. Speaker:: The questions as enumerated by the parliamentary secretary have been answered. Shall the remaining questions be allowed to stand?


Some hon. members:: Agreed.



POINT OF ORDER


Mr. Speaker:: On Tuesday, January 23, 1990, the hon. member for Ottawa-Vanier rose on a point of order to express concerns about the operation of certain aspects of Standing Order 52, which is, of course, the Standing Order pertaining to emergency debates. In the ensuing
March 6, 1990

procedural discussion, the Chair heard comment from the hon. member from Kamloops, from the Parliamentary Secretary to the Government House Leader and from the hon. member from Glengarry-Prescott-Russell.
[English\
At issue was the disposition of a number of applications for emergency debates of which notice had been given for the previous day, Monday, January 22, 1990. Members had been precluded from proceeding with these applications on that Monday because the House adopted a motion to move to Orders of the Day.
In the spirit of co-operation which sometimes prevails in this place it was agreed that those applications would be deemed to be before the House the following day. They were dealt with on Thesday, January 23, on that basis. That agreement was made subject to the express proviso that it not constitute a precedent.
The Chair undertook to reflect upon the interpretation to be accorded to this aspect of Standing Order 52 and to deal with the intricacies of the procedural matter at another time. The Chair is now prepared to share with the House the results of that consideration.

Hon. members are all familiar with the provisions of Standing Order 52, by which a member may seek permission to move the adjournment of the House in order to debate a "specific and important matter requiring urgent consideration". These emergency debates as they are known are held only when a number of hurdles as spelled out in Standing Order 52 have been crossed. In particular, Standing Order 52 (2) provides that any member wishing to move the adjournment of the House under the terms of this Standing Order must give to the Speaker, at least one hour before raising it in the House, a written statement of the matter proposed to be discussed.

The items of concern addressed in the procedural exchange on this issue may be conveniently and fairly, I believe, summarized as follows.
First, concern was expressed that when a motion to move to Orders of the Day pre-empts reaching that point in Routine Proceedings at which leave to seek an
Routine Proceedings
emergency debate may be sought, the system is then short-circuited and the opportunity to present an application is not protected.
Second, it was contended that any notices to the Speaker requesting an emergency debate which are precluded from being presented on a given day should be held over and called on the next day when applications pursuant to Standing Order 52 would normally be reached.
In response to the first point I think it should be emphasized that the decision to move to Orders of the Day is one which is made by the House usually on the basis of a recorded division, presumably with full knowledge of the consequences, whatever they may be, of doing so. That being so I do not think it incumbent upon the Chair to second guess the decision of the House and its ramifications, and I would decline any invitation to do so.
As to whether notices of intention to request an emergency debate should be held over and called at the first opportunity, I have severe reservations in this regard.
The specific and important matters requiring urgent consideration, according to Standing Order 52(1), call by definition for immediate action or decision or attention. If that immediate attention is not accorded, it stands to reason that the nature of the matter may change. A delay of even 24 hours may serve either to diffuse or escalate the situation so that it is no longer an emergency or, conversely, it is even more critical. For this reason the Chair is reluctant to institute what would be a new practice of holding over such notices.
This reluctance is enforced by the consciousness that were notices to be held over, some hon. members may for a variety of valid reasons not be prepared to proceed with them on a subsequent occasion.
Furthermore, the Chair is sensitive to the fact that hon. members may wish to retain for themselves the prerogative of resubmitting notices, because in framing each successive application they have the opportunity to capture with precision the changing elements which give rise to the request for an emergency debate and which may bear heavily on the ultimate success of the application.

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I would ask hon. members to remember that on a number of occasions when applications have come to the Chair and I have decided not to proceed with an adjournment of House business for an emergency debate, I have often remarked that it would not be appropriate to do so, and I use the words "at this time". The reason for that, of course, is that circumstances can change very rapidly, especially in an area where there is concern with respect to the necessity to have an emergency debate.

The Chair is pleased to have had this opportunity to relate to the House the considerations which have informed its decision to continue the existing practice with regard to notices submitted pursuant to Standing Order 52.

I thank hon. members for their assistance in this matter.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Monday, March 5, consideration of the motion of Mr. Wilson (Etobicoke Centre) that this House approves in general the budgetary policy of the government; and the amendment of Mr. Young (Gloucester) (p. 8636).
Hon. Herb Gray (Leader of the Opposition):: Mr. Speaker, later today we are to vote on an amendment presented by the Liberal finance critic, the member for Gloucester, which sets out clearly and concisely why we believe this budget should be defeated.
Liberals reject this budget for the same reasons that Canadians reject it. This budget is a blueprint for a made in Canada recession. This budget creates new taxes, despite the minister's claim that this is a no tax budget.
This budget abandons the federal government's responsibility for health care, veterans, post-secondary
education, and regional development. This budget in fact widens the gap between rich and poor, between rich and poor regions. This budget is an attempt by the Minister of Finance to shift the spotlight of blame for the economy away from himself and on to the provinces.
With this budget the Minister of Finance is trying to avoid his responsibility for the economic mess which he himself created. He is attempting to transfer that responsibility to the provincial governments and to low and middle income Canadians.
He is doing it because this is a government which thinks that Canadians can be fooled and manipulated into thinking that someone else is responsible: that it is the provinces, the workers, the students, the poor, the opposition parties, past governments, or heaven knows who else got us into this mess.
I can tell the minister that Canadians are not going to be fooled. Canadians can see right through this shallow attempt to avoid responsibility.
What it comes down to is that Canadians simply do not believe anything this government says any more.


Some hon. members:: Hear, hear!


Herbert Eser (Herb) Gray: Canadians know that this is the same Minister of Finance who in 1984 said "We will not raise taxes" but who has raised taxes a total of 32 times and by billions and billions of dollars since 1984.
"Thx increases," he said, "were necessary to reduce the deficit and the public debt". But the public debt has skyrocketed. The Minister of Finance started with a public debt of $170 billion in 1984 and has more than doubled that to $351 billion in only five years.
Canadians also know that in 1985 the minister said that by 1990, this year, the deficit would be $17 billion. He missed that mark by over $10 billion. Now he is saying that by 1994-95 he will have it down to $10 billion.
Quite frankly, Canadians do not believe the Minister of Finance's optimistic projections; they have heard it all before.
All the minister's projections are based on his assumption of an interest rate of four to five percentage points lower than what it is today. This is the Minister of Finance who has been supporting and agreeing with the Bank of Canada's current high interest rate policy. If the minister would show some leadership to bring those

rates down, maybe more people would believe his projections.
Canadians know that this Prime Minister is the same one who said that pensions were a "sacred trust never to be tampered with" and who then attempted to deindex old age pensions and is now trying to claw back seniors' pensions.
Canadians know that we are talking about the same Minister of Finance who called us liars in the last election campaign when we said that he would cut funding for health care, education and regional development but who is now doing exactly that.
When the Prime Minister was asked some 10 days ago at his first press conference in three years why his was the most unpopular government in Canadian history, he had no real answer. He refused to acknowledge the fact that if his government is the most unpopular government in history, there is good reason for it, starting with himself and the Minister of Finance.
The Prime Minister should not only have been apologizing for the misleading and fraudulent behaviour of his government; he should have announced a reversal of that behaviour, starting with the withdrawal of this budget.
In August 1989 the Prime Minister said, and I quote: "We are going to focus more and more of our attention and resources on long-term investment in people, education, literacy and the upgrading of skills". This budget does exactly the opposite.
This budget is nothing but recycled Reaganomics, a theory already discredited and abandoned in the United States but still believed in by this Tory government. It is a new form of trickle down theory, applied to provincially administered programs such as health care, education and welfare.
What the minister is saying to the provinces is: "I am going to cut your funding down to a trickle, and I do not care if health standards go down. I do not care if family service payments go down. I do not care about the human costs. That is not my problem". That is what the Minister of Finance is saying in his budget and that is what Canadians do not want.
The minister seems surprised that the provincial governments object to his transparent attempt to stick
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them with his problem. He seems surprised when they say that taking $7.3 billion from the provincial treasuries for health care and education will have a negative impact.
Of course it will have a negative impact. It will have a dramatic and negative impact on the ability of provincial governments to deliver what Canadians look on as national programs.
He is weakening the ability of our national government to ensure national standards on health care and education. He is weakening the rationale, the need for a strong national government. In his budget, the Minister of Finance is weakening the basis for national unity in Canada, and at the worst possible time.
Let us consider what Don Getty, the premier of Alberta-one of the few remaining Tory premiers-had to say about this budget: "I am not sure who is speaking for Alberta in Ottawa, but I think there is obviously an effort here in a way that I think is unfair to unload the federal deficit on the provinces." He obviously does not think much of the member for Yellowhead or the Deputy Prime Minister. He does not know who is supposed to be speaking for Alberta in Ottawa.

Mr. Speaker, Marc-Yvan Cote, the Quebec Health and Social Services Minister, had the following to say about a statement by the Minister of Finance that cutbacks would have no impact on the provinces, and I quote: "When Michael Wilson claims his mismanagement will have no impact on health services in Quebec, to me he sounds more like a guy from Bay Street than from Quebec City."
In any case, Mr. Speaker, the minister can hardly be expected to know what impact cutbacks will have on the provinces since he did not consult them. And how can the minister reconcile today's actions with what he said when he was on the other side of the House? In 1982, he stated that consultations with the provinces were imperative before any budget cutbacks that would involve closing hospitals and reducing assistance to postsecondary education. He also said that we should not turn hospitals, universities and colleges into a battleground for federal and provincial governments.

March 6, 1990
The Budget
Mr. Speaker, when I asked the minister why he didn't take his own advice, he had no answer. This tells us a lot about the new era of federal-provincial harmony and reconciliation announced by the Prime Minister.
Mr. Speaker, the 1990 Budget undermines national unity at a particularly unfortunate time.

Neither did the Minister of Finance bother to consult the provinces about his cuts to the Canada Assistance Plan. That is the program with which the federal government shares with the provinces half the cost of social assistance in this country. Even for Tories, this budget sets new lows for heartlessness.
We have a situation where thousands and thousands of Canadians are lining up at food banks across this country, where 1.2 million children are living below the poverty line, where thousands of single parents are struggling to feed and clothe themselves and their children, where thousands of elderly Canadians face the indignity of having to rely on private charity for basic necessities and where thousands of the working poor are facing increasing roadblocks to a decent standard of living.
This government is making things worse for the poorest of the poor in this country, not better.

First, the government is trying to eliminate the federal contribution of $2 billion to the Unemployment Insurance Plan. It is tightening the eligibility criteria by increasing the number of insurable weeks required in most cases and by decreasing the number of weeks of benefits, so that if the jobless are able to benefit from it, it is for a shorter time. Mr. Speaker, the government is quite a help-!
Finally, to those who have used up their benefits and must turn to welfare, the Minister of Finance is saying, "Yes, I am reducing the Canada Assistance Plan and transfers. Too bad, but that's how it is! The international financial community for which I must polish my image is more important to me that the children you have to feed". That seems to be the Finance Minister's thinking.
Mr. Speaker, the minister is not satisfied with failing in his duty to protect the disadvantaged. He is violating the agreement with the provinces whereby he bears half the
cost of welfare and other social measures under the Canada Assistance Plan. Is it any wonder that the provincial governments are taking the Finance Minister to court? This is unprecedented in the history of these agreements.

of Finance is taking his cue from the Prime Minister who said, and I quote: "There is no crisis in Atlantic Canada".
Instead of helping Atlantic Canada in this budget, the minister is beginning to put an end to regional development grants. The reason for this is simple. The Conservatives signed a trade deal-a very bad deal-with the United States. The United States wants to have regional development grant assistance ended in this country. The Minister of Finance is not even waiting for the subsidy negotiations to start. He is giving the Americans what they want before they formally ask for it and Atlantic Canadians are going to pay the price.
So are the people of British Columbia who are being thrown out of work with the cancellation of the Polar 8 ice-breaker. Again the government made ringing commitments about not putting a price on the defence of our Arctic sovereignty. What happened? It did put a price on it. Suddenly Arctic sovereignty was too expensive. I think the Mayor of Esquimalt was speaking for all Canadians when he said: "I'm angry because they lied to us. We really feel betrayed." The betrayal does not end there.
We now have a desperate crisis in western agriculture and the government is silent. There is nothing in this budget to deal with this crisis in spite of the urgent pleas of one of the other remaining Tory premiers, the premier of Saskatchewan, whom we heard on television last night.
The crisis in western agriculture is, like the crisis in the Atlantic fishery, a crisis, a matter of concern for all Canadians. This government is silent. It is doing nothing.

Mr. Speaker, the minister is taking the same attitude toward women's groups. He has made outright cuts in the budgets for programs that are essential to battered and mistreated women or that are used to promote equal opportunity for women and remove the historic social injustice done to them.
These funds were used to remove obstacles to full equality for Canadian women.
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Equally shameful is the treatment the minister has meted out to the aboriginal people of this country. He is slashing funding for native groups, funding which supports native broadcasting and native newspapers. What the minister, however, callously overlooks is that native broadcasting and native newspapers perform a vital service, a service native communities cannot be without. As was pointed out by my colleague, the member for Western Arctic, the minister has forgotten that it was the native newspapers that continued to expose the facts that led to the reopening of the Donald Marshall case and intensified the fight for native equality in our justice system.
Liberal governments understood that less advantaged Canadians needed help to make sure that their voices were heard in the formulation of public policy in this country. We helped establish and fund advocacy groups to do that. We did not always like what we heard from them. We were not always comfortable when they told us that this policy or that policy needed to be changed. But we believed that they had a right to be heard. The point is, we set up and helped fund these groups so that as a government we could make decisions which incorporated the views and aspirations of the widest number of people and so that these groups could inform and challenge other Canadians and each other.
This government does not like to hear criticism. This government does not like to be told that a certain policy direction is not working or is hurting a particular group of people. The government's answer is simple: shoot the messenger. Silence the groups that deliver the bad news by cutting off their funding. That is not only mean, it is also short-sighted and ultimately counter-productive.
Perhaps the ultimate in short-sightedness is the failure yet again of the government to bring in a child care program. This government has been promising a child care program for nearly six years. Canadian parents and Canadian children are still waiting.
Writing in The Toronto Star last week about the Prime Minister's 1984 election commitment to create a child care program, Doris Anderson, former chairperson of the National Advisory Council on the Status of Women

The Budget
stated: "The lies were so preposterous, even for a politician, that we almost believed them".
Remember the last election? The Minister of Finance said all of his spending commitments were taken care of. He said they were not promises. He said the money was already set aside. No problem with child care. It would start the day the government was re-elected.
But that was then and this is now. The minister put Canadian children on hold once again. Not only is there no new national child care program but instead, in his cuts to the provinces for the Canada Assistance Plan, the Minister of Finance is reducing the limited money there already is for provincial child care spaces. No new program and even less than there was before for child care across the country.
This budget is not only a further betrayal of the children who are our hope for the future, it is also a betrayal of those whose sacrifices helped ensure that all of us had a future in a free and democratic country.
Many of our war veterans in long term care will have to pay thousands of dollars more for board and lodging as a result of this budget. That is over and above the doubling of those fees in 1985 by this Conservative government.
That is a shameful way to treat those brave men and women who were willing to lay down their lives for this country. They fought for us when we were in need. We should be fighting for them now when they are in need. We should not be forcing them to pay more just because the Minister of Finance failed basic bookkeeping. I can assure you, Mr. Speaker, that we in this party will not abandon the war veterans of this country.


Some hon. members:: Hear, hear!


Herbert Eser (Herb) Gray: We will also not abandon the low and middle income Canadians, including veterans, who are going to be hit with the biggest and most regressive new tax in our history, the new 7 per cent goods and services tax.

Mr. Speaker, the minister boasts of bringing in a budget with no new taxes. He no doubt thinks that we should thank him for it, that Canadians should be dancing in the streets. It is a big joke. No new taxes, my eye! The government increased Canadians' tax burden in
at least four ways. First, it cut $7.3 billion from transfers to the provinces, forcing the provincial governments to raise their taxes. The minister is passing the buck, seemingly unaware that federal taxpayers are also provincial taxpayers. With his new budget, they will have to pay and pay and pay.
Secondly, Mr. Speaker, as a result of the deindexation of individual income tax introduced by the Finance Minister in 1985, Canadians will pay 3 per cent more this year and lose 3 per cent of the tax credit. Thirdly, Canadians will pay $2.1 billion more in additional taxes in 1990 because of the measures in last year's Budget. The government's clawback of old age pensions and family allowances means the end of universality.
Mr. Speaker, the surtax on individual income climbs to 5 per cent. The excise tax on gasoline goes up another cent a litre. A whole series of other measures takes effect this year.

To say that this is a no-tax budget is like saying that just because people do not celebrate their birthdays they are not getting any older. I have to say that, as the months go by, this government is getting older but it sure is not getting any wiser, nor is it getting any fairer.
This brings me to the fourth new tax the minister does not include when he calls this a no-tax budget. I am talking about the new goods and services tax, the unwisest and unfairest tax of all. When the Minister of Finance launched us down the road toward this new tax he made a number of commitments about what kind of a tax it was going to be. He set out a number of tests which he promised the new tax would meet or there would be no such new tax.
One of the first preconditions the minister set out for his new tax was that it needed provincial co-operation. He said such a tax would be unworkable without it. How many provinces have signed up to totally integrate their sales tax with the federal government's? Not a single one. Now, according to the minister, provincial co-operation which only a few months ago was vital is not really necessary and he is proceeding with his tax without provincial co-operation in any event. Yet the minister wonders why Canadians do not believe what he says any more.

The next commitment was that the new tax was going to be simple. Instead of a simple tax, the minister has given us 323 pages of legislation filed with so much convoluted language and so many complex mathematical formulae, it is not simple at all. No wonder the head of the Canadian Federation of Independent Business calls this tax a nightmare. It is no wonder that the most recent issue of Small Business magazine contains a poll showing that only 4 per cent of their readers, who are all business people and who were supposed to be supportive of this GST idea, are willing to accept this tax.
If this tax goes through, Canada becomes the only country in the industrialized world with two sales tax systems. That means two calculations at every point of sale in all provinces except Alberta. They do not like this tax there at all, as we see on television night after night.
It means two sets of books and two sets of remittances, one to Ottawa and one to the provincial capital. Just to make sure everybody fills out the right forms in triplicate and sends in the right amount of tax, this government is hiring a veritable army of some 4,000 new tax police just to collect this new tax.
What about the great promise that the new tax would be visible? That commitment did not last long either. Now the minister says he cannot deliver on that promise to make it truly visible, to have it show up on bills, prices on the shelves and on cash registers. He says he cannot do that by law. He now says that the Constitution prevents him from doing that. The question Canadians are asking is: "How come it was possible when he made the commitment but now it isn't? The Constitution has not changed. Was the minister not being honest when he made the commitment, or is he not being honest now?".
What about the promise to reduce the income tax rate on middle income Canadians when he brought in his new goods and services tax? The minister has broken that promise. The tax rate will stay the same.
What about his promise to eliminate the 3 per cent surtax on income tax when the new sales tax came in? He did not eliminate it, he raised it to 5 per cent.
What about his promise that the new tax would not be inflationary? It was a strange promise to make in the first place because how can a tax that raised the price of everything by billions of dollars not be inflationary? Of
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course the minister has set out the most hopeful scenario in his budget documents, predicting that there will only be a 1 per cent or 2 per cent impact on inflation, and that will only happen during the transition period.
I do not think anybody believes that either.
I say the minister is not telling the whole story. He is making an assumption about how business will respond to the changeover from the current manufacturers' sales tax to his new tax. His assumption is that every single business in Canada now paying the old tax will adjust every single price to reflect only the new tax by taking out the old one. It is beyond belief that every business will take out the current 13.5 per cent manufacturers' sales tax from their prices and pass on all of the resulting benefits from this reduction to their customers immediately or even over a longer period.
Furthermore, why should Canadians sit by quietly and watch their purchasing power be eroded by this new goods and services tax on everything sold in this country? Workers have already told the Minister of Finance that they are not going to allow their purchasing power to be lowered by this new tax and one can well understand their point of view.
What about the effect on the economy of the government's proposed goods and services tax? In his budget documents, the minister himself is predicting higher unemployment and lower growth, in fact almost no growth in the coming year. By the minister's own admission, we are heading into an economic slowdown but he is pushing ahead with this new goods and services tax anyway.
As the right hon. member for Vancouver Quadra well pointed out in this House on January 29 of this year, speaking in the second reading debate on the GST legislation: "This tax could well push us into a recession".
Another memorable commitment made by the minister about his new tax was that it would be what he called "revenue neutral". He said it would not raise any more tax than the existing manufacturers' sales tax. Most Canadians hoped that meant they would pay the same amount, that it would just be collected differently and that it would not be a massive tax grab, which it has turned out to be.

March 6, 1990
The Budget
If you look at the current budget documents, you can see that the government admits that in 1991 alone, if this tax goes into effect, it will collect $1.9 billion more than it had predicted, even after giving an adjustment of several billion dollars to business for their inventories on which they had already paid the old manufacturers' sales tax. So much for the minister's claim that his goods and services tax would be revenue neutral.
Also, consider the fact that in 1984, when this Conservative Government was sworn in, the federal government collected about $8 billion from Canadians with the manufacturers' sales tax. But in 1991, if the goods and services tax goes into effect, the government will collect about $23 billion or three times as much in sales taxes as were collected in 1984. The minister can talk about "revenue neutral" as much as he wants, but the simple fact is that Canadians are going to pay three times as much sales tax in 1991 if the GST goes into effect as they paid in 1984. That is an enormous tax increase no matter how you slice it.
Yet, the Minister of Finance continues to insist that all families earning less than $30,000 will be better off with this new tax. According to a recent study by the respected Institute for Research on Public Policy, about one third of all families making under $30,000 a year will be worse off with this tax. This study also shows that for all income groups, with the GST 83 per cent of all families will either face no change or will be worse off.
You can see why this government wants to do everything in its power to shut down debate on this new tax. It has imposed closure to force second reading of the GST legislation through this House. It is simply not listening to the vast majority of Canadians who are telling the government to scrap this tax. Canadians want to be heard on this issue. They deserve better than they are getting from this Conservative government. Canadians deserve to have their views heard. They deserve to have their views respected.
We Liberals want to give Canadians that opportunity to be heard. To date we have presented, here on Parliament Hill, some 600,000 signatures against this tax. Now, during the week of March 12 to 16, next week, we will add to this petition drive by setting up a national telephone hotline number to give every Canadian taxpayer, every Canadian, the opportunity to call and say
"no" to the GST. All they have to do is call 1-900-720-6052, and they will be able to register their opposition to this goods and services tax.


Some hon. members:: What was that number again?


Herbert Eser (Herb) Gray: That number once again is 1-900-720-6052

It is essential, Mr. Speaker, for all Canadians to call 1-900-720-6052 to let the government know about their opposition to this general sales tax, a harmful tax for all Canadians, for our economy and our country.
We, in opposing this tax, are inviting all Canadians to register their opposition to it. Obviously, the message of Liberals and of Canadians to the Prime Minister is, "Scrap this tax now".
Budgets are supposed to be about building for the future. Budgets are supposed to be the application of the government's vision for a stronger and a fairer Canada. Budgets are supposed to be blueprints for economic growth and development. Budgets are supposed to represent our collective response to the needs and aspirations of all Canadians.
This Conservative budget is none of these things. This budget is nothing but a prescription for a made-in-Cana-da recession. It will dramatically widen the already growing gap between the rich and the poor in this country, and between the rich and poor regions of this country. As my colleague the hon. member for Humber-St. Barbe-Baie Verte said a few days ago, it is a battle plan for a war between the provinces and the federal government. As I said earlier in this speech, that is something that we do not need now. This is the worse possible time to put further strains on the unity of this country. This government should have presented a budget to strengthen our unity, not to begin tearing it apart.
For disadvantaged Canadians, this is not a budget of hope; it is a budget of despair. It is a budget which demonstrates that this government's priority is not compassion for the disadvantaged but a ruthless attempt to cover up its own mismanagement by putting an ever-increasing burden on the backs of veterans, worn-
March 6, 1990

en, natives, students, as well as the sick, the unemployed and the elderly, those least able to defend themselves.
This is a budget which attempts to stifle dissent and undermines our economy by undermining the basic social programs we are proud of and believe in, such as health care and education. It is the budget of a government that is attempting to shift the blame on to others for its own incompetence and its own mismanagement.
This is a budget which deserves to be defeated. I assure you, Mr. Speaker, that we Liberals on this side of the House intend to do everything in our power to do just that, to defeat this budget. I believe that even if the Tory majority prevails in votes in this House, Canadians will vote against the whole sad record of this government and will soundly defeat this government in the next election. I believe Canadians will long remember this budget and, as a result, the Conservatives will long regret their decision ever to have presented it to this House.


Some hon. members:: Hear, hear!


The Acting Speaker (Mr. Paproski):: There are no questions or comments. The hon. member for Yorkton- Melville on a point of order.


Mr. Nystrom:: Mr. Speaker, there has been a longstanding tradition in the House that with unanimous consent and if the member agrees, we can ask a question or two. I wonder if I could ask whether there is unanimous consent to ask a question of the Leader of the Opposition.


