1990-02-23

Hon. Don Mazankowski (for the Minister of Regional Industrial Expansion) moved: that Bill C-56, an act to amend the Small Businesses Loans Act be read the second time and referred to a legislative committee.


Mr. Barry Moore (Parliamentary Secretary to Minister of State (Small Businesses and Tourism)):: Mr. Speaker, all members of this House are well aware of the central importance of small businesses to the economy. Only a few months ago, we tabled the first report on small business in Canada. This report drew attention to the vitality and significance of