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


Mr. Gauthier:: Just a minute.


The Acting Speaker (Mr. Paproski):: There either is consent or there is not consent.


Jean-Robert Gauthier: Can I speak to this?


The Acting Speaker (Mr. Paproski):: No. Is there consent to ask the hon. member for Windsor West a question?


Guy St-Julien: No.


Jean-Robert Gauthier: Let the record show the Tories said "no".


The Acting Speaker (Mr. Paproski):: The hon. Minister of Supply and Services on debate.
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Hon. Paul Dick (Minister of Supply and Services):: Mr. Speaker, it is a pleasure for me to be able to rise and address the House this morning regarding the budget. We have just heard a spell-binding speech-


Some hon. members:: Hear, hear!


Mr. Duhamel:: There's an honest Tory.


Paul Wyatt Dick: You will realize there are many honest Tories over here. However, the speech was rather ineffectual, negative in all matters and it did not have one positive thing to say. It talked about "spending, spending, spending" which was the Liberal habit and how we got into this difficulty. It did not talk about restraint or cutting in any areas which we have to do, as everyone recognizes. Most of all, it was completely bankrupt in that it did not have one fresh, new idea.
Like everything else the Liberals have produced in the last five and a half years, they do not have any new ideas. I can honestly say that my hon. friends in the New Democratic Party do have innovative new ideas. They are somewhat left of Mr. Gorbachev's in most cases but, on the other hand, they would only bankrupt the country. However, they are innovative and new and the Liberals cannot even find that.
The Liberals are the ones that promise this and that and that they are going to be very up and up. They are the ones, if you think back to the seventies, who said we would never have wage and price controls. They said they would never increase the tax on gasoline by 18 cents a gallon, then they doubled it to 36 cents. I remember when they said they had wrestled inflation to the ground. I remember when they said they would have no referendum on sovereignty association; there was one. I remember when they said separatism was dead; it is not dead.
They have continually misrepresented the facts. In the last election campaign they even said that Canadians were going to lose medicare and their old age pensions. This was far from the truth and they were called to the point on that.
I have been looking forward to my opportunity to speak on the budget so that, along with some of my colleagues, I can present some of the facts and truths with regard to the current national picture. I have listened to the debate over the past days and I must say that in listening to the opposition I have come to fear that their objective analysis has been sacrificed for political expediency. That is always the case in political debates, but the facts have been mercilessly trampled in

March 6, 1990
The Budget
a rush to try and get the negative headline. Let us look at just a few of these facts.
In 1984, my colleague the Minister of Finance, introduced our agenda for economic renewal. We have been moving to implement that plan on a consistent basis ever since. The plan is aimed at such sensible objectives as reducing our budget deficit, controlling the growth of the national debt, removing obstacles from Canada's economic growth and encouraging innovation and competitiveness in the business sector.
Our plan is working. There are factual independent measurements of its progress. There have been some 1.6 million new jobs created in Canada in the past five years. Of those, 85 per cent are full-time jobs and 58 per cent of them have been filled by women. The unemployment rates have dropped in every region of this country since September of 1984. Youth unemployment has dropped as more and more young people have joined in our economic renewal, a renewal that is being been led by progressive and successful businesses and industries.
In the keystone province of Ontario, investment spending has been strong and the province's gross domestic product has grown substantially with an annual growth rate of 4.7 per cent since 1985.
When the people of Canada rejected the spendthrift government in the general election of 1984 and decided instead to bring this government to office, that federal Liberal government was spending $16 billion more each year on programs than it was collecting in revenues. There was a massive operating deficit. That is how the Liberals manage finances. They thought they could spend their way to happiness.
Today, instead of an operating deficit, we have an operating surplus. The amount by which revenues exceed program spending is $9 billion. That is a $25 billion turnaround in five years. When we took office five and a half years ago the national debt was about $200 billion. That represented nearly half of the nation's gross domestic product.
When the party opposite took office in 1980 the public debt amounted to $85 billion. In their four short years before we took office they had increased that debt by 250 per cent to $200 billion. It has grown from $200 billion, by 75 per cent, to $350 billion in the five years since we have taken over. Eighty per cent of the growth of the national debt during our five years in office has been as a result of
the compound interest pressure on the original $200 billion debt we inherited in 1984. These are economic realities which the opposition may not understand.
Our plan has included policies designed to make Canadian businesses more competitive in what is increasingly a global market-place. We have deregulation of the energy, transportation and financial services sectors, privatization of government enterprise, and reform of the income tax system. We have entered into a free trade agreement with the United States and introduced measures to improve the flexibility and skills of our labour force. We will contribute nearly $1.7 billion to job creation and labour force adjustment this year. At the same time, we have tackled the federal government's longstanding financial mess.
The annual deficit has been reduced by about $9.5 billion below its level in 1984-85. Our goal is to continue to reduce that deficit and, all being well, by the year 1994-95 we will eliminate the government's need to borrow from the market-place.
Let us talk about government spending for a moment. Some people have suggested that the government has not been serious about reducing its expenditures. When John Thmer was the federal finance minister, growth in government spending averaged 20.2 per cent annually. Even in the last Liberal government, from 1980 to 1984, growth in government spending grew by 13.5 per cent. In the last five and one-half years under the present Minister of Finance we have held growth in program spending to below the rate of inflation, at 3.5 per cent. Over the past five years expenditure restraint has provided the largest share of deficit reduction.
If we look at it another way, relative to the size of the economy, program expenditures have fallen three percentage points over this period. They used to consume
19.5	per cent of gross domestic product. From 1984-85 to the present year they have dropped to 16.5 per cent.
If we had continued that wasteful spending attitude which the Liberals had in 1984, at the present rate, at the
19.5	level, we would be spending $22 billion more this fiscal year than we actually are. In actual expenditures, this government in five and one-half years, has lowered the cost of government operations. Overhead on light, heat, wages, telephones and computers has fallen by 10
March 6, 1990

per cent. I suggest that not many businesses could fall in that category.
We have been prudent. We have trimmed the size of the public service. It has been reduced by 12,000 person-years. It is back to the level it was 17 years ago, in 1973. As I mentioned, in the four years ending in 1988-89, the growth in federal program expenditures averaged only
3.5	per cent a year. This contrasts with an average annual growth of some of the provincial governments, taken as a whole, of 6.54 per cent, led by Ontario which is fuelling inflation in this country with an inflationary high of 9.5 per cent.
I mentioned the reduction in the size of the federal civil service. This compares very favourably when viewed in the context of what is happening in Queen's Park. You would think the provincial government would have learned. But no, when the Liberals were chased out of Ottawa as the government in 1984 they showed up in 1985 behind Mr. Peterson's Liberals in Toronto. Lo and behold, while this government has struggled to trim the Public Service by 12,000 people, the Liberals in Ontario have expanded their operations with a reckless abandon, increasing the provincial public service by 7,000 people. I guess that is what they call Liberal job creation. It has now put people on the public payroll.
While Ottawa has tightened its belt, some of the provinces-notably Ontario-have increased their spending, oblivious to the economic realities staring them in the face. This has caused inflationary pressures in Toronto and the golden horseshoe of Ontario. This has helped to increase interest rates.
The trouble is that all other parts of this country are paying the price for the inflationary pressures caused by the Liberal government in the province of Ontario. There is one monetary policy in this country. All the other provinces have to pay the increased interest rates that are necessary to try to cool out the inflation caused by the ridiculously high expenditures of Mr. Peterson's government in Toronto.
Some of our critics have claimed that restraining federal transfer payments to the provinces will harm the delivery of important social services. I think we should set the record straight. If the province of Ontario were to reduce its Liberal spendthrift ways by only one-half of 1 per cent in year one and by 1.25 per cent in year two, it
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would easily meet its budgetary requirements. That is just 1 per cent over two years.
Let us be clear on some points which members usually try to hide. We are restraining expenditures. We are not erasing them. The figures speak for themselves. Direct transfers to other levels of government rose from $23.8 billion.


The Acting Speaker (Mr. Paproski):: We are sending over a little lukewarm water for the minister. It might help his throat. It's an old Ukrainian remedy.


Paul Wyatt Dick: I appreciate that, Mr. Speaker. If you have an old Ukrainian remedy to get rid of my cold completely, I would like to take that. You should patent it, Mr. Speaker. You might do very well.


Mr. Marchi:: Send us over a bucket.


Mr. Nault:: Yes, we are having trouble swallowing it too.


Paul Wyatt Dick: That's not a bad line. You should try it on the stuff that your leader gave out today.
Direct transfers to other levels of government rose from $23.8 billion to $25.1 billion. That is a 5.2 per cent increase. In this budget we have increased payments which go directly to individuals by more than 7 per cent. They are going up to $35.8 billion in total. Transfer payments from the federal government have risen over the last year by nearly 5 per cent and combined they now total $72.6 billion. That is nearly half of all federal government spending.
Our critics say, quite irresponsibly I might add, that we are attacking post-secondary education. It seems to me that they concentrate their gaze on what is known as the EPF, or Established Programs Financing. This is money totalling nearly $10 billion. It was the Liberal government in 1977 that stopped directing the payments for specific services and no longer tied it to medicare or education. The provinces were told they could spend it on building roads if they wanted to.
It seems that the Liberals have forgotten in the last 13 years, but it was they who changed the formula and undesignated the money under the Established Programs Financing. Since then, the actual use of the federal money by the provinces is up to the provinces. They can do with it what they want. It is unqualified

March 6, 1990
The Budget
funding used by the provinces according to their particular priorities.
However, the fine print, which the opposition and the provinces conveniently overlook, will show also that the federal government provides additional support over and above the EPF, support of $11 billion through tax transfers. Therefore, federal EPF transfers to the provinces for 1990-91 total about $21 billion. That is 5.5 per cent higher than it was last year. Where is this crushing blow that the provinces are talking about?
Ontario, for example, will receive transfers under EPF and CAP of $9.3 billion in 1990-91. That rich province of Ontario that squawks all the time, that spends like a drunken sailor, is going to get $9.3 billion from the federal government. That is up from $9.1 billion last year. In the year 1991-92 it will increase to about $9.5 billion.
In addition to this, there is nearly $8 billion in equalization payments which go to the poorer provinces. This is primarily used by those provinces for health care and post-secondary education, but these payments are unaffected by the budget. In fact, they have nearly doubled since 1984. If we are attacking those most in need, how is it that federal spending on native and Inuit programs has nearly doubled since we came to office in 1984?
On page 76 of the budget, in the second paragraph, it indicates that in 1984-85 there was $1.4 billion spent on Indian Affairs and Northern Development. That has grown to $2.3 billion in 1989-90. How is it, I ask again, that the total of important federal payments for the services Canadians need is rising by 5.5 per cent? How is it that expenditures for health care, education and other social assistance for natives has not been constrained? I think we can easily see why the nation's richest provinces-notably Ontario-are the ones that do the complaining.
The Prime Minister and the Minister of Finance are asking them to spend responsibly for a change and to share in some of the difficult decision-making that is required to put the country on a sound fiscal footing. This is the basis for their complaint. In one major program, the Canada Assistance Plan, the federal government provides funding on a fifty-fifty cost-sharing
basis to the provinces for social services-essential welfare and similar services. The rate of growth for the CAP assistance to the rich province of Ontario in the last few years has been increasing at an average of 14 per cent per year.
The government has controlled its program spending to 3.5 per cent for five years now. The federal government was leading all the provinces, whose profligate spending was at 9.6 per cent or higher in the last three and a half or four years. We are asking the provinces to control their spending, to reduce the pressures on inflation, to reduce the pressures on the tax dollars. We have held the growth of payments such as CAP for the province of Ontario, and also for the other rich provinces of British Columbia and Alberta, down to 5 per cent. So we are asking them to control their spending and keep it down to 5 per cent instead of the 14 per cent rate that Ontario had been spending at in the last few years.
That is why Queen's Park is squawking. They have not been able to manage their finances for the last three or four years without massive infusion of federal funds at a time when federal resources are becoming scarce. They thought that the federal treasury was an infinite source of cash; cash for life. Well, it is not, and we are asking them to tidy up their government spending habits.
This government, this Prime Minister and this Minister of Finance have acknowledged reality. It comes down to the fact that Ontario will only be affected by this lid on CAP if it chooses to increase its spending on social assistance at a rate of more than 5 per cent this year. If it does so, then we are saying they should pay the costs. If it does not, then they will have it within their own budget.
To further point out the absurdity of this complaint it must be stated that all other provinces, those not as fiscally strong as Ontario, B.C. and Alberta, will continue to have open-ended, unrestrained access to CAP funding to meet any growth in expenditures eligible for cost sharing under CAP.
Important funding continues to be transferred to the provinces. It continues to grow. The difference in this budget is that the provinces which are in the position to absorb a reduced rate will be asked to do so. There have been no cuts in payments made directly to people. In fact, these have increased, as I pointed out, by about 7 per cent.
March 6, 1990

I could use an hour to recite the many programs we have put in place to help Canadians to assist themselves, to recite the list of difficult decisions we have taken to address the debt crisis we face, tough decisions-not politically popular but tough decisions-that are taken for the betterment of Canada.
Many governments are frequently fond of speaking of the future. The fact is that the future is now; it has arrived. The bottom line is that there is a $41 billion drain on the Treasury to meet the public debt charges. The federal government alone cannot build a sound fiscal base for this country. It cannot do so if some provinces continue to chip away at this base with inflationary overspending, such as the province of Ontario has done. It should be obvious that this is a supragovem-mental issue. It involves all governments, not just one. We are doing what is right for the country.
Some members of this family must stop acting like spoiled children and do their part. I would suggest that David Peterson and the province of Ontario stop acting like spoiled children. I do not think that by asking the rich provinces to give some thought to value before spending the money the federal government gives them is asking too much.


Jean-Robert Gauthier: Mr. Speaker, further to the minister's last comments, I would like to talk about "spoiled children". I may remind the minister, and this concerns his departmental responsibilities, that yesterday he was asked in the House why the government had set up offices for the government's most important ministers in various regions across the country, at a cost of about $1.6 million, which is exactly the amount cut from women's programs, which, if I am not mistaken, supported 80 centres. These centres helped women in this country deal with problems in their daily lives.
Does the minister feel that women are among what he called the "spoiled children of this system," because they are complaining, and rightly so, about this government's complete indifference to their problems? How can he justify a decision he made as the minister of his department to spend $1.6 million on large ministerial offices in big office buildings in Halifax and elsewhere? How does he reconcile that with the fact that women are now
The Budget
saying: You don't have the right to cut $1.6 million from programs which are there to help women take care of themselves and achieve a better understanding of what they can do with their lives? How can you reconcile cuts in women's programs with this excessive spending to accommodate the government's most important ministers?


Paul Wyatt Dick: Mr. Speaker, that is a very interesting question. I tried to answer it in yesterday's Question Period, when I pointed out that about four years ago the government announced it would open up regional ministerial offices rather than have the exorbitant spending of the previous government whereby many ministers opened up very expensive departmental offices in their own constituencies or the nearest city to them. That is what the Liberals had done.
I also want to point out that these are offices which are available to all ministers to use whenever they are in that area. We have tried to consolidate and lower the costs in total. I think it was a very wise and sensible way of trying to go ahead and do that.


Jean-Robert Gauthier: Why cut the women's programs?


Paul Wyatt Dick: Now, the member asks why we cut certain programs. Decisions are made. It was not in my ministry. There are other ministries to which he would perhaps like to put the question. Ministers put priorities on things. Certain programs, over a period of time, perhaps are not as high in priority as other programs. I point out to the hon. member who just spoke that it was this government which recognized the difficulty of battered women and battered wives and put up the $40 million. His government never did it in the 14 years it was in office. It was this government which did that for the first time when we announced $42 million. So remember that for a change. You did nothing most of the time except spend money ridiculously.


Jean-Robert Gauthier: What bloody nonsense.


Ron J. Duhamel: Mr. Speaker, I would hope that I would get a veiy clear answer to my question. I find it particularly alarming that there is a stubbornness on the part of government members who are unable to admit and accept that one of the reasons for spiralling costs in some provinces is that transfer

The Budget
payments were cut in 1986 and they continue to be cut. This means that the provinces will have to pay more.
There is an inability to admit, or perhaps to understand, that the transfer is both cash and tax points. Ihx points do not put a whole lot of bread on the table.


Paul Wyatt Dick: They don't?


Ron J. Duhamel: No, there is not and I would challenge you to debate that publicly.


Paul Wyatt Dick: I would sure like to have a few of them.


Ron J. Duhamel: There is an inability to accept that certain provinces are growing rapidly and some of the increased costs are wrapped up in that growth.
I am appalled that you would not be fair to another level of government, and I would suggest that if you feel as strongly as you do I could put in a call and organize a debate between Mr. Peterson and yourself or Mr. Nixon and yourself to see who is right.
The hon. member and some of his colleagues have mentioned the choices that they have had to make and there is a suggestion that they have been tough choices. Let us look at some of those choices: Defence: 5 per cent increase; CSIS: 20 per cent increase.


Paul Wyatt Dick: You call that an increase, you have to call cap an increase too. It's the same 5 per cent.


Ron J. Duhamel: It is not. You misunderstand it completely. I am shocked that you would not understand it, and we can debate that if you want.
How is it that you chose to cut transfers to health and education and you gave increases to defence and CSIS, and I mentioned the percentages, 5 per cent and 20 per cent? Would you not be rather concerned that these cuts that you have undertaken in health and education will affect young people, the elderly, the sick, the veterans, women, our aboriginal people, regions?
Would you not agree with me, and this is not intended to be unparliamentary, I will be very gentle here, that it is a bit of a wimpish kind of decision to exercise those choices, because picking on children, the elderly, the sick, women, aboriginal people, veterans, people who are not well represented, people who come from small regions does not demand strong decisive action. Would
you not agree that people who did that could easily be called wimps?


Paul Wyatt Dick: Mr. Speaker, I am very pleased to hear that the hon. member recognizes what the Liberal Party always has been and that is wimpish, because the Liberal Party has caused the difficulty for all of the disadvantaged in this country. The Liberals spent money so fast and so carelessly that in the long run, if we did not correct the situation over the last five and a half years and during the next three years, those are the people who will be disadvantaged in this country in the years to come.
Let me be more precise. It is the province of Ontario which has exceeded spending by 9.5 per cent, an amount which is increasing, and is the most inflationary of all the provincial governments. Ontario has 3.8 per cent, 4.2 per cent unemployment in the golden horseshoe and cannot even find people to do some of the jobs there because of the high rate of employment. It keeps on pumping more money into the system which also causes the Bank of Canada to increase the interest rate to try to cool the inflationary pressures which hurt Newfoundland, Prince Edward Island, northern Saskatchewan. The Liberals do not care about that. They only care about the cities. That is the way their governments were in the past as well.
The member stated that there was an increase of 5 per cent. We cut back defence spending-I think it is $280 million over the next two years, limited to a 5 per cent cap which will take care of inflation. That is the same 5 per cent cap that we are cutting back the Canada Assistance Plan. That will not be allowed to grow by more than 5 per cent. Same thing. It covers inflation for Ontario, B.C., and Alberta.


Ron J. Duhamel: Health and education.


Paul Wyatt Dick: The member forgets that in 1977 when the Liberals were in power they traded away for a couple of tax points the tie-in of EDP programs to education. Those do not mean the same thing any more. They are not tied to that. The provinces, 13 years later, would like to tie it to that. But they were told then that they would be entitled to spend it on highways, if they wanted to. They could spend it on hospitals, or they could spend it on education, but they were not required to. So that tie is no longer there as a result of the Liberal change in 1977.
March 6, 1990


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated. On debate, the hon. member for Lambton-Middlesex, and I believe it will be a 10-minute speech, plus five minutes for questions and comments.


Hon. Ralph Ferguson (Lambton-Middlesex):: Mr. Speaker, I am pleased that I am able to take part in this debate today. I am not doing it with a sense of satisfaction because when I look at this budget, and in spite of the fact it is stated there are no tax increases I am very embarrassed, as I am sure most Canadians are, about the shabby way that this budget treats our veterans.
There are 1,500 veterans in all who will be affected by this budget. It is going to cost them an additional $17.3 million. It will cost them an extra $240 a month in 1990 and $420 a month in 1991, with another $18 million cut over the next two years for heavy spring cleaning and housekeeping for veterans. This affects 60,000 veterans under the Veterans Independence Program.
I must remind this government that veterans paid their price when they walked into battle for all Canadians.
In 1985, the Conservative government doubled the board and lodging rate to $240 a month, and yet this is the first time the rate has been changed since the program was established in 1949. It is certainly not acceptable in my mind and in the minds of my constituents to cut the financial assistance for all these institutionalized veterans' room and board, home nursing and housekeeping by $35 million. Our veterans made their contribution and the government should not be betraying their sacrifice in such a callous way.
This 1990 budget also leads to cutbacks for our post-secondary school education and health services as funding for these universal programs will be decreased by $22.1 billion by 1995. This budget could well be the start of the systematic erosion of our Canadian health care system by this federal government. Our universities will be forced to admit students on the merits of their bank accounts rather than on their marks.
The federal government is quickly putting post-secondary school education beyond the grasp of many Canadians. The Canadian Federation of Students estimates that this cut will increase tuition by approximately $2,000 a year for the individual.
The Budget
Cutting $423 million in the post-secondary school budget for 1990-91 will be the equivalent of shutting down the University of Western Ontario, Fanshawe College and Lambton College for almost two years. It must also be remembered that this cut comes on the heels of an announcement last week that the Student Summer Employment Program would be reduced by $296 million over the next five years.
In terms of credibility, in the 1986 budget the Minister of Finance predicted a deficit of $12 billion for the fiscal year 1990-91 in a favourable economy. Despite the excellent economic growth of the last seven years, the minister is now projecting a deficit of $28.5 billion. This is more than twice his estimate of four years ago. Now this minister expects Canadians to believe that despite the highest interest rates in seven years; projections of 1.3 million more workers being unemployed, and overall lower economic growth the deficit will be down to $21 billion in 1992-93 and $14 billion in 1993-94. So much for his predictions. Clearly this government is abusing the faith of the taxpayers who have contributed immensely through huge tax increases and decreased government services.
If the only way the minister can manage to reduce the deficit to less that $30 billion is to increase the provinces' costs by $2.5 billion over the next two years, he has clearly mismanaged the government's finances. Either he has shifted the burden onto the backs of the veterans and the students, or onto the backs of the provinces and transferred this responsibility to the provinces.
We have also spoken in this House on a good many occasions of what is happening across rural Canada. I have to speak out on this today during the budget debate. I look at what happened as a result of the budget one year ago, the list of cuts that took place and the programs that were discontinued. There is nothing in this budget to enhance the livelihood of the people living in rural Canada. With the hardships that have unfolded over the last month and a half to two months, it is unbelievable that this government could be so callous.
For example, in the budget of 1989, $60 million was added to farm costs, $300 million was cut from several long-standing farm programs, and the federal budget last year cost the prairie farmers alone $1,000 each. The

March 6, 1990
The Budget
budget list of cuts last year was: $200 million from crop insurance, $60 million from the at and east legislation under the Department of Transport, rail branchline rehabilitation program $48 million, grain and crop advance payments $54 million, dairy exports $12 million, commodity based loans $15 million, and the Canadian Dairy Commission $10 million.
Those are actual cuts in programs that have served the farmers of this country very well over the years. To cut them at a time like this when farmers are facing tremendous economic downturns in the prices they receive is not acceptable. When I look at what has happened to compound this problem across the rest of Canada, I have to wonder just where this government is taking us.
I look at what has happened in pork production across Canada, exports to the United States have dropped dramatically in the first three weeks of January alone this year. Last year there were 12.5 per cent less producers in the province of Ontario than the year before. In Middlesex county there were 13.9 per cent less and in Lambton county 12.45 per cent less producers in one year.
This industry is being very hard-hit by the government, its programs, and particularly by the free trade agreement with the United States and the lack of an agreement with the United States that the U.S. trade remedy laws would not apply to Canada and to our exports. In the words of the Clayton Yeutter, "those laws remain intact and secure". On top of that, the Americans passed the omnibus Trade Bill in the fall of 1988 that makes a mockery of the whole free trade agreement.
Across Canada there is a forecast drop in farm income of 39 per cent for the year 1990, Manitoba will drop 87 per cent, Alberta will drop by 66 per cent, Ontario will drop by 8 per cent, but Saskatchewan's realized net income will drop by 101 per cent.
I am sure we all heard the Premier of Saskatchewan on television last night, begging for help from the federal government, help that is not forthcoming, unless the government gives him another billion dollars to help him through the next provincial election. This is what happened a few years ago. Let us see if it happens again. If it
does, we are going to be demanding that this help be available to all Canadian farmers.
I want to go a little further and make a comparison about what is happening here in Canada, where we are asked to compete for world markets. I want to put it on record that under the United States program of acreage set-asides and the target prices and deficiency payments, United States producers have a distinct advantage over our Canadian producers. All we ask is for a similar payment now that is comparable to that of the United States. Let us have it for the Canadian farmers to keep agriculture as a viable industry, to keep these people on their farms so they can produce a crop this year.
If the U.S. deficiency payment is 60 cents a bushel, and that is what is forecast for this year for com, about half is available at the time of sign-up for the program which is this month of March. That money is in their pockets so they can buy the input items needed for crops, whether fertilizer, chemicals, pesticides, herbicides or seed.
If the average yield is 120 bushels per acre, the United States producer would receive that $36 an acre this month. Converted into Canadian funds, that averages over $40 an acre the farmer will receive this month to help him through this tough period. We do not have that in Canada, because this government has failed to realize the need that we have to compete in world markets. If we are going to compete in those world markets, we have to have equal programs.
I also wish to point out the costs of these inputs are 25 per cent greater in Canada than they are in the United States. Canadian farmers do not have the support from the government. Under the current crop prices, they cannot even cash flow their input costs or their anticipated returns after harvest. It is simply not there. Consequently, the lending institutions in Canada are refusing operating loans to our Canadian farmers for this year in numbers that are unprecedented in Canadian history. It is worse now than it was in the 1930s. Last night we heard on television that one third of the farmers in Saskatchewan are in deep financial trouble and another third are in serious trouble.
We in the Official Opposition have spoken of these issues time and time again in this Chamber. We spoke of the cut-backs in the agriculture expenditures in the leaked budget of last year and the impact on the rural economy, but to no avail. I suppose with the pending election in Saskatchewan this year, this government will

March 6, 1990

again come to the rescue and provide a bail-out so our fellow Tories can continue their mismanagement of the economy in that province.
Times are tough in other sectors of the Canadian agricultural economy and farmers in all provinces need help. Farmers in Alberta, in Manitoba and in Ontario need help at this critical time of year when they are gearing up for planting. I ask this government to now make food security in Canada a matter of national security. I ask the government to act now to save this once vibrant agricultural community so that Canadian consumers will have an abundant quantity of good, wholesome, high-quality Canadian food available to them.
I ask this government to dissociate itself from the current manipulative free market system of our neighbours to the south, where the commodity exchange is being sued by American farmers for manipulation of prices, where their export enhancement program puts downward pressure on world prices. In fact, their acreage set-aside program and target prices actually impact very heavily on our world prices.
I ask this government to give notice of withdrawal from the free trade agreement and recognize that nature alone dictates that there is no level playing field.
I ask the Minister of Finance to withdraw this budget, prepare a new one, one that recognizes the importance of our resource industries that have been decimated by the policies of this government, a budget that will ensure the availability of those resources for future generations of Canadians.


James Capsey (Jim) Karpoff: Mr. Speaker, I listened with a great deal of interest to the hon. member for Lambton-Middlesex, particularly when he spoke about the credibility of the projections of the Minister of Finance and pointed out that three years ago the Minister of Finance projected that the deficit would be something like $14 billion and now it is $28 billion. It is very easy for the minister to give glowing assessments of what he is going to do four and five years in advance but they never seem to materialize.
The Budget
The hon. member is an experienced member and I am rather new in this House. I would like him to comment on the fact that, if my memory serves me, the Minister of Finance based his projections for the budget deficit on an interest rate of 10.5 per cent. Unless I have missed something in the last two or three weeks, I think that the actual bank rate is in excess of 13 per cent.
When one looks at the implications for the economy of a 3 per cent interest rate miscalculation by the Minister of Finance, the difference between 10 per cent and 13 per cent is a 30 per cent miscalculation. What impact does the hon. member feel that that has had on the deficit? What impact does he feel it has had on the farm community, particularly on farm debt, farm operating costs and farm borrowing? In fact, are many of the problems that farmers now have not due to the miscalculations of the Minister of Finance?


Ralph Ferguson: I want to thank the hon. member for the question, Mr. Speaker. He is absolutely right. The terrible mistake by the Minister of Finance and his miscalculations are such that we should demand the resignation not only of the Minister of Finance but his advisers, because this is at the root of the problem with the rural economy. We have interest rates that are 5 per cent higher than those in the United States. Our input costs on production costs alone are so much higher than those of the United States. When the interest rates are added on, it puts us in a position where we simply cannot compete as effectively for the world markets.
I strongly suspect the government is trying to keep the interest rates up to appease the corporate structures that want a higher dollar, and whether or not that is part of the free trade agreement we will probably never know. However, if the dollar is allowed to float down to perhaps the mid-seventies, then our exports will be far more competitive on world markets and-


The Acting Speaker (Mr. Paproski):: I regret that the hon. member's time has expired.


Hon. William Rompkey (Labrador):: Mr. Speaker, I am very pleased to take part in this budget debate today. This budget is just the latest wedge that widens even further the gap between the two Canadas. There are two Canadas growing in this country and they have been growing since this government took office. I am not talking about linguistic groups. I am talking about the

March 6, 1990
The Budget
wealthy Canadians and the poor Canadians, the rich and the poor Canadians, those who have and those who do not have. This budget is the latest massive wedge that widens that gap.
Let me take my own area, for example. I am not going to talk about the government's lack of action on the most critical issue and that is the fishery. I am not going to talk about the fact that there was no mention at all of the fishery, not even the word fishery was mentioned in the budget, nor were there any funds for dealing with that most serious crisis. I am not going to talk about that resource. I am not going to talk about the offshore oil. I am not going to talk about the fact that there is no ongoing development at Hibernia which would create jobs in the area which has the highest unemployment rate in Canada. I am not going to talk about the Lower Churchill. I am not going to talk about the fact that although the Prime Minister promised five times on the floor of this House in the last Parliament to develop that particular resource, it is not going. It is not producing hydro power, it is not producing economic and industrial development and jobs. I am not going to talk about that resource, or the fishery, oil, or hydro power. I am going to talk about the most important resource that we have, and that is our young people.
What this budget did was to widen the gap between our young people and their access and opportunity and young people elsewhere in the country. I am going to talk about Established Programs Financing. The government will say there were no cuts, there is an annual increase in Established Programs Financing. The reality is that the gap is growing between what the government promised and indeed what the government contracted with the provinces for transfer payments for education and health. That contract between the two powers was abrogated unilaterally by the Government of Canada and the Minister of Finance because he said: "You will not get the money you had expected, you had anticipated, we had promised, we had contracted with you."
In my own province that is $162 million over five years that goes to pay for education and health. Thirty per cent of that amount goes into post-secondary education. That means the Minister of Finance in Newfoundland is going to have to find $50 million over the next five years that he had expected the Government of Canada to pay. He
fully expected, as a result of the five year agreement, an agreement entered into by two levels of government, that he would get that money. He is going to have to find that money somewhere, because that province and that government has committed to post-secondary education as a priority, as an absolute necessity, if we are ever going to break out of this mold that we are in.
Not only did the Minister of Finance take away-or however you want to define it or describe it-$50 million from the students of Newfoundland, but in addition the Government of Canada has cut by 35 per cent the summer employment program that gives summer employment to hundreds of students in my province and in my riding that helps to finance their post-secondary education.
Third, the government has put what it calls an administrative fee, but is really a 3 per cent tax on Canada student loans which 50 per cent of all students use to help pay for their food, lodging and tuition fees.
Therefore, there is the cut in the Established Programs Financing, the cut in the summer employment program, and a 3 per cent tax on Canada student loans.
I also want to tell you, Mr. Speaker, how the government will treat students under the goods and services tax. Students with earned income of less than $6,900 will not be eligible for the goods and services tax credit. They are going to be taxed along with everyone else. They will not be exempt. This will be an additional financial burden. Sales from university bookstores will be fully taxable by the goods and services tax. Student transportation by bus, train, taxi, ship and plane will be fully taxed by the goods and services tax. Renters will not get a rebate from the goods and services tax, although purchasers of new homes, people who have their education, people who are married or young couples who want to buy homes will be able to get a rebate. Students who rent apartments or live in boarding houses will not get a rebate under the goods and services tax. Meals and take-out food will be fully taxed by the goods and services tax.
The first part of that wedge is the wedge that the minister has driven between young people in my area and in the rest of Canada. An education, I want to point

%

March 6, 1990

out, is not a cost but an investment. Let me go on to other aspects of this.
The women's program has been cut. There will be women's groups who will not be able to survive. We have already seen a number of women's organizations that have shut down in Canada because of the cut to the funds of the Secretary of State.
Let me point out the double difficulty that women find themselves in. Seventy per cent of all part-time students in this country are women. If we relate that to the point that I was making about the cuts in post-secondary education, we will see that women now are not doubly disadvantaged but triply disadvantaged by the effects of this budget.
One of the most fundamental ways in which women achieve equality is through education. There is a direct correlation between the amount of education you have and the amount of money you make in this country. If women are ever going to be able to become equal and independent, they have to have access to education. What this budget does is to say: "Shut down your offices. Shut down your affirmative action, but also you are denied further access to post-secondary education." I think that that is the real sin of this particular budget.
Let me get onto a third group that is less powerful and less rich in this country, and that is the native people. I heard the questions yesterday in the House of Commons and I heard the minister talk about increases to DIAND. Sure, there are increases to DIAND for land claims. However, the question that was not answered by the Secretary of State is why he sat at the table and allowed his native programs to be cut. Twenty-three million dollars was cut out of the program of the Secretary of State, $19 million of which was for native people.
There was a newspaper in Main, Labrador in English and Inuktitut that goes all along the northern coast and provides a voice, a meeting place and an educational tool, an expression for native people in northern Labrador. It has been completely wiped out, completely shut down, and the staff have been laid off. Your voice is muted. Your voice is cut off. Your voice is expendable because it is less powerful. The radio station in Main, Labrador in both languages of English and Inuktitut, again provided a voice for the voiceless, some political power, some expression.
The Budget
What people in the south do not understand is that we are inundated with Vanna White, with American sitcoms. It is bad enough for people who live in the south, the amount of choice they have, given the CBC, but when you live in the north it is doubly difficult to survive as a culture and as a people with the sea of programming that comes from the south. Those native newspapers and radio stations gave people in the north a way to talk back.
There were a lot of other things that happened, not just in this budget but outside this budget. Let me just tell you about one more thing, Mr. Speaker. The Post Office has said to people in the north: "You can no longer ship food through the mail." My colleague, the member for eastern Arctic raised that matter a while ago. You can ship Ski-doo parts through the mail. If your Ski-doo breaks down you can ship a fan belt or a part of your engine through the mail. You can ship any of that through the mail. But you cannot ship milk. If your baby is sick, you cannot ship milk through the mail. That is what this government has done to people in the north.
It is a vicious circle for us. We are being punished because of the hot economy of Ontario, yet more and more of our people are moving to Ontario every day. We do not want that. We want to have a way to survive in our own area as contributing Canadians and not receiving Canadians.
This budget does not help people who are weak and powerless in Canada. This budget drives a larger wedge into the ever-widening gap between the two Canadas, the rich Canada and the poor Canada, the powerful Canada and the powerless Canada, the have Canada and the have-not Canada. This government has got to be called to account for that.


The Acting Speaker (Mr. Paproski):: The hon. member will have five minutes for questions and comments after three o'clock today, if he wishes.
It being one o'clock, I do now leave the chair until two o'clock this day.
At 1.02 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
[Stage Direction]
March 6, 1990

Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, the Minister of Veterans Affairs says that there have not been any cuts to the Veterans Independence Program, yet the department itself is saying that it will save $9 million a year by cutting out heavy house cleaning for veterans.
There were only 19,000 veterans in 1989 who applied for any kind of housekeeping assistance from Veterans Affairs. Either there are a lot of wealthy cleaners in the country or the veterans are not being told the truth. I think that there is a good deal more that is being cut than just the heavy house cleaning which the government says is being cut.
The freedom and dignity of veterans to be able to remain in their own homes as long as possible is a right and not a privilege depending on the size of the deficit in this country.
Veterans have fought for their country. They have paid enough. This is the time to honour veterans, not to short change them as this ungrateful government is doing.


OPEN HOUSE CANADA PROGRAM
Guy St-Julien: Mr. Speaker, the purpose of Open House Canada was to fund reciprocal group exchange projects for young people across the country and thus increase the awareness of young Canadians in the Abitibi area of their national identity and their desire for unity.
One of this program's priorities was to organize exchanges with rural or isolated communities in Canada, and there was also a special focus on the disabled and the economically disadvantaged.
The Minister of Finance (Mr. Wilson) has dropped this program for direct exchanges between schools effective April 1, 1990, and Le Tremplin secondary school in Malartic is one of the victims.
Mr. Speaker, Canada's isolated areas deserve to see this program maintained. It is a sad commentary that this country's isolated areas have once again been hit by cutbacks.


TELEMIRACLE
Mr. Larry Schneider (Regina-Wascana):: Mr. Speaker, this past weekend the people of Saskatchewan rallied to support the fourteenth annual Kinsmen Foundation Telemiracle. The telethon raises money to help those in Saskatchewan with physical, mental and emotional disabilities.
This year's effort successfully raised $1.8 million, which is down just slightly from last year. However, given the slow prairie economy it is obvious that we cannot judge the size of the peoples' hearts by the size of their wallets. Under the present economic conditions the level of support for Telemiracle is a tribute to all Saskatchewan people.
I am told that the Kinsmen Telemiracle continues to lead the world in contributions for charity on a per capita basis.
It is apparent that Saskatchewan remains a place where people really do care about their neighbours and their communities. I know that the money raised will be put to good use and that next year's Telemiracle will be bigger than ever.
Congratulations, Kinsmen.


IMMIGRATION
Mr. Dan Heap (Trinity-Spadina):: Mr. Speaker, Associate Chief Justice Jerome of the Federal Court, Trial Division, ruled yesterday that the initial humanitarian and compassionate hearing for persons in Canada's 100,000 refugee backlog is illegal and wrongful because the minister's restrictive guidelines contradict Section 114(2) of the Immigration Act.
This means that claimants ought to be admitted on any kind of humanitarian and compassionate grounds.
In view of the huge and growing $200 million mess caused by the government's unconscionable delays and mismanagement of the refugee claims, I call on the Minister of Employment and Immigration immediately
March 6, 1990

to direct immigration staff to use the broad guidelines for long-term de facto residents in Canada as the only basis for all humanitarian and compassionate review of backlog cases.


THE ENVIRONMENT
Mr. Bob Speller (Haldimand-Norfolk):: Mr. Speaker, after 17 days of stubborn resistance the Hagersville tire fire is finally out.
Day after day I watched heavy equipment operators and volunteer fire-fighters work long hours in smoke, heat and mud. They left their jobs and their farms to fight the fire. Evacuees were taken in by friends and family.
The people of Haldimand-Norfolk have really shown us the meaning of community.
We have learned a lot about environmental disasters in the past three weeks. There is still a lot to be learned with the clean up and determining what environmental damage still may exist.
What is abundantly clear is the competent way in which the volunteer fire-fighters did their jobs and conquered the blaze. On behalf of the residents of Haldimand-Norfolk and members of the House I extend our gratitude and thanks for a job well done.
In recognition of the dedicated teamwork that is characteristic of volunteer fire-fighters across Canada, I would ask members of the House to support my motion to increase the present $500 tax exemption on honorariums these fire-fighters receive when it comes before the House. It is the least Canada can do to recognize the great contribution these volunteers make to our country.


AGRICULTURE
Mrs. Louise Feltham (Wild Rose):: Mr. Speaker, one of Canada's efforts to go global has met with success in Japan recently with the sale of 250 tonnes of beef to that country. There is also the potential for further sales in this major growth market outside North America.
The Canadian Beef Export Federation has opened an office in Tokyo. This is seen as a positive step by Japanese companies, one which will facilitate information dispersal and promote new ideas.
Agricultural producers must continue to look to the Pacific Rim countries as potential future markets and initiate the promotion of our many agricultural resources.


THE BUDGET
Margaret Anne Mitchell: Mr. Speaker, where is this government's sense of justice and reality in the priorities it chose for spending cuts?
Democracy is threatened by the slashing of $23 million in Secretary of State funding for native people, ethnic minorities and women's programs. These cuts will eliminate community services, publications and advocacy groups that are essential for powerless groups struggling to achieve equality.
At the same time as $23 million is being cut from these citizen organizations over $23 million will be spent to cover program expenditures of the decadent, unelected, patronage ridden Senate of Canada.
Women's programs which operate on a shoe string were cut by $1.6 million, while $1.6 million will be spent just to renovate committee rooms of the Senate. Women's centres that provide sanctuary, support and services for abused women, visible minority and immigrant women, poor women and those who are working long hours for equality will be forced to close, while $1.6 million desperately needed by these women will be spent to replace red carpets and gold trimming for an outdated, redundant Senate.
I call on this uncaring government to celebrate International Women's Week by changing its priorities and reinstating funding for women's programs and women's centres across Canada.
Let's abolish the Senate in favour of citizen democracy.


CANADIAN COAST GUARD
Mr. Greg Thompson (Carleton-Charlotte):: Mr. Speaker, last week the Canadian Coast Guard held a

public meeting with residents of Grand Manan Island to discuss plans to destaff the lighthouse on Gannet Rock.
This light located in the middle of the Bay of Fundy is an important navigational device for the hundreds of ships travelling to and from the Port of Saint John. The Irving Oil Company alone ships over 50 million barrels of crude oil through the shipping channels for processing at the refinery.
Fishing and tourism are the pillars of the economy for the residents of Grand Manan. An accident in the Bay of Fundy could cause an environmental disaster in the region and effectively wipe out a way of life that dates back over 100 years.
I urge the Minister of Transport to listen to the concerns raised by the people of Grand Manan and ensure the points they have brought forward will be taken into consideration prior to any final decision on the future of the lighthouse on Gannet Rock.


RESEARCH AND DEVELOPMENT
Mr. John Manley (Ottawa South):: Mr. Speaker, Canada's crisis in research, science and technology has been further aggravated by the government's decision to cut science and technology spending by $39 million and to reduce transfers to the provinces for education.
The national consortium of scientific and educational societies representing over 500,000 researchers and students is on Parliament Hill this week to tell us that the Prime Minister's rhetoric about doubling our R and D effort is simply not enough.
If Canada is to meet the challenges of a changing world, we must act now.
I urge all members to meet with the consortium and hear its recommendations.
(1)	that there be no further reduction in transfers for post-secondary education;
(2)	that the matching grants policy be incorporated into the base budgets of the granting councils and that these budgets be doubled;
(3)	that R and D performance by the federal government be increased, not diminished; and
(4)	that financial barriers to higher education in Canada be eliminated.

Unless the government acts immediately, Canada will be left behind on the international scene.


GOODS AND SERVICES TAX
Mr. David Bjornson (Selkirk):: Mr. Speaker, last night the finance critic of the Official Opposition, with one wave of his verbal wand, branded several members of the Tory back benches as being among those who opposed the GST.
Today, Mr. Speaker, I stand before you to say that I, the member for Selkirk, support the goods and services tax and, more important, the policies of the government and my colleague, the hon. Minister of Finance.
I say this as a member of the unduly generalized Tory back benches.
The goods and services tax has several advantages which the manufacturers' sales tax does not possess. One of the greatest strengths, of course, is the fact that it will benefit this country and not its foreign competitors. For this reason and many more I support the GST.
I believe the time has come for the Liberal Party to start presenting its own alternatives to the manufacturers' sales tax and stop grandstanding on an empty platform.



Mr. Joe Fontana (London East):: Mr. Speaker, this Tory government has stifled debate in the House of Commons on the goods and services tax. It has ignored hundreds of thousands of people who have signed petitions against the GST. It has paid no attention to the thousands of Canadians who have protested the proposed tax through letters and rallies even in the riding of the hon. member who just spoke. The Conservative government does not care what Canadians think about the GST. It just spends money to advertise a tax that has not yet gone through Parliament.
March 6, 1990

The Liberal Party of Canada will continue its battle against this regressive tax. Unlike the Tories, we care about what Canadians think. We want to know how many Canadians oppose the GST.
The Liberal Party is sponsoring a national week of protest against the GST from March 12 to March 16. During this week Canadians from across the country can call 1-900-720-6052 to register their opposition to the tax.


Mr. Crawford:: What was the number, Joe?


Joseph Frank (Joe) Fontana: If Canadians dial 1-900-720-6052 between March 12 and March 16, they will be sending the Prime Minister a clear message that this tax is unacceptable. Together we must make this government listen to the voice of Canadians.
Call 1-900-720-6052.


TAXATION
Mr. Rene Soetens (Ontario):: Mr. Speaker, the people of Canada were able to view clear and distinct choices of the fiscal and taxation plan for Canada as enunciated by the three parties during and after last night's televised debate.
The Conservative plan was well presented and thought out, showing that through a combination of spending restraint, personal income tax reform, corporate tax reform and sales tax reform, combined with increased economic activity in both our domestic markets and offshore markets, Canada would resolve its economic difficulties.
The Liberal plan calls for another study of taxation in Canada. All the previous studies done by the Liberal Party while it was in office would again be ignored and we would embark on a very expensive, probably useless new study.
We would include in this a review of not only taxes under federal jurisdiction but also those under provincial and municipal jurisdiction. As is Liberal policy, the result would be a massive intrusion into the affairs of others by an even bigger central government.
Then there is the NDP. It wants to continue its policy of increasing personal income taxes. Its aim is to kill the goose so that Canada can become a Third World country.
I am happy to say that I support the first plan. Cany on, Mr. Wilson.


GOODS AND SERVICES TAX
Lorne Edmund Nystrom: Mr. Speaker, it seems to me that when Canadians start calling the Liberal line on the GST they should be asking what position of the Liberal Party is that particular person supporting.
This morning in the House the Leader of the Opposition would not say whether or not he would scrap the tax if his party won the next election in Canada.
Mr. Speaker, you could choose a Liberal for almost any position. If you want to scrap the tax, there is the leadership candidate from Hamilton saying yes she would scrap the tax. We also have the finance critic for that party saying they would scrap the tax.
On the other hand, Jean Chretien, the guy who might win the leadership of that party, is saying: "I don't know what I would do if I became prime minister. I may indeed keep that tax".
We also have a Liberal Party document of a few years ago which states that they believe in a value added tax.
Then we have that great leadership candidate from York Weston who is endorsing a flat tax, as is his colleague for Broadview-Greenwood who stole the idea from Peter Pocklington of the Tories in Alberta.
Canadians are asking: Where does the Liberal party stand? Which one are we to believe? What will they do?


BALTIC STATES
Pauline Browes: Mr. Speaker, freedom and democracy are triumphing throughout the world. Across eastern Europe and most recently in Nicaragua people have voted against communist rule and in favour of democratic freedom.
Nowhere is the spark for freedom burning brighter than in the Baltic States. I was honoured to visit Lithuania as a guest of the Canadian Lithuanian Community and the Lithuanian freedom movement, Sajudis,

Oral Questions
to observe their historic elections. The results of those elections sent a clear and unequivocal message of change.
I join with all Canadians in congratulating the people of Lithuania for the elections and for their 50 years of struggle for freedom. The struggle may not yet be over, but the light of freedom is in sight.



ORAL QUESTION PERIOD


Herbert Eser (Herb) Gray: Mr. Speaker, my question is for the Deputy Prime Minister. The Deputy Prime Minister will know that this year Environment Canada says there is a strong possibility of drought in the prairie provinces.
1988 was so dry that proper moisture levels have not returned to the soil. A dry fall in 1989 and a lack of snowfall this winter may mean that the soil will still be unable to recharge its moisture content.
Yet, despite this imminent possibility, the government has cut funding for the Canadian Crop Drought Assistance Program from $788 million down to only $21.3 million, a drop of more than 90 per cent.
Why has this fund been cut more than 90 per cent when there is a real possibility that 1990 will be another year of serious drought for our western farmers?


Hon. Don Mazankowski (Deputy Prime Minister, President of the Privy Council and Minister of Agriculture):: Mr. Speaker, I genuinely appreciate-and I am sure all Canadians will appreciate it-the hon. member's interest in this very important issue. I hope, when the appropriate time comes to act on behalf of the agricultural industry and the prairie regions, that I will have the full support of the hon. member.
As he knows, we have responded in a very major fashion to the difficulties in the agricultural sector all across the country, but more particularly as it relates to western Canada. There has been a record pay-out in drought assistance of some $850 million. Improvements
were made to the crop insurance program. There were enhancements for multi-year drought situations.
We are now in the process of mailing cheques out to the three prairie provinces on the basis of the multi-year disaster benefit program. Alberta and Manitoba have received. The figures for Saskatchewan are not in. As soon as they are in there could be payments going out on supplementary drought up to $80 million.
I should advise the hon. member as well that we are looking at what further assistance might be required.
Also, we are looking at what assistance might be required in terms of providing money, cash flow, to ensure that the crop can be put in as well as the long-term interim support programs.


Herbert Eser (Herb) Gray: Mr. Speaker, the issue is not whether he and the government will have the support of the Official Opposition on this matter, but whether he will have the support of the Minister of Finance. That is the big question.
I have another question for the Deputy Prime Minister.
Last night the premier of Saskatchewan spoke on television and indicated that he had spoken with the Deputy Prime Minister and that the Deputy Prime Minister had agreed, and I quote, "to work out the farm financial crisis".
The Deputy Prime Minister knows that the farm financial crisis affects farmers in many provinces, not just Saskatchewan.
Can the Deputy Prime Minister assure this House and the farmers of Canada today that any financial assistance program for farmers will be available in all the provinces and not simply be confined to one province?


Donald Frank Mazankowski: Mr. Speaker, as I have indicated to the House before, we have put together a federal-provincial review committee to assess the impact of the shortfall and to assess the application of the existing programs, that is the multi-year disaster benefit program which was an enhancement to the crop insurance program incorporated last year.
We also have improvements to the crop insurance program currently before the House which will provide
March 6, 1990

more long-term enhancement for crop disasters arising from drought and other weather conditions.
I can assure the hon. member that as soon as the reports come in from the federal-provincial monitoring committee which affects the industry right across the country we will assess it, look at options and come up with an appropriate program that will be cost shared as has been indicated by the respective Ministers of Agriculture of the provinces.


Herbert Eser (Herb) Gray: Mr. Speaker, I hope western farmers and other farmers across Canada will not have to wait as long for any special program as the fishermen of Atlantic Canada have been waiting. They have hurt a lot and they have got nothing so far.

Mr. Speaker, the Premier of Saskatchewan also said that, together with the Deputy Prime Minister, he would be meeting representatives of our major financial institutions, to determine ways of helping farmers who are having trouble restructuring their debts.
My question for the Deputy Prime Minister is this: Can he guarantee that the government will make the banks and various loan institutions help our farmers restructure their debts? Can he also guarantee before this House that he will take action before all family farms in this country have disappeared? Could he answer this question right away?


Donald Frank Mazankowski: Mr. Speaker, it is quite true that I have met with the premier of Saskatchewan. It is recognized that the problem in Saskatchewan is very critical because of the drought and because of its particular type of agriculture, which is basically grain and oilseeds.
The problem is threefold. First, there is the issue of the current shortage of cash to get the crop in. Second, there is the long-term debt situation. Third, it relates to the long-term income support program which is part and parcel of the agricultural review.
As the hon. member should know, the grain stabilization programs and the safety nets that have been in place
Oral Questions
have been put through the supreme test. We are in the process of re-evaluating and re-examining in an attempt to come up with better safety nets. That process is ongoing.
Whatever we do in the course of providing long-term income support, we hope that it can lead to a longer term support system.
In so far as his reference to the banks is concerned, yes, we do meet on a regular basis. Inasmuch as we have met on previous occasions with the banks and other lending institutions, we will be undertaking the same thing to ensure that there is that kind of compassion to which the hon. member refers.
I should also point out that the farm debt review board was an initiative of this government and that process has gone a long way to alleviating some of the difficulties and the hardships as they relate to farmers who are found to be in serious difficulty in defraying their payments and dealing with their long-term debt program. We intend to continue to work in that regard as well.


IMMIGRATION
Sergio Marchi: Mr. Speaker, in the absence of the two ministers responsible for immigration, I direct my question to the Deputy Prime Minister.
Yesterday, in a landmark ruling, the Federal Court ruled that the government's system to process the over 125,000 refugee claimants in the refugee backlog is illegal. This ruling serves to confirm the concerns that we on this side of the House have been expressing and raising with the government for months on end.
In light of this fatal blow from the Federal Court, will the government do the right and appropriate thing and abandon its current refugee backlog clearance system and replace it immediately with a fair, more efficient, more humane administrative review, something that the Official Opposition had asked this government for over one year ago?


Hon. Marcel Danis (Minister of State (Youth) and Minister of State (Fitness and Amateur Sport) and Deputy Leader of the Government in the House of Commons):: Mr. Speaker, the Minister of Employment and Immigration has not yet had an opportunity to study the reasons for the court's decision, as the court has yet to release those reasons. It would therefore be prema-

March 6, 1990
Oral Questions
ture to comment upon the possible impact of the decision.
However, the Minister of Employment and Immigration and her officials have had an opportunity to review Justice Jerome's oral reasons, and appropriate decisions will be made quickly as to how the government will react.


Some hon. members:: Hear, hear!


Sergio Marchi: Mr. Speaker, I wish to also congratulate the minister who has been elevated to cabinet with new responsibilities. Not to undermine his appointment, the refugee claimants, the system and Canadians deserve a better answer.
I would like to put my question again to the Deputy Prime Minister. The government cannot run or hide from the reality that the backlog system has been universally condemned, whether by the NGOs, the parliamentary committee or the legal entities of our country.
Given that only 6 per cent of all claimants have been processed, that it will take six years to clear the backlog at the present rate at a $200 million expense and at an increased human expense in terms of human misery, why is the government stubbornly refusing in the face of this mounting opposition simply to repeal and fix not only a broken system, but a system that has now been rendered illegal by our courts?


Marcel Danis: Mr. Speaker, I would like to remind the hon. member that each person in the backlog has made a claim to be a convention refugee and therefore is entitled to a decision on the merits of that claim. The primary question, therefore, continues to be one of refugee determination.
This government is aware of the concerns of backlog claimants and of the interest of Canadians in seeing this issue resolved. We will respond to Justice Jerome's decision as quickly as possible but cannot at this time engage in speculation which can only add to the uncertainty experienced by backlog claimants.


THE BUDGET
Ms. Audrey McLaughlin (Yukon):: Mr. Speaker, my question is for the Minister of Finance.
In the recent budget the Minister of Finance and this government cut $3 billion from programs which aid battered women, the regions, support post-secondary education and provide minimal assistance to the poor, as well as other programs that address those areas in our society.
At the same time tax breaks for large corporations were allowed, and I cite some examples. Brascan earned some $262 million last year and paid not one cent. Edper Enterprises made $52 million and paid not one cent. Fletcher Challenge made $24 million and paid not one cent.
Is it not now time to introduce a minimum corporate tax so that everyone pays their fair share?


Geoff Wilson: Mr. Speaker, as a result of a number of decisions that this government has taken both in corporate income tax reform in 1987-88, as well as a number of other times during the course of the past five years, we have removed many, many tax loopholes that large corporations have been using. There are reasons individual corporations that are profitable are not paying taxes.
If she wants to identify a specific tax provision that she wants to see removed that allows for these corporations not to pay tax, one of them being the fact that they have losses in previous years and carry forward those losses to apply against current year profits and apply their taxes on that, then let us listen to and hear what she has to say.
I hear again that she is calling for a corporate minimum tax of 20 per cent. Small businesses pay a corporate tax of 12 per cent. How is she going to deal with the thousands and thousands of small businesses which are only paying 12 per cent tax?


Audrey Marlene McLaughlin: My supplementary is directed to the Minister of Finance. In his budget, the Minister cut transfer payments for health and postsecondary education by about one billion dollars this year and 1.5 billion for next year.
March 6, 1990

Meanwhile, deductions for business meals and entertainment have been maintained. These deductions represent a total of nearly one billion dollars annually.
Will the Minister of Finance finally decide to abolish these deductions which are unacceptable and make the government lose such vast amounts of money?


Geoff Wilson: Mr. Speaker, these deductions are important to businesses competing with the United States that have that precise same tax deduction. We need a tax system in Canada that is competitive with the United States. This is very important to the creation of jobs in Canada.
If we are to have a corporate tax system that is not competitive with the United States, that has higher tax rates than the United States, then a very simple result will happen.
Companies are going to settle in the United States. They will create new investment in the United States and with that jobs will be created in the United States and not in Canada.
If the New Democratic Party policy is to move jobs from Canada to the United States, then that is exactly what will happen with the policies that she is proposing.


Audrey Marlene McLaughlin: Mr. Speaker, the biggest policy which has moved jobs from Canada to the United States is the trade deal and the minister knows that. I also remind the minister that the United States has a minimum corporate tax.
In 1987, when the Minister of Finance introduced the budget he said and I quote:
Our fundamental strategy in reviewing the corporate income tax is
to ensure that profitable corporations pay their fair share. We must
further reduce the source of the problem by cutting back special
corporate tax write-offs.
In spite of that promise, corporate profits that escape tax have grown from $15 billion to $27 billion since he took that job. How does the minister justify these tax cuts to large corporations when he is asking every Canadian to pay an extra 7 per cent through the goods and services tax?
Oral Questions


Geoff Wilson: Mr. Speaker, the hon. member has raised four specific points in that question and I want to address each one of them.
First, in the last couple of years we have had very high levels of investment in this country directly related to companies getting ready for the free trade agreement, and that has created jobs here in Canada. It has created a more competitive Canadian economy precisely as a result of the free trade agreement.
The second point that my hon. colleague makes is that there is a corporate minimum tax in the United States. She is correct. There is also a much higher tax rate on small businesses in the United States. Is she proposing that we increase the tax rate on small business so we can have a corporate minimum tax here? I do not think so but that is the result of the question that she has asked.
The third point I make is that corporations today are paying more tax, including corporations that were not paying any tax before. Her colleagues have asked in the past how a bank teller could pay more tax than the bank itself. As a result of corporate income tax reform in 1988, banks today are now paying hundreds of millions of dollars of corporate tax, directly as a result of corporate tax reform.
The final point that I would make with my colleague in response to her question is that corporate profits are down this year. That is one reason why corporate taxes are down. If she looks at the effective corporate tax rate this year compared with 1987 she will see that the effective corporate tax rate is up this year compared to three years ago.


AGRICULTURE
Mr. Maurice Foster (Algoma):: Mr. Speaker, my question is for the Minister of Agriculture, the Deputy Prime Minister. Last November I asked the minister what action he was prepared to take in light of the demand by the Saskatchewan Wheat Pool and other groups like the Ontario Com Producers to assist in the farm financial crisis facing farmers right across the country. Since November the situation has worsened: moisture levels are low, world grain prices are low, farm debt is worse and interest rates have risen.

March 6, 1990
Oral Questions
Why do the Deputy Prime Minister and the government refuse to act in light of this tragedy facing Canadian farmers?


Donald Frank Mazankowski: Mr. Speaker, the federal government is not refusing to act. It is very active in assessing the magnitude of the difficulties and trying to bring about and look at a number of options.
We are still waiting for the preliminary crop data from the province of Saskatchewan so we can send out the supplementary drought benefit payments which are due to them as a result of the enhanced crop insurance program that we put in place last year. We must have that information before we can accurately define the problem. When we accurately define the problem we will accurately provide a solution.


Maurice Brydon Foster: Mr. Speaker, in 1986 the Prime Minister provided $1 billion when the Premier of Saskatchewan was facing a political disaster in the middle of an election campaign.
Now, tens of thousands of farmers face the loss of the land, including the premier himself. With seeding only two months away, can the minister say when he is going to act? Is he going to respond to the demand the premier made last night that at least $500 million be provided for spring seeding, which is only a couple of months away, so that these farmers can get ready for the crop year? Will he provide the equivalent proportionate amount of money to other farmers across the country? Will the Deputy Prime Minister respond?


Donald Frank Mazankowski: Mr. Speaker, as I indicated to the hon. member earlier, we are assessing the magnitude of the difficulty and are trying to devise some options that will respond to that difficulty.
As I indicated, we are eager to send out supplementary drought cheques. The cheques have gone out to the province of Manitoba and the province of Alberta under the multi-year disaster program. Saskatchewan could be receiving up to $80 million under that particular program depending upon the figures, when they come in.
We are also looking at what might be necessary in terms of short term cash flow necessity, as well as the longer term income support which hopefully can be tied into a long term safety net proposal that is currently being discussed by a special committee that was set up. We are not stepping away from the problem; we have not in the past, we are not today and we won't in the future.
* * #


THE BUDGET
Hon. Lloyd Axworthy (Winnipeg South Centre):: Mr. Speaker, I have a question for the Minister of Finance. He has just heard his colleague, the Minister of Agriculture, commit to providing major assistance to farmers across Canada as they face drought conditions, financial debt problems and increasing international competition.
I have a very simple question for the Minister of Finance. Where is the money going to come from? The Minister of Finance has cut the drought assistance estimates by $736 million. He has cut the reserve fund by 47 per cent. He has committed to the financial markets to hold the deficit line at $28.5 billion to meet his interest rate projections. There is no flexibility, no reserve and no contingency.
Will the Minister of Finance guarantee today that he will live up to the financial commitment?


Geoff Wilson: Mr. Speaker, what I will commit to today is that I will not go through with the spending record of the former Liberal governments: 1969 to 1970, 1970 to 1974, 17.9 per cent annual increase; 1979-80 to 1984-85, 14 per cent.
We have held our spending at 3.6 per cent. We are committed to holding it this year to a 3 per cent increase.


Rex Crawford: Answer the question, Mike.


Mr. Wilson (Etobicoke Centre):: The answer to the question is that we have taken the prudent action of having reserves that are in our spending program this year so we can respond to contingencies like my colleagues talks about in the agricultural sector-


Ms. Campbell (South West Nova):: When?


Michael Holcombe Wilson: -like colleagues opposite have asked on the fisheries issues. We have moneys-
March 6, 1990


Coline M. Campbell: We haven't seen it. We have gone bankrupt.


Michael Holcombe Wilson: Well now the hon. member's mouth is moving faster than her brain.


Coline M. Campbell: Do something. People are going down.


Mr. Speaker:: The hon. member.


Lloyd Axworthy: Mr. Speaker, the Minister of Finance is simply blowing in the wind. He knows that his government has made commitments to bail out fishermen. He is now saying they have money in the reserve fund for the farmers, but he has cut the reserve fund by 47 per cent.
There is no money there to meet these commitments. We want to know when this government is going to speak straight with the Canadian farmers and when it is going to answer the premier of Saskatchewan who said the federal government has now declared war on the prairie provinces? When is this government going to stop declaring war and start helping the fundamental farm and fish sectors of this economy?


Geoff Wilson: Mr. Speaker, I think we have demonstrated clearly in the past that when there is a problem we will address it. We have indicated clearly that there are amounts of money in the reserves. When the consultation process described by the Minister of Agriculture has been completed, then we will be in a position to announce that.
In the case of fisheries, when consultations are completed on the question of fisheries, then we will be able to announce the additional-


Coline M. Campbell: When? You said that a year ago.


Michael Holcombe Wilson: Now the hon. member from Yarmouth keeps yelling over there, and she should realize that we have already-


Coline M. Campbell: You don't know. You don't see the people.


Michael Holcombe Wilson: Mr. Speaker, maybe you should advise the hon. member that it is hard to hear when her mouth is going all the time.


Mr. Speaker:: The hon. member for Mackenzie.
Oral Questions


AGRICULTURE
Mr. Vic Althouse (Mackenzie):: Mr. Speaker, my question is directed to the Deputy Prime Minister. I note in his responses on the agricultural question that both he and the Minister of Finance seem to think what they have is a problem with an old drought.
I would like to switch their attention to a more current problem, the problem of not being able to be competitive with the United States because our assistance programs do not match theirs, something the Minister of Finance alluded to, and the problem of the continuing escalation of the war between the Americans and the Europeans to reduce world grain prices.
Canada had an almost statistically average crop last year and yet incomes are falling to the point where there is less than zero realized net income expected in the province of Saskatchewan this year. Where is the aid that the Deputy Prime Minister has been promising would come in recompense against those grain wars? We have six weeks until seeding starts and banks are refusing to give money to farmers until they know where they stand. When will he announce, who will get it and how much will it be?


Donald Frank Mazankowski: Mr. Speaker, I appreciate the hon. member's question and the sincerity with which he asks it. I can respond in an equally sincere manner.
The fact of the matter is that we have put together a federal-provincial committee to assess the situation and to look at the application of existing programs. Quite frankly, unbeknown to most farmers, they are going to be receiving supplementary drought assistance payments as a result of the multi-year crop disaster enhancement that was put in place.
We are looking to see how that will fill that particular void. We are looking at ways and means of coming up with some cash flow to help farmers put their crops in. We are looking at the long term income system and hopefully that can be tied to improvements in the safety net.
This government has responded to the international price wars in the past. It is prepared to do so again. But I remind the hon. member that the level of enhancement has reduced quite substantially. In 1986 and 1987, the EEP was subsidizing grain and oilseeds to the tune of

March 6, 1990
Oral Questions
about $200 per tonne, today it is about $80 per tonne. The United States is subsidizing under the EEP about $20 per tonne. In the meantime grain prices have increased between 1986 and 1989 by roughly 50 per cent.
All of those things have to be taken into consideration and I am sure my hon. friend will realize that you cannot merely pull a figure out of the sky. We are assessing the magnitude of the problem, we are assessing it accurately and we are going to respond in an accurate and full manner.


Victor Fredrich (Vic) Althouse: Mr. Speaker, I believe that the hon. minister is trying to do something. He said so numerous times in this House and thousands of other farmers believe him as well. But the banks will not lend money on that. When is he going to put some dollars up so that we can decide whether we are going to have farmers putting in crops or farmers leaving the farms. That is what it has come to as far as most of the banks are concerned right now.


Donald Frank Mazankowski: Mr. Speaker, I can advise the hon. member that we have been working on this matter since the first of the year. The initial reports are coming in but I remind him again that at the present time we are waiting for crop insurance data from the province of Saskatchewan to complete the payments under the multi-year disaster program. This is the kind of information that we need. We are now in the process of looking at what the initial prices will be and I am sure my hon. friend will recognize that all of those things have to be taken into consideration before a full solution can be provided.


VIA RAIL
Louise Feltham: Mr. Speaker, I have a question for the Minister of Transport. The Banff Chamber of Commerce reports that business in its area appears to have slowed down this winter, in part due to the VIA Rail cuts. VIA has received many proposals for the privatization of a system to supply rail services between Calgary and Vancouver.
When can the people of this area expect the resumption of a continuous rail service, a service which is crucial to their livelihood and which was promised to them by the previous minister?


Hon. Doug Lewis (Minister of Transport):: Mr. Speaker-


Some hon. members:: Hear, hear!


Douglas Grinslade Lewis: I am a little nervous when the opposition claps too.
I wish to advise the member that proposals for privatization have been received. The bids closed on January 15.1 am advised that VIA is examining the bids, and they expect to be in a position to make a recommendation to the government by the end of March.


IMMIGRATION
Hon. Warren Allmand (Notre-Dame-de-Grace):: Mr. Speaker, in the absence of the Minister of Immigration my question is directed to the Deputy Prime Minister.
Yesterday, the Federal Court quashed Conservative legislation that was supposed to deal with the backlog of applications for refugee status.
The minister is aware that the refugee backlog is estimated at more than 100,000, and that many claimants have been waiting for a decision for three years. The saddest cases are those where parents have been separated from their children for several years, pending a decision allowing them to enter Canada.
Mr. Speaker, is the government at least prepared to allow these children to be reunited with their parents who have sought refuge in Canada, until a decison has been handed down in their case?


Marcel Danis: Mr. Speaker, we are of course aware of the judgment that was handed down yesterday by the former Speaker of the House of Commons, Mr. Justice Jerome. We are now looking at the situation and considering the judgment, and we will give our response as soon as possible.
March 6, 1990


William Warren Allmand: Mr. Speaker, I will direct my supplementary question to the chairman of the Standing Committee on Immigration.
It is wrong to keep human beings waiting so long without a decision, and it is even worse to keep them separated from their young children. This problem requires a humanitarian approach, not a legalistic one.
The Standing Committee on Immigration conducted a long study on this matter and put out an important report in December in which it made serious recommendations to the government to improve the refugee situation.
Will the chairman of the committee call a meeting of the committee as soon as possible, call the minister before the committee and have her explain to the committee what she is going to do about this decision of the Federal Court and impress upon her the recommendations of the standing committee to speed up this process?


Mr. Jean-Pierre Blackburn (Jonquiere):: Mr. Speaker, tomorrow the steering committee of the Standing Committee on Labour, Employment and Immigration will meet in order to study the judgment handed down yesterday by Mr. Justice Jerome, as well as other business to be undertaken by the Standing Committee including the Estimates which are also on the agenda for tomorrow. Of course, tomorrow, we will start analysing the report we tabled in the House on the refugee backlog which is directly related to the judgment.


VETERANS AFFAIRS
Mr. Fred J. Mifflin (Bonavista-THnity-Conception):: Mr. Speaker, my question is directed to the Minister of Veterans Affairs.
Why did he say yesterday that there were no cuts in veterans' benefits when reduction in the veterans' inde-
Oral Questions
pendence program in the words of the recent budget at page 84 "will save an estimated $18 million"? Why?


Hon. Gerald S. Merrithew (Minister of Veterans Affairs):: Mr. Speaker, yesterday they were talking about budget cuts. I mention again that there were no cuts in the actual dollars of expenditures in the department, and in fact with the veterans' independence program, there are major increases in that spending.


Fred J. Mifflin: Mr. Speaker, my supplementary is directed to the same minister, who said: "I assure the hon. member that there have been no cuts made at all".
The government's own documents state that the veterans receiving assistance under the veterans independence program, which is designed to care for them at home, will no longer be reimbursed for heavy housekeeping services to the tune of $18 million.
The average age of Canada's veterans is 70 and this is an essential service to them. This $18 million cut is counter to the aim of this program. I would like to ask the Minister of Veterans Affairs why he has allowed this to happen.


Gerald Stairs Merrithew: Mr. Speaker, to repeat, the heavy housekeeping unit of that program is in the veterans independence program. That particular program has been increased 66 per cent in this year's budget.
I want to say to the hon. member that there will be no additional costs to any veteran for moving from his own home into a hospital, and we can guarantee that. We can ensure that because each of these charges is means tested.


Some hon. members:: Oh, oh!


NATIONAL DEFENCE
Mr. Derek Blackburn (Brant):: Mr. Speaker, my question is directed to the Minister of National Defence. At a time of declining east-west tension and limited defence dollars, can the Minister of National Defence explain the utility of continuing to invest over $1 billion, including

March 6, 1990
Oral Questions
more than $300 million this fiscal year, in the air defence system known as ADATS, a system plagued by many failures and deficiencies, while at the same standing back and allowing the Polar 8 ice-breaker program to be axed?


Hon. Bill McKnight (Minister of National Defence):: Mr. Speaker, the hon. member draws attention to a capital expenditure for equipment that is needed. I would like the hon. member to understand that the low level air defence is designed to defend Canadian men and women and Canadian air pilots-


Derek Nigel Ernest Blackburn: In Europe.


William Hunter (Bill) McKnight: -and Canadian assets in a stationed atmosphere, particularly in central Europe today. As the hon. member knows, it is something that was lacking, it is something that will continue to be important, it is something that we will continue to do in an acquisition point.
The hon. member suggests that there are problems with the ADATS, but I can tell him that there is an opportunity where other countries are looking to purchase the very same equipment that he is being critical of in Canada.


Derek Nigel Ernest Blackburn: Mr. Speaker, in the first place, this equipment is designed to be used in Europe and only in Europe. Within the next couple of years in all likelihood our troops are going to be back here in Canada. More important, Oerlikon has had to fire managers on the project, quality control has been condemned by the United States Defence Department, and markets are non-existent. The Netherlands, South Korea, Finland and Turkey have all turned it down. Now I have a report in my hand from the United States which states that it is working at only 5 per cent efficiency.
Why is the Minister considering going ahead with this wasteful program that is probably going to lead nowhere and for no purpose?


William Hunter (Bill) McKnight: Mr. Speaker, the hon. member in his assertions that other countries have not made a decision to acquire the low level air defence that is produced by Oerlikon is taking initial tests out of context, and making decisions
and attributing them to other countries. He mentioned the Netherlands.
To my understanding, and maybe my colleague the Minister for International Trade could substantiate this, that decision has not been made by the government of the Netherlands. I ask my colleague to have patience.


James Capsey (Jim) Karpoff: A billion dollars worth of patience?


William Hunter (Bill) McKnight: No. What hon. members have to understand is that the men and women who serve in Canadian forces desire and need protection. Low level air defence was not available to those men and women. It has been developed in Canada. It has jobs for Canadian men and women. It has brought employment.


Derek Nigel Ernest Blackburn: They are coming out of Lahr.


William Hunter (Bill) McKnight: Now the member says we are coming out of Lahr. Obviously, he has made a decision before the rest of the allies.


NAVIGATION
Gregory Francis Thompson: Mr. Speaker, my question is directed to the Minister of Transport. As the minister is aware, there is a proposal by the coast guard to de-man the lighthouse on Gannett Rock, which is off Grand Manan in the middle of the Bay of Fundy. It is a very busy navigational area and shipping lane.
My question to the minister is simply this: is the proposal to de-man this lighthouse a final proposal? Will it be accepted by the government and, if so, what assurances can the minister give us that the environmental and navigational concerns being expressed will not be compromised?


Douglas Grinslade Lewis: Mr. Speaker, I know the interest my hon. friend has in this particular issue. There have been consultations between the coast guard and local people who are interested in the issue. I understand that they are examining the issues and it should be finalized in the veiy near future with the concerns of the local people taken into account.
March 6, 1990


HERITAGE LANGUAGE EDUCATION
Mrs. Shirley Maheu (Saint-Laurent-Cartierville):: Mr. Speaker, my question is directed to the Secretary of State and Minister of State for Multiculturalism and Citizenship.
It is a fact that the government cut $4.1 million from the Heritage Language Education Program in 2,000 schools.
I ask the minister to explain to the Canadian people why this government is committing $6 million and establishing an institute at the same time that it is cutting educational programs. Is what the government is proposing an empty shell?


Hon. Gerry Weiner (Secretary of State of Canada and Minister of State (Multiculturalism and Citizenship)):: Mr. Speaker, reductions are always difficult. The budgets of our two departments were reduced by about $23 million. Times are tough. We must do something with our deficit to ensure a more prosperous, more secure future.
Our duty is to deliver programs in the best way possible and we shall continue to do so.


Shirley Maheu: My supplementary is directed to the same minister, Mr. Speaker. I refer to the Multiculturalism Act of 1988. The government's stated policy is to preserve and enhance languages other than English or French.
In its budget the government has cut financing for heritage language schools. This flies in the face of its own stated policy. Why?


Gérard (Gerry) Weiner: Mr. Speaker, restraint is always difficult and we certainly had to be sure in evaluating all the priorities of the department that we were continuing to provide Canadians with the best possible service. It is about time that heritage language schools stopped being marginalized. Others can participate and contribute to their growth and development.
Our commitment to multiculturalism is very clear from what we have done in terms of our Race Relations Program Community Support and Participation Program, and the Canadian Heritage Language Institute that will be established. Some funding has been reduced
The Budget
but there are significant amounts of money that are still there for heritage cultures and languages.


THE BUDGET
Russell Gregoire MacLellan: Mr. Speaker, my question is directed to the Deputy Prime Minister. Yesterday the Prime Minister said that since 1985 there have not been any cuts to native programs, yet the budget completely does away with the native communication program which funds very important projects like the Mic Mac News, the only major native newspaper east of Montreal.
Why is the government giving the impression that it is helping the Micmac people when all it is really trying to do is silence them?


Hon. Thomas Siddon (Minister of Indian Affairs and Northern Development):: Mr. Speaker, as I indicated in the House yesterday, the government continues to help all of the native people of Canada and to increase funding by $182 million in the coming fiscal year in the form of increased program funding for health, education, social and economic development programs directed to the native people across Canada.


Mr. Speaker:: A very short supplemental.


Russell Gregoire MacLellan: Mr. Speaker, just last month the Marshall inquiry said that the Micmac people should have a greater voice in Nova Scotia. What kind of reward is that? What kind of greater voice is this when the government is cutting out the Mic Mac News'? Why is the government stifling the voice of the native people? It is cutting programs. Admit it, and correct it.


Thomas Edward Siddon: Mr. Speaker, if the hon. member will examine the Estimates of the Department of Indian Affairs and Northern Development, he will find that core funding for all of the native organizations in Canada has been preserved and that the programs will continue to serve the best needs and the requirements of the native peoples of Canada.

March 6, 1990
The Budget



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson (Etobicoke Centre) that this House approves in general the budgetary policy of the government; and the amendment of Mr. Young (Gloucester) (p.8636).
The Acting Speaker (Mr. Paproski):: When the House rose at one o'clock the hon. member for Labrador had completed his speech. The question and comment period following the member's speech is now available to members. Since he is not in the House, on debate, the hon. member for Fredericton-York-Sunbuiy.


Mr. J. W. Bud Bird (Fredericton-York-Sunbury):: Mr. Speaker, I appreciate this opportunity, unexpected though it is at this very moment, to participate in the budget debate. I am very proud to have the opportunity to address this House on what I consider to be an outstanding 1990 budget.
Following a steady course since 1984, the Minister of Finance has again constructed a budget for the coming fiscal year which directs Canada toward financial integrity and economic responsibility. In so doing, the government will be compelled to introduce some difficult and initially unpopular expense control measures, but for the first time in more than two decades we have a federal budget with no new taxes.
Thus, we see a budget plan that responds to the demands and the needs which have been expressed by Canadians. For many months now, the message from all parts of the country has been clear; continue the attack on the debt and the deficit, but intensify the strategy to cut spending and do not increase the tax burden at all. This budget reflects that strategy in very strong and sound ways.
In actual fact, however, if there is any one major criticism which I have heard about this budget, it is that the budget does not go far enough. The national will for financial discipline is very strong indeed and the average citizen fully supports a government mandate to put our financial house in order. What that average citizen demands, though, is evidence and commitment that the
measures which have been taken will truly be applied to solve Canada's financial problems, and not merely used to support or expand government spending programs. This budget provides such assurances in a very clear manner.
First of all, it confirms the accuracy and integrity of the current year's Estimates, which will result in a deficit of $30.5 billion as predicted one year ago. This is a remarkable accomplishment in its own right, because the past year has been fraught with unexpected economic adversities such as persistent inflation and high short-term interest rates. Fortunately, the economy has remained relatively strong, employment has remained at high levels and government revenues have increased as a result. Longer term interest rates have declined somewhat to help moderate government debt service expense. The net result is that the 1989 deficit forecast is right on the money, which is a continuing basis for confidence in the 1990 Estimates and in the five-year forward projections which accompany it.
The budget aims for a steadily falling deficit over the next five years and onward to balanced budgets and eventually, I hope, to surpluses after that. The deficit will be $28.5 billion in the new fiscal year and $26.8 billion in the 1992 budget. It is predicted that we shall be able to start redeeming bonds and paying down some of our national debt in the 1994 period.
Just imagine for a moment-that will prove the first time in 20 years Canada has actually lived within its means for a full fiscal year. What stronger or clearer commitment could any government make in response to its financial mandate.
The deficit targets for the next two years deserve special mention because they reflect significant provisions of $2 billion in extraordinary expense in each of those periods to pay major start-up costs of the goods and services tax program as it replaces the federal sales tax system commencing on January 1, 1991.
These costs will really be significant benefits to many Canadians-advance rebates of almost $1 billion as promised to low-income families before the GST even commences in December of this year, and about $3 billion to Canadian businesses for GST rebates on existing FST-included inventories and for one-time
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payment of transitional expense up to $1,000 per business.
Here is hard evidence of the practical benefits which the goods and services tax program will bring to low-income Canadians and to many small and large Canadian companies. We have clearly budgeted $4 million, with cheques to be issued over the next 24 months. Here is hard evidence also of the deficit reduction progress really to be found in this budget.
Without these extraordinary one-time expenses, the next two years would be $2 billion lower in each case. Once those expenditures are out of the way, the subsequent diminishing deficit projections between 1992 and 1994 become all the more credible at $21 billion, $14 billion, and $10 billion respectively. Truly we can now see light at the end of Canada's financial tunnel.
That this 1990 budget marks a crossroads in Canada's financial affairs has never been in doubt, and the directions to be taken have been hotly debated in every comer of the country. The options have been advanced in a variety of policy formats: new taxes, moderate spending, drastic expense cuts, lower interest rates, higher inflation, a lower dollar, increased exports and so on. But in my view, the proper course has been selected.
With our national debt at $350 billion and growing at the rate of almost 10 per cent per year-and it could touch as high as $.5 trillion before we turn it around- this government is taking the tough tack through perilous waters, where the reefs have names like "recession" and "inflation", but where also lies the charted course toward calmer financial seas and toward fairer winds for future economic growth.
The restraint measures of this budget should help to contain inflation, which in turn should help to moderate interest rates, which then in turn should also stimulate renewed economic growth within our stable capacity to manage it.
I feel confident that this approach is the right one, that recession can be avoided and that stability and new progress will be achieved. This budget is not only a tough and a responsible one, it is also a fair and a sensitive one. Again, to ensure emphasis, it bears no new taxes. But even more important, there are several critical exemptions for people from the expense-control plans, namely, elderly benefits, family allowances, veterans pensions, and unemployment insurance payments. These constitute a continuing shift of the budget and taxation burden off the shoulders of low-income Canadians and are
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consistent with such measures introduced in previous budgets of the Minister of Finance and in tax reform bills.
Slowly but surely taxation relief and social security are being put in fair balance in Canada for those most in need of them.
Perhaps the most telling and yet sensitive policy initiatives for expense control in this budget are to be found in restraints applied to provincial transfer payments. As was expressed so well in a Montreal Gazette editorial last week, the funds for all levels of government come from the same ultimate taxpayer, so it is nonsensical to expect federal transfers to provinces to remain untouched when they constitute such a major item of federal spending.
To their credit, many provinces have been balancing their budgets, but this becomes a sort of phantom accounting when large portions of their revenue come from a federal budget which is on the edge of insolvency. Clearly, the provinces' transfers are part of the national financial problem, and so they must realistically be part of the solution. As a result, Established Programs Financing has been frozen per capita at 1989 budget levels and Canada Assistance Plan transfers will be limited to a growth of 5 per cent annually in Ontario, Alberta and British Columbia.
What is most significant in terms of this budget's fairness and sensitivity is the fact that all other provinces which qualify for equalization payments will be exempted from the CAP limits, as will the equalization program itself be exempted from the expense control plan. Equalization payments will continue to flow to the provinces in the same proportions as they have traditionally.
These exemptions are an innovative recognition that regional economic disparities and imbalances do exist in Canada and that reciprocating advantages must be provided to fairly balance the application of economic policies. This is not possible with some options such as interest rates where selective application would be non-viable but the unbalanced approach to restraint measures as used in this budget do go far to achieving a fair balance of economic policy right across Canada. For example, total federal transfer payments to Atlantic Canada will grow at the rate of 4 per cent in the coming year while they will also be held to a rate of only 2.3 per cent in Ontario. That does seem fair, given the compara-

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tive levels of economic activity between Atlantic Canada and Ontario.
In fact, in my own province of New Brunswick, the Liberal government of Premier McKenna has publicly expressed acceptance of, if not support for, this 1990 federal budget. Although the new restraint measures do have significant impact on New Brunswick to the tune of $25 million in 1990 and almost twice as much in 1991, nevertheless these reductions amount to less than 1 per cent of total provincial revenues.
By contrast, the aggregate of all federal transfers to New Brunswick year after year, account for more than 40 per cent of all New Brunswick's budget revenues. As in New Brunswick, so is the case with most other provinces. No group should be more vitally concerned about supporting the financial health of the federal government than the finance ministers of those provinces and their premiers.
The opposition financial critic has been quick to claim that restraints on provincial transfers will lead to higher taxation by the provinces. His case is weak in the extreme. For example, in New Brunswick the provincial government indicates that it should be able to balance its own 1990 budget and acknowledges that program spending restraint to follow the federal example may be the most reasonable course. Perhaps federal Liberals should consult with their provincial colleagues to learn and understand that small "c" conservative financial responsibility is conventional wisdom these days in Canada and that big "C" Conservative financial policies are receiving strong public support.
One of the best cases to be made in this regard is the disciplined containment of federal program spending over the past five years at 3.6 per cent annually, less than the rate of inflation. By comparison, the provincial average over that same period has been almost twice as high at 6.4 per cent with some provinces, notably Ontario, increasing their spending at rates well over 9 per cent.
Simply put, the federal example of program spending restraint is the best in the nation and has been posed in this budget as an essential challenge for the provinces to emulate. Far from promoting increased taxes, this budget sets a model for financial discipline. The federal example of 3.7 per cent restrained growth in program spending over the next two years clearly demonstrates to the provinces that more can be done to limit expenditures.
In the same context, the premature conclusions by opposition representatives that a two-year freeze on EPF transfers will directly result in cuts to education and health are invalid. As they well realize, or should know, EPF funds are no longer restricted and the provinces have been using this money in a variety of ways for several years. In effect, EPF is now virtually block funding and does not hobble the financial flexibility of any province to select its own spending priorities. There is simply no valid reason why education or health should become special targets as a result of this budget.
Tb the contrary in fact, the granting councils, the National Sciences and Engineering Research Council, the Social Sciences and Humanities Research Council and the Medical Research Council, which provide research support to universities, have been specifically relieved from the 5 per cent CAP applied to other areas of science and technology in this budget.
It is very significant that these granting councils have been specifically relieved of the 5 per cent limitation applied to all other areas of science and technology and that should be recognized by those in the fields of education and health as a very significant and appropriate measure in the budget.
The provinces will bear close to one-third of the $3 billion expenditure savings contained in this budget, which is a moderate share in a major national mission toward financial responsibility, particularly considering the fact that funding to the provinces over the past five years has consistently consumed 23 per cent of all federal program spending in cash terms.
As federal debt has risen to support these and other major costs, the federal budget for debt service has grown to 35.1 cents of every revenue dollar. By comparison, the average provincial debt is serviced by only one-third of that amount or 11.8 cents of every revenue dollar. Even in Atlantic Canada provincial debt service is less than 15 per cent of revenues. So again, simply put, the provinces rightly share the benefits of the federal

purse and they must also rightly share the burden of the debt against it.
For my own province of New Brunswick, it is worth noting some of the key implications of this 1990 federal budget. Total federal transfers will increase to New Brunswick by almost 4.5 per cent in 1990 and will total well over $1.5 billion, more than 40 per cent of the total provincial budget. No direct cuts have been made, except that per capita EPF grants are frozen for the next two years at current levels. This represents less than 1 per cent of New Brunswick budget revenues and is a restraint on future expectations and not on present funding.
Federal transfers will average approximately $2,100 per citizen in New Brunswick during the coming year, the third highest in the nation after Newfoundland and P.E.I. Major federal projects in the province remain uninterrupted, notably the frigate construction program in Saint John and the combat training centre at CFB Gagetown. By contrast some multibillion dollar projects were totally cancelled in other parts of Canada. As announced late last week, the ACOA program, which is so vital to Atlantic Canada, has not been reduced and, in fact, additional new areas of activity such as marketing will be supported and funding limits have been extended to provide for larger projects.
On balance, therefore, and particularly by comparison with larger more affluent provinces, this budget recognizes the special economic circumstances of New Brunswick and the entire Atlantic region.
As most Canadians understand, our country has been living beyond its means for a long, long time. That is what deficit financing means, spending more each year than we are prepared to pay for or can afford. To the credit of this government, in 1984 it recognized the dread disease of deficit and debt in Canada and embarked upon an agenda for economic renewal as a long-term course toward cure and recovery from our nation's financial illness. The facts of their success are revealing, particularly in operating budget terms when you separate debt service from operating revenues.
Mr. Speaker, I am coming quickly to a close. In 1984 we were not even remotely covering program expenditures and we had an operating deficit of $16 billion as
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part of the total deficit of $38 billion. In the current year now ending, only five years later, we shall have an operating surplus of $9 billion, unfortunately still as part of a continuing total deficit of $30.5 billion.
The striking reality is that we have achieved major progress in bringing program spending under control. In that five-year period an operating deficit of $16 billion has been turned to a surplus of $9 billion, a net gain of $25 billion.
Time obviously does not permit me to address the many other important issues and detailed Estimates contained in this budget. I have described the features which I believe bear special mention.
Over-all, this budget is another major move in a consistent direction toward financial integrity for Canada and it is one which I endorse and support fully.


James Capsey (Jim) Karpoff: Mr. Speaker, I have listened with great intensity to the member's speech. I want to ask him two basic questions. One deals with the issue of confidence that the Canadian public has in the Minister of Finance.
Last year when the minister presented his budget, he said that the interest rate would be 10.5 per cent at this time. It is now closer to 13.5 per cent; an error of 30 per cent. Three years ago the Minister of Finance said that by this current year the deficit would be reduced to about $14 billion. It is closer to $30 billion; an error of 100 per cent. Now the Minister of Finance is giving nice rosy projections as to what is going to happen in 1994 and 1995. Why should the Canadian public believe him when his previous predictions turned out to be totally unreliable? Second, the government keeps saying that there is a need to reduce the deficit, to cut spending. I want to ask the member how, in light of the need for reduced spending, government members can support the bill as they did last week? How can they bring in a mass tax concession in terms of increased RRSP contributions for the wealthy, increasing it by another $400 million for those earning between $50,000 and $86,000, bringing the total tax concessions on RRSP contributions to people earning in excess of $50,000-which is the the same as losing taxes-to $11 billion this year? If there is such a

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shortage of money, why did the government proceed to give more tax concessions to its wealthy friends?
I want those two questions addressed. What confidence does the public have in the Minister of Finance? His predictions in the past have been totally erroneous. Why, if there is a need to reduce the deficit, is the government still giving away tax concessions to its wealthy friends?


John Williston (Bud) Bird: Mr. Speaker, the public of Canada does have extreme confidence in the Minister of Finance, and well they should have. The Minister of Finance last year predicted that the deficit in 1989-90 would be $30.5 billion. He has been faced since that time with a number of extraordinary circumstances, such as increasing inflation and increasing interest rates. Yet, he is coming in right on the money at $30.5 billion. His predictions over the history of his tenure have been exceedingly accurate on balance. I believe there is good cause, particularly given the improvements in the operating surplus position as I have described in my remarks, to believe that we will see the deficit predictions that he has made met on the money-$26.8 billion in 1991, $21 billion in 1992, $14 billion in 1993 and $10 billion in 1994.
Just imagine, in 1994 the deficit will be cut by two-thirds from present levels and the government will be in a position to start redeeming its bonds and paying down its debt for the first time in a quarter century. The people of Canada will have immense confidence in this finance minister for decades after that.


Fred J. Mifflin: Mr. Speaker, the member for Fredericton-York-Sun-bury said something that has me somewhat puzzled. In fairness to him, the subject is education. His government, on the one hand, has instructed the Canada Manpower Centres to put emphasis on training in a province like Newfoundland where those who complete the training have no jobs to go to. That is not a euphemism. That is not a catch phrase. It is not a partisan phrase. It is a fact of life. They do their training, they go to the community colleges and take computer training to do all kinds of things and then they turn around and there are no jobs for them to go to. The emphasis on training might be good for Tbronto and
other parts of Canada but it is certainly not good for my constituency in Newfoundland and, I would suggest to the hon. member, maybe for parts of his area.
The other half of this coin is that this training that the Manpower Centres insist on precludes the smaller communities from employing its people on the small infrastructure development projects that certainly were in vogue when I first became a member of Parliament. That employment, in some cases, is the only means of qualifying for UIC. They are the only jobs that they can get, so you get community infrastructure and you get jobs. But that is all gone now because they have to go off and do training and in some cases the people cannot qualify. Communities end up with no infrastructure. So right now there is no aid package for the economic crisis and no jobs for job development programs.
On the other hand, this government says that it is bent on training, but the Minister of Finance, in his budget, has put together what is considered to be, by most people in the business, a loss to the post-secondary education of $9 billion by 1995. I cannot understand this dichotomy. Where are we heading? Are we for training and education or are we not?


John Williston (Bud) Bird: Mr. Speaker, as someone once said, if you think education is worthless, try ignorance. The facts are that Newfoundlanders are not ignorant and Newfoundlanders recognize, I am sure, as even the hon. member recognizes behind his rhetoric, that training, innovation and creativity do constitute the solution to some of the structural economic and unemployment circumstances in which we find ourselves, such as the fishery.
If the resource is gone, depleted through a variety of causes, we cannot simply reside there in blissful dependence forever on any government. I do not believe Newfoundlanders want that. I believe Newfoundlanders do want training, they do want to be educated and pointed in new directions. That is what is going to happen.


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


Hon. Pierre Blais (Minister of Consumer and Corporate Affairs and Minister of State (Agriculture)):: Mr. Speaker, I would like first of all to thank the hon. member for Regina-Lumsden who, as a long-time

experienced member of this House, has agreed to allow me to speak before him.
Mr Benjamin: It will cost you.


Pierre Blais: I know I am going to pay for this, but he will have the tremendous experience of listening to my speech.


Mr. Benjamin:: You should stay for mine. [Translation]


Pierre Blais: Mr. Speaker, it is a great pleasure for me to participate for the first time as Minister of Consumer and Corporate Affairs in the budget debate. Needless to say, it is with much enthusiasm and confidence in the future that I approach this new mandate which the Right Hon. Prime Minister has given to me. I would like to tell you, Mr. Speaker, and this House that I will fulfil my new responsibilities to the best of my knowledge and with a great deal of energy. I will also continue to discharge the important responsibilities of my position as Minister of State for Agriculture with the same interest and dedication.
The Budget tabled in this House on February 20 by the Hon. Minister of Finance, Mr. Speaker, is quite in keeping with the policy of fiscal responsibility that our government has pursued for the past five years. This Budget brings us closer to our objective of reducing the deficit by 1994 while taking account-and I think this is important-of the immediate needs of people of modest means. This is a big challenge, a difficult challenge, but I believe that we now have all the tools in hand to meet it.
When we came to power in 1984, the economy and public finances were in disastrous shape. I do not need to remind this House of what the size of the deficit, the unemployment rate and inflation were then then, and also the interest rates that had ruined many of our businesses.
Correcting this situation, Mr. Speaker, required more than cosmetic measures and improvised policies. It took a long-term policy, a real action program to put Canada back on the road to economic prosperity. That is what we proposed then. The Minister of Finance, the same one as today, offered Canadians a comprehensive, articulate, multi-year plan that would enable Canadians to prepare the future.
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This plan, Mr. Speaker, was based on two main thrusts, two priority areas for action: first, restoring the public finances and second, creating a favourable climate for measures to stimulate economic growth.
We therefore took strong measures to reduce the deficit which then was approaching $40 billion, as you will recall. We first attacked public expenditures, especially program spending which at that time was more than government revenues and was growing at a frightening rate of 14 per cent a year. At the time, people would say that the government was borrowing to pay for the groceries.
Over the next five years, this growth rate in program spending was brought down to 3.6 per cent. That was real belt-tightening. It would have been difficult, really difficult, Mr. Speaker, to be credible when we asked Canadians to tighten their belts if the government for its part took the attitude that it could continue to spend more than its income by increasing its spending inconsiderately. We therefore began by tightening our own belt as a government.
We also reduced the size of the Public Service by 12,000 person-years. We have in fact returned to the 1973 level; the size of the Public Service is what it was 17 years ago, with the result that today government spending is less in dollar terms than it was five years ago.
Mr. Speaker, we also transferred to the private sector Crown corporations that no longer met the objectives for which they had been created and that also were running deficits. Today, not only are these companies no longer a burden for the government but they have become prosperous enterprises contributing to Canada's economic growth. It was a step we had to take. We took it and we will continue to do so over the years, Mr. Speaker.
If we had not introduced these measures, the government's Budget would be $22 billion more than it is today. However, to turn around the economy, we not only had to put our financial house in order, we also had to adopt measures that would allow the private sector to develop its potential for growth.
That is why we adopted a policy to deregulate major economic sectors such as energy and transportation, to name but a few.

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We replaced the Foreign Investment Review Agency, which does not arouse fond memories, with Investment Canada.
Our initiatives have produced results, Mr. Speaker. The economy has expanded for seven consecutive years. Our job creation rate has been the highest of all industrialized countries except Japan. The purchasing power and after-tax disposable income of Canadians increased dramatically. These are facts and figures that speak for themselves.
However, we also had to open up new opportunities for our economy, at a time when world trade is becoming global and increasingly powerful trading blocks are being formed. That is why we negotiated a free trade agreement with the U.S., which gives our products and services secure access to the richest market in the world and which will lead-the figures from independent agencies are there to prove it-to a sustained 3.5 per cent increase in our economic output. A lot of money, a lot of investment and a lot of jobs are reflected in this figure, Mr. Speaker.
I realize that many of our friends across the way will continue to drape themselves in the Maple Leaf, in order to oppose free trade. They don't know or pretend they don't know that in the past year, prospective investment has increased by more than 11 per cent, that business has been urging us to speed up elimination of tariffs and that Canadian companies are eager participants in our programs to promote sales in the United States. These are unmistakable signs, Mr. Speaker.
Obviously, when you have run the country on a hand-to-mouth basis for 15 years, it is not always easy to understand what is involved in long-term management of public finances which keeps the future in perspective. That is what we are doing. We are giving our companies and our workers the best possible tools to get ahead in a world that is becoming increasingly competitive and where no one is going to give it all to us on a silver platter.
The tax reform that will come into force next year is also a case in point. The new goods and services tax will rid us of a tax system that is obsolete, unfair and extremely harmful to the Canadian economy. It will give us a modem tax system, one that already exists in 48
countries across the globe. It is a system that, whatever people say to the contrary, will help low- and middle-income Canadians improve their lot.
The goods and services tax will help achieve three goals: reduce the deficit, stimulate the economy and make our tax system more equitable.
Mr. Speaker, we are well aware that certain measures are not very popular at first. This is to be expected when aiming for long-term benefits, and in any case, we are certainly not trying to win a popularity contest. That is not why we were elected, Mr. Speaker. We were elected to govern with a long-term perspective, in the best interests of Canadians.
The future demands that we act responsibly. First of all, we cannot afford to leave to future generations, to our children and grand-children, the debts that we ourselves incurred. We must ensure that Canadians will continue to have one of the most advanced health care systems in the world, social programs that are among the most generous of any country, and a modem education system. We must also be able to respond to the new challenges of the future, such as protecting the environment.
If we are to be successful, Mr. Speaker, we cannot wear blinkers. We must have a vision of the future and the courage to defend that vision, even at the risk of becoming unpopular.
Reducing the deficit and the national debt is not the end-all and be-all, but it is the only way to provide for a prosperous economy and a better future for Canadians. It is the only way to have the flexibility we need to make real choices. We cannot make real choices when one-third of every dollar collected by the government goes to pay off the debt. If we let this percentage increase, we may compromise our future by reducing that flexibility, thus becoming increasingly vulnerable and, in the long run, unable to maintain those programs to which I was referring and which are so much a part of our lives.
The Budget brought down by the Minister of Finance keeps us on the track of budgetary responsibility. The government will continue its expenditure control plan. We will save $7 billion over the next two years and nearly $20 billion over the next five.
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We have asked Canadians to make many sacrifices in recent years. There is no easy way to reduce the deficit. We have done everything we could to keep the impact on Canadians to a minimum. We announced no new taxes in this Budget. Exempted from the expenditure control plan are all income security programs and most transfers to the provinces, especially the poorest provinces receiving these transfers.
Few programs have been eliminated or reduced. We preferred to cap growth of government spending in most areas, as a signal to the public and to the provinces which must realize that inflation, which has not yet been beaten, is no accident. It is not just a figure that appears once a year or once a month and tells us we have an inflation rate of 5 per cent, 4 per cent or 6 per cent. No, this figure happens to be the sum total of various factors produced by the provinces, the private sector, unions, government-the federal, provincial and municipal governments-when they fail to take the necessary steps to keep their spending below the rate of inflation. That is the only way we will be able to reduce and control inflation.
The government will also continue to introduce new measures to make its activities more efficient and less costly. Thus, increases in departmental operating and maintenance budgets will continue to be capped at 2 per cent until 1994-95. A meager 2 per cent, as has been the case since 1986-87.
Mr. Speaker, our message to Canadians is clear. Leadership in reducing the deficit has come, first of all, from the government, as all the figures have shown. In the years to come, we will continue to tighten our belts, as we have been doing for five years. We will be able to say, with pride-the government can often be accused of saying: Do as I say and not as I do. That is not the case, Mr. Speaker. We have set an example.
Before concluding, I would like to say a word about how my department, Consumer and Corporate Affairs Canada, intends to fulfil its mandate for fiscal responsibility.
My department is one of those which have done the most in recent years to increase productivity in the federal Public Service. My department has met all the expenditure reduction objectives set by Treasury Board. Thanks to office automation, rationalization and privat-
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ization, staff cuts of up to 30 or 35 per cent have been achieved in some services and our cost recovery policy has increased revenues by about 92 per cent since 1984. We realized that Canadian companies and Canadians could pay for some services from my department. They pay and it is normal and legitimate.
As you know, Mr. Speaker, my department's mandate is to ensure that the market operates efficiently and fairly. In that regard, we have a particular responsibility to help companies be more competitive. Therefore my department will have an important role to play in the coming years in building a strong economy which will enable our companies to stand out and benefit from the development opportunities that free trade and tax reform in particular provide us.
At the same time, Mr. Speaker, consumers for whom I am also responsible will ultimately benefit from a more competitive, more productive economy. Consumers will benefit from it in the end. It is important for Canadians because at some point all of us without exception are consumers in this country. I think that what we are doing for consumers' benefit is important.
In conclusion, Mr. Speaker, I want to say a few words about the Department of Agriculture which has also done more than its fair share. Its budget for the next fiscal year has just been reduced by more than $400 million. The end of the assistance program for crop losses due to the 1988 drought and the cancellation of the policy to set the domestic price of wheat, to mention only these two, will enable us to make substantial savings.
The budget under consideration is in keeping with our fiscal responsibility commitment. We can no longer afford to come up with the kind of budgets like those where our Liberal friends would forecast a deficit of $2 billion or $3 billion and end up with $17 billion in the red. At the same time, Mr. Speaker, they would not even look twice at the expenditures and increase them by 14 or 15 per cent in all departments. This explains why we are now in such a tight fiscal situation and must tighten our belts even more to get our economy back on track. I am sure the budget of the Minister of Finance will help us achieve our objective. Canadians are in for a long and difficult period, but as members of the House it is our responsibility to make them understand that if we want to keep our country free and independent, and if Canadians want to remain proud of the social programs

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we have set up over the years, this can only be done with a budget like this one, Mr. Speaker.


Ron J. Duhamel: Mr. Speaker, I appreciate my Hon. colleague's comments. I should like, however, to develop further the notion of a "vision of the future" which he raised.
Quite recently, a friend of mine mentioned that the budget of an individual, an organization, a government or a private enterprise greatly reflects the priorities of this individual or group. In a sense, it is an image of his or its soul, because the way I spend my money is indicate of the values I hold dear.
Now, when I consider this budget, I note that the Government increased by as much as 5 per cent the funding of a number of departments, including National Defence. I think it increased the funding for Intelligent Service by as much as 20 per cent. Other fundings were either limited or frozen. For instance, this budget comes down veiy hard on the old, the sick, the veterans, the young, the natives, Canadian women, and a number of regions: their funding were either frozen or allowed a limited increase. I am referring of course to the health care and education programs.
Moreover, taxes will increase, and I just wonder how the Minister can claim with such fanfare that there will be no new tax, when the Govemement has announced that the GST will be implemented in January 1991, unless of course it plans to withdraw it, which would be very good news for Canadian men and women.
My question to the Minister is this: If you followed my argument don't you think that serious self-examination is in order for the Government when it claims that its priorities are really what Canadian men and women need?


Pierre Blais: Mr. Speaker, the hon. member has just given us an example of a syndrome that is also found among some members of the Canadian public, and I am referring to the "not-in-my-backyard" syndrome. It is true that a budget must reflect priorities. Our priorities are reflected in the fact that we are capping spending increases in areas that are not particularly sensitive or vitally important, and we have protected all components of our social programs from these cutbacks. I would say
the hon. member is again showing the kind of attitude I fail to understand. He says that the CSIS budget, and in fact I was responsible for CSIS until last week, was increased by 20 per cent. What the hon. member tends to forget is that the Department of Employment and Immigration is being criticized for not being quick enough in processing refugee cases. To process these cases, however we have to hire people to process security files-


Ron J. Duhamel: Twenty per cent more?


Pierre Blais: Yes. We have to hire people for the Canadian Security Intelligence Service, we have to hire people to deal with this backlog of 100,000. Nearly half of question period was on this issue alone. At the same time, people object and question why the increase in the budget of the Department of National Defence is limited, but when we cut 14 military bases across the country, they are the first to come and ask the government not to cut military bases in Canada, not to cut this item or that. It is always the same story. We all want cuts but not in areas where we are affected, never in our priority areas. That is why the government, Mr. Speaker, has shouldered its responsibilities and faced this reaction which is to some extent legitimate from people who say, "Well, I don't want you to cut in my area." We have to make drastic decisions, cut everywhere, as is normal, exempting some areas such as social spending and spending in the most disadvantaged provinces.
I think that answer is quite appropriate and reflects the government's priorities, Mr. Speaker, because a budget, as you said, reflects a government's priorities. You will find them there, because we are not imposing any new taxes. The GST which was announced previously will be fairer for Canadians, which you refuse to admit. You simply say that this tax is not right for Canadians. But you forget to say how it could be replaced. You forget to talk about the present tax which is applied to manufactured products-


The Acting Speaker (Mr. Paproski):: I regret to interrupt the hon. member, but the period for questions and comments has now expired. Debate. The hon. member for Regina-Lumsden.


Leslie Gordon Benjamin: Mr. Speaker, I wish to draw to your attention-and you may wish to make a mark on the wall-that for the first time in 21 and a half years, I am not going to say anything about transportation today. As much as I would love to let you hear my Crow rate speech again, I will not do it.
I am sony my colleague cannot stay to hear my speech, because it is going to be magnificent.


Pierre Blais: I am going to read it in Hansard.


Leslie Gordon Benjamin: I want to touch briefly on interest rates, the deficit and the debt, plus an area that I am responsible for as critic for my party, namely, veterans affairs. I apologize for not notifying the minister that I would be here to do that today. I hope he is watching in his office.
I recall in 1981-1982 when interest rates got even a little higher than they are now-


Mr. Redway:: Quite a bit higher.


Leslie Gordon Benjamin: -hearing the members of the Official Opposition, including the present Minister of Finance, berate the then Liberal government daily about the folly and the fallacy of a high interest rate policy; the folly and the fallacy of trying to prop up the Canadian dollar.
Every time somebody wants to know what our dollar is worth compared to the U.S. dollar, it is like the old Vaudeville joke, when one lady asked the other one: "How is your husband?" the other lady said: "Compared to what?"
We have been through this before historically. The government could accomplish its same deficit reduction as proposed in the budget by dropping interest rates. Using the Minister of Finance's own projections, every 1 per cent drop cuts the deficit by $1.7 billion in year one, $2.6 in year two, $3.1 billion in year 3, and $3.5 billion in year 4. The normal spread between interest rates in the United States and Canada is around a 3.0 to 3.5 per cent rate difference. But we are running at 5 and 5.5 per cent difference now.
I do not understand this nonsense. I am just an innocent stubble-jumping prairie boy. The minister complains that he is fighting inflation, but he has raised interest rates over the past year to the point now where the Bank of Canada rate is over 13 per cent, and the rates are anywhere from 14.25 to 15 per cent on
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consumer loans or mortgage loans depending on who you go to. Since he was the one who complained vociferously when the Liberals did this, why didn't the minister arrange with the Governor of the Bank of Canada to lower interest rates by 1 per cent immediately and over the next year another 1 per cent? With that mechanism alone, he would have wiped out the deficit in four years. If it meant bringing in foreign exchange controls or pegging the dollar, fine, let's do it.
On that note, I want to say for the benefit of my hon. friend, that we did that for six years during the Second World War. We financed that entire war without any foreign investment, without any foreign capital. Canadians did it by themselves.


Alan Redway: There is only one difference, there is not a war.


Leslie Gordon Benjamin: Why don't we have a declaration of peace and use the same methods now as we used then? It takes courage and it takes flying in the face of the old line party conventional wisdom.
If the deficit and the debt at the end of the Second World War in early 1946 were translated into 1990 dollars, it would be half again higher than our present national debt and our deficit. Thank goodness, because we had to rebuild our entire economy, we had full employment and we wiped out those debts. By 1956-57 they were paid off. My victory bonds and Canada war savings certificates were redeemed, and the same with all other Canadians.
During the Korean War, Lester Pearson pegged interest rates and imposed foreign exchange controls. In 1959-60, John Diefenbaker did exactly the same thing. The Americans did not like it, but tough cookie. We kept inflation down and we kept a relatively high employment rate. If you really want to wipe out the national debt and bring the deficit down to zero, and if we are lucky show a surplus, you have to follow a policy of full employment. I will leave it at that.
As a veteran and one who was most honoured when asked by my previous leader and the present one to be the critic for veterans affairs, I never thought I would live to see the day that a government of any kind would attack veterans. I have been here as you have, Sir, since June, 1968. Every member of Parliament in every year since then, every political party that had representation in this House agreed, and there was never any question about it, that we will never be able to fully repay them. It

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was sacrosanct. It was not as much as we could do or should do, but it was the minimum we must do.
Now we have the obscenity of this mealy-mouthed, chiselling of our war veterans. I do not understand it.
The government in the past two months has spent $3 billion of our money to do what? To prop up the Canadian dollar. Why in God's name would it want to prop it up? Every time it keeps the Canadian dollar high, it hurts our grain sales, grain exports, livestock exports, forestry products, fisheries, potash and sulphur; you name it. That is what has got us into difficulty.
Our trade surplus is the lowest it has been for God knows how long. But imagine. The government spent $3 billion of our money to prop up the Canadian dollar. Frankly, if it is at 83 or 84 cents right now, I would say put it down to about 75 cents compared to the American dollar. That would be a neat way to compete with the Americans on their export enhancement program on agricultural products and how they have been doing us out of markets on grain sales because all those international contracts are in U.S. dollars. Then we would show them where the bear sat on the buckbrush.
The fact is that one of the items to reduce the deficit picks on veterans. I did not even think a hard-hearted Tory like my hon. friend across the way would stoop that low. I just did not believe any of them would do that.
The Department of Veterans Affairs will raise rates for board and lodging for veterans in department controlled beds in long-term care and the heavy housekeeping component of the veterans' independence program will be cancelled. If this country and this government are that hard up and that desperate that they have to pick on our veterans, there is something wrong with our priorities, particularly the priorities of the government.
There is a means test on whether or not veterans will pay board and lodging in a government operated veterans home or a home operated by a provincial institution or a private institution. If a veteran who receives $820 a month of $9,840 a year, is paying no board and lodging, as
long as he is not a victim of war wounds he will have it go from zero to $240 this year. Next year it will go to $420.
Do you realize, Sir, that that incomes test is $2,000 a year below the poverty line? As a minimum criterion the incomes test should be no less than the poverty line and it should go up each year according to inflation.
Under the incomes test a married veteran will get $1,234 a year which he is allowed. That comes to $15,808. The poverty level for a married couple in Canada is $19,250. The income test for the married veteran who requires long-term care is $4,000 a year below the poverty line.
There have been remarks made both inside the Chamber and outside the Chamber. I want to express my extreme sadness. One noted and honourable spokesman for a veterans organization in Canada said the other night on television that some of these guys even leave a an estate when they die.
Is that not terrible? Is it not terrible that they were able to put away a few dollars to leave something for their children and the grandchildren? What the devil is wrong with that? We encourage every other Canadian to do it. We give them tax breaks to do it, but we do not do it for veterans. My goodness, if they are going to leave an estate, that is not terrible. They should be allowed to leave that.
The married veteran in long-term care is allowed $1,057 a month if his spouse is at home. There is a comfort allowance for him and his spouse of $128 a month. This is under the old Tory incomes test. Next year the pensions will be indexed upward by 5 per cent, but the board and lodging rates rise as well. Why bother with the increase in either one? The married veterans will still be allowed their $1,057 a month and their comfort allowance, if you can call that comfort, will remain at $128.
What cuts are involved? This year the board and lodging rates go from zero to $240 for about 1,300 veterans and lesser amounts for a larger number. Next year they go to $420 a month based on the rate of the lowest province in Canada which at the moment happens to be Alberta. It is a way for a province to be encouraged to pick up some extra money and raise its rates, which
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will immediately raise the board and lodging rates veterans have to pay. There is no maximum. That $240 and $420 are not maximums.
The government deleted the heavy house cleaning allowance. It was twice a year. Even if they cut it down to once it would be all right. All of us can remember when our mothers house cleaned in the spring and fall.
The whole family had to pitch in and work. My dad washed the ceilings. The kids had to clean up the basement and wash walls. We all had to do it. But how is a 70 year old or 80 year old veteran who wants to stay out of long-term home care supposed to do that heavy house cleaning? The government kept the light house cleaning. He or his spouse could do some of that, or perhaps both, or get the kids in to help. When it comes to washing walls and ceilings, I do not want to see an 80 year old veteran trying to get up a ladder to wash a ceiling.
Then there is cleaning the drapes. Have you ever sent drapes to a diy cleaner? Dry cleaning is eliminated too. If you do your drapes once a year you know what the bill is like. Also cleaning attics, basements, garages and/or outbuildings. By the way, would you believe there are still places in Canada where they have certain kinds of outbuildings; some are one holers and some are two holers. Any home improvements, including stripping and sanding of floors, replacing and laying new carpet and chimney cleaning. Do you want to see a veteran in his seventies trying to clean his own chimney?
Good God, what are they doing? What do they think they are doing? Better still, why do they not think about what they are doing?
All parties and every member of this House since 1945 have said and agreed that we could never fully repay them. How come this government and this Parliament are going quietly-a lot of other members and I are not going to be quiet-to acquiesce to this kind of cheap chiselling on people whom we have agreed for five decades we can never fully repay? What in God's name is the government doing?
I have a document that was sent to the Regional Director General of Operations of the Pacific in Vancouver. I do not blame civil servants; they have their orders to implement government policy. When veterans have called and said "well, how come you did not tell us
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before", they have said it was because they did not know it was in the budget. There was no advance warning.
I want to conclude by referring to the increases. Yesterday the minister tried to say there were no cuts. I sent my cat to the vet the other day and we got him cut. I can tell my neighbours that that cat ain't cut. No matter which way you cut it, the veterans have an increase in their board and lodging and they have a decrease in the veterans independence program. If that ain't a cut, I never saw a cut cat in my life.
This country has no business chiselling in this area. In hundreds of other places people are making over $86,000 a year and get all the benefit of the new breaks in the RRSPs. I guess them that has gets.
I want to say that we are going to make sure that every veteran in every branch of the Legion and Army, Navy and Air Force veterans all over this country knows about this. They do not have the details. We are going to give it to them, and then they can give it to this government. I hope if the government does nothing else about this stupid budget, it will at least withdraw the provisions regarding the veterans of Canada.


James Capsey (Jim) Karpoff: Mr. Speaker, I want to go back to a number of things my colleague spoke about. I must say that I hope his passionate plea on behalf of veterans does not go unnoticed across Canada. I think it was eloquent and certainly put forward very clearly what is being done to the veterans and the fact that this country owes them so much.
I want to go back and talk about a couple of other things he mentioned: the question of interest rates, inflation and the dollar. The government keeps saying it has to jack up the interest rate to bring down inflation.
Somehow I got mixed up. I thought really half the problem of pushing up inflation is high interest rates. I will use one example. In housing right now interest rates are at 13.5 per cent instead of the 10 per cent that the Minister of Finance promised a year ago. This means that on a $100,000 mortgage monthly payments are $250 more. That is inflation, $250 more. The person has to earn nearly $500 to have $250 in his pocket. He has got to demand $500 more in wages. That is inflation.
My feeling is that inflation is being caused by the high interest rate policy. The government can continue to jack it up to 20 per cent, but it is not going to bring down

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The Budget
inflation. In fact, it is just going to continue to push it up. I would like the members comments on that.


Leslie Gordon Benjamin: Mr. Speaker, my hon. colleague is as usual 100 per cent correct. He is just repeating what the present Minister of Finance said to the Liberal Minister of Finance in 1981 or 1982 about high interest rates. That government of those years and this government are the architects of their own problem. The more you raise interest rates, the more you increase the deficit.
When the Minister of Finance cries about how much of the government's expenditures have to go to pay interest charges, you would think he would phone Mr. Crow and say: "We have to do something about this". Oh, no, Mr. Crow increases the interest rates and then the Minister of Finance comes in here and says: "We have a problem. We have to cut back on veterans and a whole bunch of other outfits". All he had to do was cut back interest rates. Over the next four years, by just knocking it off 1 per cent this year and another 1 per cent next year, the accumulated reduction of the deficit will hit $10 billion. What more could you want?
If foreign investors want to take their money out tell them: "Fine. Get out. Go. We will do it ourselves." We did it for six years financing a war effort, the likes of which many other countries were never able to accomplish in proportion. That is one of the key items. The government allows interest rates to go up increasing its own deficit, and then it expects us, after paying higher interest rates, to take the cut-backs that it proposes also.


Margaret Anne Mitchell: Mr. Speaker, I would like to ask my hon. colleague a question that is not perhaps directly related to the budget but certainly is related to his deep interest in veterans affairs.
As a Korean veteran myself, I also would like to say that I notice most members in the House tend to refer to veterans as he and perhaps this is something where we should be a little more correct, too. I am sure there may be many service women who are interested in the points that he was raising.
As he was talking this afternoon, I was looking through some correspondence and happened to come across something from one of the senior members of the Korean Veterans Association. It is still very concerned that Korean veterans have not been properly recognized
by the Government of Canada. I wonder if he would care to comment on that. I would be interested in any suggestions that he has.


Leslie Gordon Benjamin: Mr. Speaker, I take the admonition of my hon. colleague.


Margaret Anne Mitchell: A friendly admonition.


Leslie Gordon Benjamin: A friendly admonition. She has given them to me almost weekly. I never meant anything by being forgetful and not mentioning that there were thousands of women who served loyally in the Second World War and the Korean War, between those wars and since.
It is true the veterans of the Korean War are still being short changed. There are a few others. I have tried for years to get the Government of Canada, since 1968, to recognize the veterans of the Mackenzie-Papineau Battalion of the Spanish Civil War. There is less than 200 of them left. They are all in their eighties. One of them, a good friend of mine in Regina, passed away a couple of months ago. He tried to get recognition for years.
Every response I got about them from every Minister of Veterans Affairs was: "Well they were soldiers of fortune." They did not get paid. They paid their own way over there. They were the first ones to fight the fascists. Most of them volunteered for the Canadian forces when the Second World War started, and we still do not recognize their contributions from 1936 to 1939.
Another group we still do not recognize is the merchant marine. We lost more merchant marine men than we did from the Royal Canadian Navy in the Battle of the Atlantic. I have had excuses from Ministers of Veterans Affairs ad nauseam that they were getting commercial pay. When we checked into that, their commercial pay was the same or less than what members of the Royal Canadian Navy were getting. The government still refuses to recognize them.
I say through you, Mr. Speaker, to my colleagues in the House on all sides it is about time again-and we have done it before in other instances-that we made up as well as we can for these errors of omission and commission. Let's once and for all recognize those merchant seamen, the veterans of the Spanish Civil War, and do
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more for the veterans of the Korean War who are now almost to an age like me.


Miss Deborah Grey (Beaver River):: Mr. Speaker, the Minister of Finance said in his recent budget: "to ensure a strong economic foundation for the future we are moving forward with the broad plan that we set out in November 1984". Unfortunately, Canadians are skeptical of the ability of the government to put its own financial house in order.
On the positive side, and we are pleased to announce on the positive side, that we in the Reform Party are glad to see that Petro-Canada is finally going to be privatized, but we also wonder why it has taken six years. Business should be involved in business, and government should be involved in government. While we are pleased to see Petro-Canada being sold, we wonder why the government is going to continue to burden this operation with the bureaucratic laws of a Crown corporation and not allow it to function like any private sector company should.
We are glad to see industrial and business subsidies being cut; we advocated this last year. Of course the Chamber of Commerce and business communities in Canada were asking for the same thing. However, we do wonder why the energy sector has been singled out.
We were also glad to hear the government borrow a line from our neighbours to the south and say: "Read my lips, no new taxes", to sell this budget. However, given this budget's substance, I believe this statement either to be irresponsible at very best, or insincere at the worse.
I note that unemployment insurance premiums will be up by 18 per cent over last year, supposedly without increasing taxes. Nor can we forget that not only did the government announce in December new surtaxes, it also has brought in Bill C-62, the new GST, which is waiting to become law before the next budget.
On the negative side, Mr. Speaker, I must tell you that the budget's bottom line is what I expected from the government. I expected a deficit around last year's projection of $28 billion, although it is still $500 million higher than even that. This budget makes the assump-
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tion that last year's course was correct. I contend it was not and still is not.
I certainly was amazed that defence was not reduced because of the events in eastern Europe. Bases in my riding were bracing themselves for cuts in light of what has been going on around the world. I certainly expected foreign aid to be reduced. There were no cuts there. Cuts in projected spending are not cuts in actual spending. It is ludicrous to suggest that a 5 per cent cut on growth is a spending cut. It simply is not.
After much talk about reductions and spending cuts, program spending will in fact increase by $3.1 billion after an increase of $5.5 billion last year. Of 29 departments, 22 had their budgets actually increased. Only 7 were reduced. If we look at what occurred in these 7 departments, we will see that the Secretary of State actually increased after the non-recurring payments to Japanese Canadians are removed. Agriculture fell, but as a result of last year's budget. Actually there are only 5 of the departments which show cuts and only 2 of those 5 will show substantial cuts.
We are disappointed that the evidence is that cries over cuts are merely a reallocation of funds within and between programs to make this seem like a tough budget. We see that the budget of the Office of the Co-ordinator of the Status of Women increased by 11 per cent, the Governor General's office increased by 13 per cent, the Senate is up by 8 per cent and general operations of the government are up by 15.8 per cent.
Again it is disappointing that in this budget there are no cuts to the cabinet, to ministerial office staffs, no cuts to limousines, no slashing of parliamentary travel budgets or MPs' perks and no cuts in middle management. Again we see in this budget, sadly, no example of restraint at the top levels.
I do say again, because I do remember that in December the President of the Treasury Board announced symbolic cuts, then they decided over a weekend not to save taxpayers' money or interest payments or to reduce the deficit, but rather to sell an unpopular tax that is to come in at 7 per cent because they knew it certainly could not sell at 9 per cent.
That is one of the problems with the government's attitude toward deficit reduction. It is a reaction to some outside force, not the result of an internal conviction. Over a weekend, they miraculously found $2 billion worth of cuts to sell the GST at 7 per cent. How many years had it cost us, the taxpayers, these $2 billion? How

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much has it added to our debt? How much has it added to the interest payments this year alone? How much more is there to cut which they do not feel compelled to cut?
I will give you a fact, Mr. Speaker. For every $1 which this government could have cut in 1984 when it was voted in to do just that and continues to spend that $1 in 1990, the government has accumulated $8.58-$6 in principle and $2.58 in interest. It will add 85 cents in interest to this year's deficit, and these are all very conservative estimates.
If it did not cut that $1 again this year, it will cost Canadians at least $1 in interest next year and will have added $10 to the debt-10 times the original amount of that $1 in 1984.
This budget may not in itself include any new taxes, but it paves the way for future tax increases. This budget fails to tackle the seriousness of our deficit by eliminating non-essential spending now and their associated costs later.
That is why I believe this budget is insincere. It is the government's attempt to sell the GST once again, but this year's budget lays the groundwork for justifying raising the GST rate because spending is not cut enough.
The finance minister has been in the job for nearly six years. When he started the deficit was $38 billion. The fiscal year which we are now ending shows a deficit of $30.5 billion. Next year's forecast is for $28.5 billion. After seven years of Tory management, we will see our deficit reduced by less than $10 billion. Then suddenly, according to their projections, in four more years we are expected to believe that the deficit will be zero. Canadians can only believe the government for so long. The government can only say for so many years that the deficit will be zero in four years. To Canadians it seems as if tomorrow never comes.
If we look back to May 23, 1985, when the finance minister tabled his first budget, he predicted the deficit under several scenarios for the period ending with the 1990 fiscal year.
Under the finance minister's most optimistic scenario that he gave us for the economic growth over the first five years, the deficit would have dropped to $18 billion this year, not $28.5 billion. The growth in the economy was better than the period of his best scenario. While the economy grew by 20 per cent over this period, revenues
grew even faster. Their share of the Gross Domestic Product outpaced the minister's projection from 16 per cent to 17.5 per cent. Despite all this extra revenue did the deficit go down? No. In fact, interest rates were usually lower than expected in most years. The fact is that spending increased. It did not fall as a percentage of the economy as expected. Spending is the true culprit. This government is the guilty party by not cutting spending enough since 1984.
Just because the government has vocal opposition in this House lobbyists outside the House, most of whom are paid by the government, are fighting every dollar cut, saying what has been done is too extreme. These comments do not mean that it is too extreme. There should be a national interest and a concern for our future economic stability, more future than just looking toward the next election.
It is a shame when only the finance minister and the Treasury Board see the deficit as a serious problem and the national concern it is. Other cabinet colleagues see themselves as advocates for special interests rather than national interests. Before this budget cabinet ministers threatened if a special interest were cut, and then announced victory when it was not cut. All the cabinet should be united in deficit reduction because it is a national concern. Otherwise, how do you expect Parliament and the country to be concerned with it?
That is why every major program for which there is a special interest in cabinet is preserved, even though we cannot afford it.
The government says reducing the deficit will help reduce inflationary pressures and along with them interest rates. I agree with this statement, but only as long as government spending and taxing is such that it is geared not to spend in inflationary areas.
I have asked for a regional breakdown of revenues and expenditure to demonstrate that the government's fiscal policies could help ease inflation. Otherwise, the use of monetary policy is the equivalent of the government throwing water on the whole country to put out a fire in the furnace it is itself stoking. The government will not provide a regional breakdown for me. Either it does not have it, which is highly unlikely, or it does not want to release it, which is far more likely. Government spending must be such that it helps reduce and not fuel inflation. Unless it provides a breakdown, Canadians are left
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asking this question: What are they hiding from us as Canadians, is it incompetence or inequality for the regions?
Fairness does not mean spending the most on central Canada because all things gravitate to the centre of the universe where the most votes are, incidentally, in politics. The government steadfastly refuses to show us its spending to demonstrate that it is fair.
In this budget it has been estimated that approximately 40 per cent of the cuts directly affect Alberta. Albertans are not unwilling to make sacrifices. We all know that they sacrificed a great deal in the early 1980s under the National Energy Program. There are several areas where Alberta is being hit specifically. There is the public utilities income tax transfer, OSLO and CEIP. Under the NEP and the PGRT the energy sector did suffer. Now we are seeing it happen again. Albertans are feeling apprehensive about the Minister of the Environment's new environmental agenda. Will this slap a heavy hydrocarbon tax on Alberta? Albertans do want spending cuts, but Albertans want fairness in the cuts and equality of sacrifice right across the country.
British Columbians are asking why the Polar 8 has been cancelled while none of the Canadian patrol frigates are being cancelled, especially the three subcontracted to central Canada.
Alas, neither does there seem to be any sense of fairness for the provinces selected for reductions in transfer payments. Apparently, the most fiscally responsible were selected for that. We did not see a sense of fairness four days before the budget, when no doubt the cuts had already been finalized, the minister surreptitiously agreed to voluntarily pay $90 million in payroll taxes to the Ontario government, a tax which costs the federal government $400 million annually in lost revenue. Why, in the name of fairness, did the government agree to this tax payment four days before the budget? How is this fair to Alberta and B.C., two other of the "have" provinces?
Not only do the cuts in transfer payments to the provinces raise the constitutional impropriety of the federal government legislating in areas of provincial jurisdiction, but the federal government, even with these
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reductions, continues to dictate standards without providing access to the tax base to finance the high standards demanded. Furthermore, passing the blame to the provinces simply does not solve the problem of tax increases at the provincial level or unnecessary federal government spending.
Let me deal with some of the fiscal uncertainty that this government has created by failing to reduce the deficit. It has affected interest rates and the value of the dollar. All products of the government need to borrow greater amounts for our debt. It is not the other way around. Furthermore, the government's inability to get the deficit under control has meant the competitiveness of our industry and the entrepreneurial capital of Canadians is being taxed away to pay foreign debtors and to upwardly distribute tax revenue to those Canadians who can most afford to lend money.
Since this government has been in office, the reliance on foreign debtors has more than doubled the original amount. As the government taxed more of Canadians' income and left them with less and less to reinvest in their own country, foreign capital had to substitute for the deficiency in the economy each year. To attract and pay for foreign capital, our competitiveness is hurt with the high dollar and high interest rates needed to attract these resources.
I see no recognition of this program in this budget, nor any attempt to deal with the very real problem of the government taxing away and spending away our international competitiveness to fund programs at the expense of our future competitiveness as a trading nation and our ability to compete under the free trade agreement. The finance minister stated that these are all powerful reasons for holding to the plan we started in 1984. They certainly are. But they do not explain why this government has deviated so far and long from its original plan which would have given us a deficit of $18 billion.
The government itself treats deficit reduction as a more partisan game than anyone else in this House. To its opponents it says: "You are fiscally irresponsible socialists", and then pats itself on the back and says: "Well, compared to the other guys, look what we've done". For myself, the Reform Party, many Canadians and, sadly, international observers in the financial mar-

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kets are saying: "You were in office, not your opponents, and you have not done much".
The government's words and deeds on deficit reduction do not balance, so how could its budgets?
The government should have controlled our deficits so as not to leave a huge financial burden of debt to our future generations, but it did not. Under the transfer payment changes we see a dearth of research dollars. Young people, our human capital, will get the wrong signal that they are neither important to, nor supported by, government. Surely, developing brain power and technical specialists is the best long term deficit reducer for this country. No responsible government should want to leave a legacy of economic destruction and neglect to our posterity, just as no responsible government wants to leave a legacy of an environment ravaged by our neglect. The Reform Party believes strongly that both policy outlooks are inseparable for any party which sincerely believes in responsible government.
The government's sad refusal to acknowledge its lack of progress will not help to reduce deficits, nor will its protestations to calm international markets, nor will a litany of statistics created to disguise the facts. The instability of our dollar, rumours of downgrading our bond rating and high interest rates to finance the deficit are all signs of the lack of progress.
This government is responsible for the size of the deficit. It has been in office for six years. It cannot blame the size of the deficit and level of interest payments on the previous Liberal administrations of Pierre Trudeau, Sir Wilfrid Laurier, or whoever.
The Reform Party outlined in the 1988 election the cuts that should be made to get the deficit under control, all to unnecessary programs. However, sadly, these cuts are no longer sufficient. I regret to say that it has taken too long to tackle the issue of unnecessary spending. To control the deficit now will require cuts to programs that all Canadians need, not just want.
My party has been accused of wanting to cut medicare. Nothing could be farther from the truth. Yet we have seen this government cutting millions in health and post-secondary education. Soon the question will not be: What can we afford to cut? but, desperately: What can we afford to keep? That is the state that we are in.
Health and post-secondary education are what we need to keep, not cut. Even under the finance minister's current projections, which are optimistic at best, interest payments will just level off. The projections after two years are in fact a fantasyland of projections, low future interest rates, low unemployment and high economic growth which this budget does little to build the fiscal foundations for.
This government is leading us to the brink of economic ruin proclaiming: "We have been doing a great job". But the international community knows otherwise, and Canadians know otherwise. All the signs are there for nervousness.
Earlier this afternoon the Minister of Consumer and Corporate Affairs said: "Canadians say, Cut, cut, cut, but don't cut in my backyard". We are at the point in Canada now where in my home province of Alberta people are saying: "We are willing, personally, to take cuts". Sadly enough, the cabinet ministers themselves are saying in reaction to the gathering storm clouds of economic warning: "It's all perception, the problems out there. I'll be hanged if you will cut spending on my particular program and I'll be hanged if I'll be hanged". Unfortunately, perception aside, reality lies in front of us. Reality lies ahead. This country will be hanged if they don't.
Right Hon. Joe Clark (Secretary of State for External
Affairs): Mr. Speaker, that must be the vaguest speech that has been made in this budget debate.
I was interested in the hon. member's references to sincerity. Of course the test of sincerity is whether she is prepared to back up her rhetoric with an indication of particular areas in which she will cut. She indicated that she did not think there had been cuts enough in agriculture. I wonder if she will tell us what programs in agriculture she thinks should be cut.
I would also be interested in her responding to this very simple question. Does she support the continuation of the OSLO project? Does she support the continuation of the Polar S?


Deborah C. Grey: Mr. Speaker, I have to say that I am certainly flattered to have a senior cabinet minister here to listen to my speech and to ask some very appropriate questions.
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First, I will tell you, Mr. Speaker, and make it public to the House, that we issued a press release from my office last year saying what cuts we thought could be made. I also have to say that I received a personal phone call from staff of the senior minister. He certainly knows some areas in which the Reform Party and I personally have advocated cutting. I think that certainly is no surprise, and we could go on and on.
I have been accused of having simplistic answers to budget control. I know there are no easy answers to budget control. I am probably the only opposition member in this House who will give credit where credit is due to this government. I stand sometimes on a lonely road on this side of the House, but I certainly am willing to do that. That is positive. I am glad to give credit where credit is due.
We have had meetings both privately and publicly with people about the OSLO project. They are in the vein that it is unfortunate because the prices are so low now. The meetings we have had for people are saying: "We are very sorry that the government has to cut out on this, but if there is no confidence in the private sector then it simply will not work". Again, we are willing to say that unless oil prices come up again the government probably made the right decision.
What I did say about the Polar 8 is that maybe there is no need for the Polar 8 as the government thinks. What I was discussing was the apparent discrepancy for the people in B.C. They have had promises from senior cabinet ministers saying: "This will be done, we promise. Trust us". They are finding difficult the discrepancy between the Polar 8 being scrapped and seeing other frigates still in continuation in eastern or central Canada.
Please remember that we are willing to give credit where credit is due.


Right Hon. Joe Clark (Secretary of State for External Affairs):: Mr. Speaker, I heard "maybe" and I heard "if". Is she in favour of OSLO, yes or no? Is she in favour of Polar 8, yes or no? What are the cuts in agriculture that she is proposing? We want a straight answer to a straight question, not "maybe", not "if".


Deborah C. Grey: Mr. Speaker, people in the agricultural sector are saying "yes", not "if". They are saying: "Yes,
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we will be willing to take cuts if there are cuts unilaterally across the country and if there is equality of sacrifice".
Yes, Polar 8 can be scrapped, but not just scrapped indiscriminately. This is what I am hearing from people.
This government simply needs to get back on its feet. We are in financial disaster in this country. I do not like to see Polar 8 being cut. I do not like to see OSLO being cut.


Mr. Scott Thorkelson (Edmonton-Strathcona):: Mr. Speaker, I was interested to hear some of the comments from the member for Beaver River.
She talked about national interests and about special interests. The Reform Party is on record as advocating cuts to the bilingualism program. Does she consider that a special interest or a national interest?
Is she willing to recommend cuts, as has been advocated in the past, to multiculturalism and to race relations? Are those national interests or are those special interests?
Does she want to cut across the board, as some Reform members have suggested, which would mean 10 per cent or 20 per cent across the board, cut pensions, cut health care and so on.
The member was very interesting in her speech. She talked about singling out Alberta and then said: "We are willing to accept cuts in Alberta". She cannot have it both ways. Have we singled out Alberta or not? Are we willing or not to share the burden? Could she answer those questions for me?


Deborah C. Grey: Mr. Speaker, I have just been accused of being vague. I have to say forgive me, but I was told by the hon. minister that I cannot answer questions. I simply have to confess that I did not even understand some of those questions.
We are talking about Alberta here. Albertans are willing to make sacrifices. We are talking about special interest versus national interest. My hon. friend would know that official bilingualism as it stands from this end is a national interest. Yet we see it simply does not work in practicality across the country. We see, unfortunately, many groups coming forward making statements such as: "We do not like this heavy-handed approach from on high".
I said quite clearly in my speech that the Reform Party is against health care being cut. What we are specifying

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against universality is for instance in day care where we simply cannot afford it. We need to target these programs for people who need them.


Victor Fredrich (Vic) Althouse: Mr. Speaker, I wonder if the hon. member for Beaver River would hearken back to the beginning of her speech when she criticized the government for only having substantial cuts in five departments. She then referred to further cuts being possible in agriculture. I wonder if she had included agriculture as one of those departments that has had substantial cuts given that in 1988-89 its Estimates gave it $3.2 billion. This year's Estimates give it $1.9 billion, which is a drop of $1.3 billion or a cut of 40 per cent.
Is agriculture one of the five that got substantial cuts, or is she looking for larger cuts than that to qualify as substantial?


Deborah C. Grey: Mr. Speaker, I thank the hon. member for his question. What I did say in my speech, and I will read it again so that the hon. minister can understand it as well, is that the budget of the Secretary of State actually increased after the non-recurring payments to Japanese Canadians are removed. The Agriculture budget fell, but that was as a result of last year's budget and the drought assistance programs that happened.
That may clarify that for my hon. friend as well. The actual dollars went down in Agriculture because of the huge lump sum that was helping out those who were suffering from drought.


Mrs. Beryl Gaffney (Nepean):: Mr. Speaker, as always the privilege is mine on behalf of my Nepean constituents to participate in debate here in the House of Commons on this particular occasion and of course on the budget.
During the House break this past week I had the opportunity to speak to many of my constituents and discuss the effects of the various budget measures being imposed by the present government.
Despite what the finance minister has relayed to the people of Canada, this budget is full of tax increases. This budget will relentlessly pursue a brutal and discriminatory high interest rate policy. It will widen the gap between the rich and poor. It will respectively end regional development in Canada as Canadians have
known it. The fallacy of no new tax is the most blatant act of deception.
This government has lost the vision of this country, or maybe it has never realized what Canada is all about.
This budget indicates that the government has no sense of responsibility for the framework of Canada as we know it today.
Let us look at a few areas. First, the government has not made any significant moves to cut its own spending. Let us take a look at one area, the PMO.
When the Liberals left office in 1984 the cost of the PMO was $6 million and there were 104 person years of employment. Upon taking office the new Prime Minister increased the budget of the PMO by close to $1 million and added 16 more person years.
What is happening today in 1990? We tried to find out what the figures were today. Unfortunately, we are now not able to get a clear idea of how much the PMO has increased staff and spending this year because they have come up with another new accounting trick to hide the number of people on staff. The PMO has decided to eliminate all political staff from the accounting in the 1990-91 Estimates so that the person years of the PMO are listed as nil. This trickery is a blatant attempt to hide how much the PMO is costing Canadians and how many more people are now employed by the Prime Minister to figure out more ways to trick Canadians.
Federal funding for universities through transfers to the provinces, since 1983 has been cut by $8.9 billion. The 1990 budget cuts alone for health care and education are a reduction of $7.3 billion in payments to the provinces. Yet the minister has never consulted with anyone to determine the effects of these drastic measures.
Funding for post-secondary education should not be seen as an expenditure. Education is an investment, a necessary investment in Canada's future.
Has the government looked at the damaging effects the reduction in research and development funding will have? By passing the responsibility for funding and performing R and D to the private sector Canada runs the risk of jeopardizing long term scientific commitments.
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Some $39 million is cut from planned science programs at a time when Canada desperately needs to be increasing science-based innovation to ensure our economic strength in the future.
The social housing budget in the next five years will be reduced by $165 million. This is at a time when the homeless in Canada number 200,000, or 1 per cent of our population. In addition, the GST will cause new house prices and renovated home costs to increase.
The most callous of budget cuts is to our veterans. How can the Minister of Veterans Affairs say, and I quote: "The budget will have a minor impact on veterans"? The long term care costs to Canada's veterans will be increased by $35 million. Does this government have any conscience at all?
Women's programs will be seriously affected. Budget cuts to core financing for 80 women's centres across the country will most likely see many of them close. Many of these service women in rural areas. These agencies act as referral centres for women on issues of friendship, native groups and battered women. They provide essential services to women at a time when violence is being recognized as one of the most pernicious forms of behaviour against women.
Cuts in social housing will affect women. The majority of poor women in this country are single mothers.
Once again, corporations get off easy in respect of the corporate income tax. In the 1990-91 fiscal year the federal government is expected to collect $2.4 billion less than predicted a year ago. Had the government collected what it expected from corporations, it would not have had to cut its expenditures by $2.8 billion this year in its budget.
Astonishingly, though, when the business sector is so adamant about deficit reduction, the minister has chosen to lighten the burden of corporate taxation since the Conservatives came into power. Whereas corporate taxes accounted for 13.2 per cent of total federal revenues in 1984 and 1985, in 1990-91 corporate taxes will account for only 10.4 per cent of federal revenues. Who is picking up the slack in between? It is being picked up by the low income and the middle-income person.
This projected trend is all the more difficult to comprehend, given that the corporate sector will be a major beneficiary of substituting the GST for the MST. Even assuming that removing the FST is fully passed
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forward to consumers, the corporate sector will still save some $6 billion in taxes on goods and services. Further, in 1991-92 manufacturers will be refunded more than $2 billion for the FST paid on inventories. Stage two of tax reform is veiy beneficial for the corporate sector.
One of the most incredible deficiencies in the budget is one that does not affect my ratepayers, but it does affect the national economy, in particular the Atlantic economy. There is no new money in the budget to address the fisheries crisis in Atlantic Canada. I say, shame on you on the government side of the House. This is a region of Canada that is so dependent on this industry.
Since this government came to power in 1984 unprecedented revenues-over $120 billion in six years-were realized through economic growth. Yet for a government which insists it is interested in deficit reduction, it certainly missed the opportunity to make meaningful reductions in the deficit during those years when we were experiencing world-wide economic growth. What did it do with this 70 per cent revenue growth? What was the $120 billion used for? We do not know, and the government is not telling. It certainly was not for deficit reduction.
Canadians across this country are fed up with this government and its practice of raising taxes-33 times in five years. Yet it has not reduced its own costs. Revenues can be raised by means other than a GST, Canadians are saying. Scrap the tax and let us get down to the basics of running this country, and running it the way it should be run.


Fred J. Mifflin: Mr. Speaker, I listened with great interest to the excellent speech made by my colleague. She certainly covered a lot of ground in a very short time. I commend her on the conciseness and the punch it contained in such a short time.
I want to comment on that part of her presentation in which she said that the most callous of all cuts were the cuts made to veterans. I find it singularly distracting and somewhat disappointing, if not incredible, that in discussing this in Question Period with the Minister of Veterans Affairs two days in as row the minister has said that there are no cuts. I am having a lot of trouble with that. Obviously, veterans organizations are as well because I, as the veterans affairs critic, am getting an awful lot of comment and reaction from one end of the country to the other. Veterans cannot understand how a minister

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can say there are no cuts and on the other hand they are losing a total of $35 million.
I note in a book authored by the President of the Treasury Board entitled Managing Government Expenditures that it talks about savings of $8 million and $10 million in the period 1990-91 will be obtained under the Veterans Independence Program which is designed to keep the veterans at home so they do not have to go to hospitals. By restricting the range of services that are funded, this is how this $18 million will be saved.
I think the important thing to remember here is that the average of a Canadian veteran is 70. This cut-back on the Veterans Independence Program which involves heavy housekeeping is very important to them if the aim of the program is to be upheld.
I commend my colleague on her use of the term callous. I can only hope that the comments by my colleagues, other people on this side of the House and perhaps even some on the government side of the House about the callousness of this particular cut will make the Minister of Veterans Affairs see fit to go back either to the Prime Minister or to the Minister of Finance to see if he can make some amelioriation or some adjustment to restore this benefit that has been taken away from veterans. This is the first time since the Great Depression that anything has been taken from veterans.


Beryl Gaffney: Mr. Speaker, I would like to thank my colleague and comment on his remarks. I think the old saying goes that if you repeat a story often enough you begin to believe that what you are saying is true. I am beginning to think that the minister responsible for veterans affairs has repeated to himself and to his colleagues often enough that there are no cuts to the veterans in this country that he himself is beginning to believe it. That is unfortunate because I know that there are cuts. Those veterans know that there are cuts.
I wonder how many people in this House of Commons have visited a veteran in a veterans' home in their area. The one here in Ottawa is called the Rideau Veterans' Home and is on Alta Vista Drive. I would invite you to go and visit a veteran and to see the accommodation for the ones who are in the home where we are increasing then-charges in this home. Sure, less than $300 a month is paltry for the government. They think this is a minor inconvenience. But to those veterans who are living on a
very limited pension it is a major expenditure for them. It is not so much for the ones who are living in the home, but the ones who are able to live in their own homes and are now going to lose their housekeeping funding money that was being provided to them before when they cannot get out and shovel their driveway, clean their windows or do the basic necessities that you and I can do because we are still able-bodied people. Again I say, shame on this government.


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated. Debate. The hon. member for Cardigan.


Lawrence MacAulay: Mr. Speaker, I would like to take this opportunity to address some of the problems facing Prince Edward Island and, in particular, my riding of Cardigan.
My riding is predominantly rural, made up mostly of farmers, fishermen and small businessmen. Most of the employment in the area is seasonal, and as a result UIC benefits are extremely important. With so much seasonal employment in P.E.I., it is necessary to find a way to reduce our reliance on unemployment insurance. One program, the Atlantic Canada Opportunities Agency, known as ACOA, was established to create more longterm, stable employment. However, the 1989-1990 and the 1990-1991 budgets have done much to reduce the effectiveness of this program.
Last year the budget of the Minister of Finance cut a large chunk out of the ACOA budget. And if that was not bad enough, this year all grants for the program have been completely eliminated. This, in effect, has reduced ACOA to a simple bank, nothing more. The purpose of ACOA was to attract business through incentives. Now that these incentives no longer exist, business interest in the program is on a decline, dramatically.
Prior to the budget, the government promised aid to the Atlantic fishery in this, its time of crisis. Many references were made to the need for substantial aid to the area, the same as was given to the western grain growers. However, as we now know, the budget contained nothing for the fisheries industry. This gives a clear and unequivocal signal to Atlantic Canadians that the Prime Minister and the government he leads do not consider the fisheries crisis a priority. Otherwise, the

government would have acted as quickly as it did in the western grain crisis.
Within the next six months, the P.E.I. fishery could find itself in a crisis situation, just like that occurring in Newfoundland and Nova Scotia. The recent U.S. legislation restricting lobsters under 3.25 inches will cause irreparable damage to the island fishery and economy. This legislation will affect 80 per cent of our lobster exports to the U.S. market. The impact is enormous, considering the lobster industry employs 10 per cent of my province's labour force. It represents 80 per cent of the Island fishery and accounts for 25 per cent of the Island's exports. In essence, the province's second largest industry is on the verge of collapse, should negotiations to repeal the law be unsuccessful.
The problems in the fishery on the Island do not stop there. Nearly every month I receive letters from local fishermen alerting me that yet another wharf or harbour is badly in need of upgrading or repairs. These small craft harbours are vital to the long-term viability of the Island fishery and, therefore, must remain, at a minimum, operable.
It has been noted by many industry officials that the current small craft harbour budget is ridiculously insufficient to meet the current needs. The recent budget cut of $4 million to this program illustrates this government's failure to recognize the gravity of this very serious situation.
Several years ago my riding of Cardigan was held by the Hon. Dan MacDonald, an outstanding Canadian war veteran who lost both an arm and a leg defending Canada in World War II. He represented Cardigan and Prince Edward Island with great distinction. With Dan as Minister of Veterans Affairs, the department developed a more human touch because he was aware of the veterans' needs, for he also was a veteran.
It is very sad to see the damage that six years of Tory government can bring. More than 5,000 aging veterans, who by illness or injury are confined to chronic care hospitals will now have to pay more than $3,000 each for their beds. This is a slap in the face to all veterans across Canada. This government has clearly lost all semblance of humanity, the most recent example being the regret-
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table action against our war veterans. Veterans should be treasured, not destroyed, most Canadians would surely agree with me on this point.
During the last six years, the government has not dealt sufficiently with the question of post-secondary education. Recently the government has stressed that the need for an educated labour force and better training. Therefore, WOUld it not make more sense to provide these institutions which train and educate, with more financial assistance to meet these goals? Instead of increasing financing to post-secondary institutions, the government saw fit to cut the Established Programs Financing.
In effect, this will force students in Prince Edward Island's only university and only college to pay more for their education. Prince Edward Island is in a depressed region, and currently over 75 per cent of all Island university students must take out loans to support their education. The budget will certainly make this figure rise. In light of this, this government's commitment to education and training is certainly in shambles.
The cuts to Established Programs Financing will also affect the ability of the health care system to perform at its present level. To maintain its present level of service in the health field, the provincial government must increase taxes. This would certainly seem to contradict the minister's statement of "no new taxes".
The flip side of this is that if taxes are not increased, then the level of service must be reduced. Could this be the beginning of harmonizing our Canadian and American health systems, to put Canadians on the same level as the American health system? The people of Cardigan certainly hope not. We know, and the government knows, that Islanders and all Canadians will not permit this attack on our medical system.
I would like to turn my attention to the Prince Edward Island tourist industry. Each year Prince Edward Island attracts 800,000 visitors. They come to watch Anne of Green Gables and other performances at Confederation Centre of the Arts. They come to see the beautiful scenery and historic buildings such as Province House known as the birthplace of Canada. Of course, visitors come to enjoy beautiful beaches, excellent seafood and our fine P.E.I. potatoes. Our tourist industry could take a severe plunge in fortunes, beginning this year, when the

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tourist season goes through its first year with the devastating VTA Rail cuts in effect.
Also, it has been predicted that nationally, 30,000 jobs will be lost as a result of the government's infamous GST. In Atlantic Canada, with about 10 per cent of Canada's population, that translates to about 3,000 jobs. The Tourist Industry Association of Prince Edward Island has formally denounced the GST as being potentially disastrous for the industry in Atlantic Canada.
The GST will do two things for certain. It will increase taxes, and it will cause the loss of thousands of jobs, not only in Cardigan, not only in Prince Edward Island but all across Canada. This is something of which the government should surely be ashamed.
Finally, I wish to thank you for the time to express, through me, the views of the people of Cardigan of this budget.


Ron J. Duhamel: Mr. Speaker, I would like to thank my hon. colleague for his comments.
I want to review with him a number of the difficulties that his province has experienced. Perhaps he could tell me which one has had the most disastrous effect on this small Island.
The closing of the military, of course, was one that has caused great anxiety among the people of Prince Edward Island.
He referred not only to the current fishing difficulties, but those that he anticipates. He also made reference to the budgetary implications, the reductions for the veterans and how badly we and many other Canadians feel that they have been mistreated. He also referred to health reductions that will have an impact upon the elderly and those who are not well, as well as the reductions in education which will have an impact upon our young people who are seeking to build a better future for themselves, the province and country.
I have also been told that these reductions are now having some negative effects upon the elementary and secondary sectors, particularly of small provinces, because they do not have the funds to try to keep the health and post-secondary infrastructures that are already in place.
Finally, the hon. member mentioned tourism and the impact the goods and services tax will have on that, quite apart from the increased taxation that will result because of the reductions to health and education. I would ask him to comment on those measures he believes have had the most disastrous and negative effect on the people of his constituency of Cardigan, or on the province itself?


Lawrence MacAulay: Mr. Speaker, I would think that probably what would have the most devastating effect in my area is if this law passed by the U.S. is allowed to remain in place. If we cannot get this law that restricts lobster under 3-1/4 inches from entering the U.S. market, it will be disastrous for the fishermen in Cardigan.
There is no question that the reduction of funds to health and education and the loss of our military base have removed dollars from Prince Edward Island and the Island economy, but with this this move in fisheries, it will be totally devastating to our fishing industry.
There are many other problems, of course. With cuts to small craft harbours, we now have many harbours all around the Cardigan that is desperately in need to repair. But if we cannot sell the fish, it will be a disastrous decision, so we hope to God the free trade panel will do some good.


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated. Debate. The hon. member for Winnipeg South.


Mrs. Dorothy Dobbie (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: Mr. Speaker, I am pleased to rise today to endorse the over-all thrust of this budget. It is a responsible budget. It is a sensitive budget, and it is a budget that is geared to the realities of today and Canada's position in a competitive global market-place. It is a budget that seeks intelligent compromise and balance between sound money management and the demands of a society which

has learned the addictive art of constant gratification. This is a budget that imposes restraint but it is not a budget that bruises or punishes.
Some hon. members opposite will disagree. Lacking real targets for criticism, they will seek shadowy targets, bogeymen with which to frighten the public. But this budget contains no bogeymen. Even so, we heard a moment ago and we will continue to hear impassioned speeches about how the federal government has transferred its problems on to the backs of the provinces.
Some will complain that the provinces will be forced to cope by cutting, spending or by raising taxes. No doubt, that is true. No matter how you slice it, every dollar that we spend as governments, whether we are the federal government or the provincial government or the municipal government, comes out of the very same pocket, yours and mine and the fellow across the way.
But worse, and in my opinion far worse, is that every dollar that we spend beyond our ability to pay comes out of those same pockets, but not just on what we have earned today but on what we will earn tomorrow and what our children will earn and, if we keep it up at the same pace, what our grandchildren will earn.
There is no magic bottomless pitcher here spewing forth money in an endless stream. There is only you, me and these hon. members across the way, and what we can produce from the sweat of our labours. Whether it is the federal government, provincial government or the municipal government, we all have an equal responsibility to curb spending and manage the taxpayers' dollar more efficiently.
To suggest somehow that the movement of the tax burden from one level of government to the other will somehow affect the bottom line, what you and I pay as individuals and as taxpayers, is sheer nonsense. No matter who spends, no matter what level of government spends, the same guys pay, you and I and the fellow next door.
Currently, 35 cents out of every federal dollar that the federal government collects goes to service the debt. Only 12 cents of the provincial tax dollar goes for the same purpose. Does it make sense for Canada to borrow even more money to pass on to the provinces? Is that not just a shell game, like we have heard? Does the freeze on the established funding program not simply expose that
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shell game? The expenditure reductions announced in this budget are absolutely vital to Canada's future.
Let us just take a look at our country from a broader point of view for the moment. Those of us who have done business abroad or who have travelled abroad have come to realize that Canada has been living in a dream world for the past couple of decades. We have lost touch with that stark reality of life that is there for most of the world's population. That reality is that you have to work for what you get and you cannot live forever beyond your ability to produce. Sometime, someone has to pay the piper and that time is now.
We are indeed a rich nation, richer beyond the wildest dreams of many, but even Canada cannot afford to spend without regard for the future because we must ultimately pay for that kind of philosophy, and to do so we are forced to rely on other countries, countries who manage their resources more successfully than we do.
Let us just ask ourselves why these countries are prepared to lend us their savings. Is it because we are nice guys, because we are good people? I am afraid not. There are simple economic reasons. Foreign lenders give us money to cover our profligate spending because they can make money on their investment. It costs us plenty to borrow. The cost of this borrowing robs us of our ability to pay for the things that will add to our wealth, that will enhance our competitive position tomorrow. That is the position that we have lost through the tremendous tax burden that we place on our citizens and on our business community.
Mr. Speaker, do not believe for a moment that even these money markets are willing to fund us indefinitely. In fact, insecurity about Canada's economy has prompted comment from the international monetary people in the past. The message is straightforward and clear cut: Get your fiscal house in order; stop spending beyond your means.
What does that mean to us? It means that if we refuse to listen, if we fail to take exactly the kind of measures that have been announced here in this House on February 20 by the Minister of Finance, then we can expect continued pressure on our interest rates, we can expect an erosion of confidence in Canada as a good place to invest. We can expect a reduction of confidence in Canada as a mature responsible nation which has
i

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earned a right at the decision-making tables when international affairs are being discussed.
Today no country can afford to live in isolation. What we do, even in our internal affairs will have an international impact. That in turn will impact upon us. We must learn to co-exist in a market driven society prepared to respond to the subtle checks and balances that are a natural part of that system. We must have the flexibility as well to respond to international conditions as they shift and change, as they are shifting and changing even now. But a country so deeply in debt that more than one-third of its tax revenue goes into servicing this debt, cannot have this flexibility and the freedom to do these things. A country that has mortgaged its future cannot possibly be in total control of that future.
Mr. Speaker, is that the kind of country that Canadians want? I think not. We pride ourselves on being in command of our future and some claim indeed that the 21st century belongs to Canada. But that is difficult to believe when it looks like we could enter the 21st century in hock up to our necks.
In fact, unless we take hold, unless we take strong, fearless measures to reduce our debt we could enter that century bankrupt. A nation's strength and autonomy is based on its wealth. Without financial resources a country is weak and vulnerable, defenceless against foreign incursions of all kinds. Being broke is one thing, being heavily in debt is quite another, because when you are in debt your vulnerability becomes public property. Everybody knows that you are in trouble. But some will argue that Canada has always been in debt. We built our nation on the debt incurred to build the railway, they will say. But I say there is a vast difference between a fledgling nation borrowing to build its infrastructure and a mature country borrowing because it cannot manage its vast resources and live within its means.
We hear a great deal about our social programs and every move toward sensible money management is held up as a deadly threat toward these programs. Let us examine the issue in the clear pure light of reason. First of all, why do we have social programs? Well, the answer is simple. Social programs are a natural emanation of an
enlightened society's will to deal with an innate fact, the innate fact of inequality. Our social order compels us to provide sustenance and assistance to members of the group who cannot temporarily or permanently provide for themselves. I do not think many people would disagree with this basic philosophy.
Where the quarrel begins is over when this assistance should actually kick in. Should we be giving social assistance to the middle class? When I was a young girl, taking any form of social assistance was something to be avoided at all costs. Today it seems that things are different. We have taken the basic premise of social assistance to a point that it is not only potentially harmful but is also beyond what we can afford to support in many cases. We have done this in the mistaken belief that there is some unlimited source of income to be tapped for this.
Well, there is not. The government's only source of income is you and me. It is not true that you can tax the corporations, tax the rich, tax the tax avoiders, and somehow suddenly solve the fiscal shortfall. Indeed, Canada has already taxed corporations to a level that is bordering on the uncompetitive, and to increase the pressure simply forces companies, Canadian companies along with others, to move their assets elsewhere.
Some members opposite will not like to hear this but business is in fact our only source of wealth in the kind of society that we have in place today, and business is highly mobile. If conditions in a certain jurisdiction are unbalanced, unfavourable, business simply picks up and moves on and so does personal wealth.
Look at what has been happening in China and in Hong Kong. Ever since it became clear that the People's Republic of China would take over Hong Kong in 1997, large corporations and the wealthy have been quietly hedging their bets, setting up conduits through which they can move their capital quickly and efficiently if things get tough. Well, much of that money has already moved to Canada because Canada has been seen as a stable economy under a not-too-restrictive government with a reasonable monetary policy. But all we have to do is tighten the screws on that policy through heavier regulation and taxation and just watch that capital leave the country seeking a more favourable climate.

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So tax the rich, tax the corporations more, tax the tax avoiders if you can catch them-the net is so tight in Canada right now that very little escapes. In the end what do you have for this exercise? Ultimately, probably less than you have today because you have driven the wealth producers out of the country.
The answer is balance. We must accept that there are some things that we cannot afford. We must accept that there is a need to better manage the resources that we have. We must accept that a balance has to be struck, and in fact balance is what the minister has sought and has achieved in his monetary policy since 1984. Balance is what I believe the minister has achieved in this budget.
Let us look at the budget for a moment. What does it really do? Well, for one thing it does not raise taxes and that is very good news for a citizenry that has been feeling squeezed by several levels of government. So no new taxes. No additional taxes is another step in my opinion in freeing up choices for Canadians. The goods and services tax which replaces a pernicious tax on manufactured goods is the first step in that exercise.
Next, the budget reduces spending through programs of restraint across the board. Social programs are not affected and in fact services have received actual dollar increases.
The Opposition has zeroed in on the transfers to provinces. Opposition members claim that the freeze on the Established Programs Funding will somehow lead to the total collapse of the Canadian education and health systems. Both are matters of provincial jurisdiction so that takes quite a leap in logic.
Provinces will not get less than they get right now. In fact, the have-not provinces like those in the Atlantic region or Manitoba will continue to receive dollar increases in line with the growth in the economy over the next two years through the equalization transfers. It should also be noted that since 1977 provinces have made their own decisions over how their established programs funding is spent. I repeat, provinces can use their EPF transfers which were originally earmarked for health and post-secondary education in any way they see fit. If health care and post-secondary education in Canada are suffering, perhaps provincial governments
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would like to examine their own spending priorities or reorganize the way they manage their budgets.
What else is in this budget? More good news. Grants to businesses will be reduced and replaced by repayable loans. Businesses themselves have been suggesting this, and why? Well, because grants and subsidies distort the market-place and contribute to a dependent, non selfsustaining commercial infrastructure that undermines the integrity of our economy. The government is getting out of business. This is excellent news.
Significantly, Petro-Canada will be sold, transferring state control to the hands of the public and repeating the remarkable success story of the Air Canada sale. It is right to sell Petro-Canada to Canadians as individuals. It is wrong for the state to control such an important conglomerate and to acquire its control through the use of tax dollars. State-owned, state-controlled businesses present an element of unfair competition to natural enterprise. They tend also to be inefficient, or dictatorial or both because they do not have to depend on the vagaries of the market-place and respond.
Since its incorporation in 1975, Petro-Canada has grown into a multi-faceted giant whose tentacles extend into many areas that are generally very well served by the private sector. So it is time to return the assets of Petro-Canada to the people who, as individuals with market-driven incentives, will manage those assets far better than can government. In addition, funds raised through the sale of shares can assist the newly emerging, commercially-owned Canadian company to capitalize purchases to keep it appropriately competitive with international interests.
The government is also selling Telesat Canada and winding up the affairs of a number of other Crown corporations that have outlived their usefulness or their original purpose.
The government has also addressed its spending right here at home. Today the civil service is at the same manpower level it was at in 1973 and wage restraint continues to be the order of day with federal public sector increases running at about 3.5 per cent, well below the cost of living. The government has closed tax loopholes.
The government continues to wage war on waste and redundancies. Since 1987-88, the government has been running an operating surplus which now stands at $9 billion. This is a clear indication that the fiscal policies of

March 6, 1990
The Budget
the Minister of Finance are working. Whether my hon. opponent likes to admit it or not, they are working.
I have to conclude by saying that this budget is a prudent budget and it is a sensitive budget. It recognizes Canada's conceits and respects them, but it is a budget that nurtures the disadvantaged while spurring on the strong and the enterprising. The hon. minister has done a wonderful job in trodding a delicate line toward a goal of a stronger Canada. I commend his efforts and I applaud his courage. He has done what is right over what is expedient.


James Capsey (Jim) Karpoff: Mr. Speaker, I would like to draw to the member's attention a couple of things she certainly has not talked about. In my community of Surrey North, which is the fastest-growing community in Canada, there are problems. One of them is housing and the affordability of it. I would like her to set out for me clearly what things in this budget are going to help the affordability of housing. What things are going to bring down the interest rate by 5 or 6 per cent, which is necessary to get housing under control?
What about the fact that the social housing program has been totally gutted? CMHC has now been turned into an agency that is nothing more than an insurance broker for the private sector. The Conservatives have totally abandoned any concept of affordability in housing, any concept that the country has a responsibility to provide housing for people on middle or low incomes. They are simply concerned about making sure that those friends of theirs who wish to flip property for massive profits are able to do so.
Second, she says there is no harm in this budget. In my municipality we have a 400-bed shortage in hospitals. Some of the existing beds are not being opened simply because there are not enough operating funds. Since 1971 we have gone backwards in terms of the ratio of hospital beds to population. The provincial government is not, with a cutback from the federal government, going to increase its funding. It is having enough difficulty maintaining its funding. It is simply not going to come up with the additional dollars. It is a federal government
responsibility to ensure that there is universal health care in this country.
I would like her to comment on those two things. What are the positives in this budget to assist families, firsttime home buyers to obtain affordable housing? Second, try to explain to me and to the people of British Columbia why this is not going to be a blow to our serious health care crisis in the province.


Dorothy I. Dobbie: Mr. Speaker, I thank the hon. member for his multi-faceted question. First of all, the tone of his question suggests that he believes in that myth that I was speaking about earlier, that somehow money grows on trees, that if you take the dollar that we collect as a tax collector, by splitting it into three pieces like many fishes, you can make it grow into something beyond what it is.
In fact, it makes no difference whether the dollar is coming from the federal government or the provincial government or the municipal government, it is all coming from you. When you ask what the government has done to do this, that and the other thing to assist this person and that person, the fact is we are taking the dollars out of your pocket and we are cutting them up as governments and telling you how your dollars should be spent. The hon. member may feel that that is appropriate where he comes from, but there are many Canadians who not only do not feel it is appropriate, they simply cannot afford to have it done anymore. When 50 or 60 cents of your wages come out of your pocket and go into taxes you have to have some concerns.
Second, the hon. member asked about housing. He says that the government has abandoned a lot of programs that had to do with assisting first-time home buyers and so on. He is quite correct in that. The government is abandoning a number of assistance programs for middle-class people under the expectation that Canadians are strong enough, that they are confident enough and that they have the ability to fend for themselves, just as they did when I was a girl growing up. They have just stopped learning to do that in the last couple of decades when a philosophy prevailed in this country that somehow you could get something for nothing.
You cannot get something for nothing in this world. You can only put off paying what you owe today until tomorrow. The hon. member is suggesting that somehow we should put off until tomorrow paying what we owe today, what we owe for yesterday and what we owe for

the day before because somebody else did a lot of profligate spending. Already our children are in debt up to their necks because of that kind of philosophy. If we keep it up our grandchildren will be in debt up to their necks and there will not be a country called Canada because we will not have the strength, the ability or the resources to be able to command our own future.
I would suggest that if it is true, as the hon. member says, that there are people waiting in line for hospital beds in his province of British Columbia, perhaps the provincial government should take a look at how those hospital beds are being funded and find more creative and more productive ways of seeing that the health needs of the population are met. Clearly, the way governments are doing it right now and the way governments have been doing it for the last little while, has not been working. We are spending more and the services are getting less. There must be another alternative. I do not think the reasonable alternative is to take taxpayers' dollars and turn them over to bureaucracy and suppose that all our problems are going to be magically solved.


The Acting Speaker (Mr. Paproski):: A short supplementary, the hon. member for Surrey North.


James Capsey (Jim) Karpoff: Mr. Speaker, the member says that people should be able to look after themselves with regard to housing. How does a young family earning $35,000 buy a house in metropolitan Toronto or metropolitan Vancouver? The member is worried about give-aways. Why did she vote last week to give away another $400 million in RRSP contributions to people earning over $50,000 a year? The total budget cost to this government is now $11 billion in RRSP give-aways to the rich. How do you justify that to the single-parent families trying to buy a house? What they have done is they have taken money from the poor and given it to the rich. That is the Tory philosophy.


Dorothy I. Dobbie: Mr. Speaker, the hon. member should listen to what he just said. He suggested that somehow we are taking from the poor and giving to the rich. I am not sure how he works that out. If the poor are as poor as we are being told they are, they do not have anything to give. In fact, that is not the way it works. The way it works is that the resources we have are generated by the business people, the people who this hon. member would like to see driven out of town on a rail. If we do that, we
The Budget
will not have any resources. You cannot take from the poor to give to the rich. The poor have no resources. It is a silly question.


Mr. Peter Milliken (Kingston and the Islands):: Mr. Speaker, I have been in the House for most of the day. To say that some of the speeches I have heard today are incredible is putting it mildly. The speech of the hon. member for Winnipeg South Centre, the parliamentary secretary, is a case in point. I could go into that in detail, but there was another one that was even more unbelievable, and that was made by the Minister of Supply and Services earlier today.
I would like to deal with some of the points he raised in his attempts to defend this disastrous budget that the Minister of Finance has imposed on Canadians. He had the gall, and I can only describe it as unmitigated gall, to try to compare the Government of Canada with the Government of Ontario. He tried to do it in a way that suggested that the Government of Ontario was the one that looked bad, not the Government of Canada. It was, as I say, an unbelievable speech. I thought that he displayed a certain riskiness in making this comparison. I would like to draw on that comparison in a way that is perhaps less favourable than the minister intended.
First, he suggested that the Government of Ontario was somehow less responsible fiscally than the Government of Canada. He suggested that because government spending had increased at a slightly faster rate than this government's had, therefore, somehow it was less responsible.
It is hard to imagine that coming from the minister who, of course, was using figures that could only be described as suspect. He did what the Minister of Finance has done repeatedly in this budget. He draws on figures that show increases in program spending only, not over-all government spending. They somehow think that program spending is different from over-all government spending. Everyone knows that is not so. If the government is short of money at the end of the year, it has to borrow. We have a borrowing bill before this House now. If the government is short of money, it is going to borrow the money and it does not matter whether it was program spending or whether it was to pay interest on the public debt. The fact is the money has to be borrowed from somewhere. This government, with its profligate ways, has run up the national debt in this

The Budget
country to heights unknown before, absolutely astronomical heights.
We sit here and listen to speeches from members on the Conservative side. It sounds as though each speech has been written by officials in the Department of Finance because they all beat the same drum, they all say the same thing over and over and it is silly nonsense. They cite all the deficit figures for the years up to 1984, and then they stop. Why do they stop? They stop because they are so ashamed and embarrassed of the disgraceful record of this government. I see the minister shaking his head. He knows I am right.
Anyway, to go back to the Minister of Supply and Services, he said that the Ontario government had grown excessively while the federal government had cut back. Well, there is a good reason why there has been growth in Toronto in the Ontario government. Ontario has a Liberal government. It has a government with a heart. It does not have a brick for a heart, or a heart of stone. It believes in helping the people that it was elected to serve. It cares for its people. Instead of throwing them out of work, it creates jobs and it is creating them in the Ontario civil service.
Second, Ontario had a budgetary surplus this year. The ministers forget that. This was not a case of a mismanaged economy like this one. The Ontario government generated a surplus this year because it has managed its affairs so prudently. That is the result.
Here we have a record deficit of $30 billion for the fourth year in a row under the Conservatives. It was higher before that. Yet they have predicted $28 billion for four years. They have been wrong every time and the minister will be wrong again this year. Watch it. He will be wrong again, he will be low, and he will be wrong next year.
In 1985 he told us that the deficit this year would be $15 billion. What is it? Double that. How wrong can you be? The man must be mad or something. He has no comprehension of figures. The Treasurer of Ontario knows what he is talking about. He predicted a small deficit. He got a small surplus. That is what you call prudent fiscal management and I wish that the Minister
of Finance would go to Toronto and take some lessons. He needs them.
I want to point out that the surplus of the Ontario government is not on operations; it is over all. It is after paying the interest on the debt of the province of Ontario. This government keeps talking about its operating surplus. That is hogwash. This government has a huge debt, $30 billion of deficit this year, and it keeps talking about an operating surplus. What a lot of poppycock. You do not hear that sort of talk in the Ontario legislature. When they talk about a surplus they talk about a surplus, and they mean surplus, they do not mean this phoney operating surplus that this Minister of Finance spouts about in his budget speeches and illustrates with tables and graphs.
Ontario has a treasurer who knows what he is doing and I suggest that the facts indicate clearly that this government has a Minister of Finance who does not have a clue what he is doing. He is wrong on every prediction he makes. He is wrong on every estimate he has made in every single budget he has introduced. All his figures on interest have been wrong. All his figures on the national debt in every year have been incorrect and every projection he has made for every other year has been wrong.


Dorothy I. Dobbie: You keep saying the figures are wrong. What are the figures?


Peter Andrew Stewart Milliken: I will tell you again. If the member had been here two minutes ago she would have heard me say what the figures were. In 1985 this same Minister of Finance predicted that the national deficit for this year would be $15 billion. It is $30 billion, double what he predicted. What a disaster. I wish the hon. member had been here for the preceding four years to try to help him out. She might have straightened him out, but it might have been the wrong way.
The government of Ontario has been saddled with additional programs because of the cutbacks that have been announced by this government over five years of mismanagement so it has had to hire more people to do the work. This government says it has laid off 11,000 civil servants. The government of Ontario has hired 7,000, according to the Minister of Supply and Services. This government has cut back services to its citizens; the province of Ontario has enhanced its services.
March 6, 1990

What a comparison the Minister of Supply and Services dares to make. And he is a member from Ontario. He must be delighted he lives in a province that is so well managed compared with the way the Government of Canada is mismanaged by the Minister of Finance.


The Acting Speaker (Mr. Paproski):: I regret I have to interrupt the hon. member.
It being 5.45 p.m., it is my duty, pursuant to Standing Order 84(5), to interrupt the proceedings and put forthwith every question necessary to dispose of the amendment now before the House.
The question is on the amendment. Is it the pleasure of the House to adopt the amendment?


Some hon. members:: Agreed.


Some hon. members:: No.


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


Some hon. members:: Yea.


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


Some hon. members:: Nay.


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


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


Mr. Speaker:: I declare the amendment lost.
It being 6.17 p.m., the House stands adjourned until tomorrow at 2 p.m., pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 6.17 p.m.
[Stage Direction]
Wednesday, March 7,1990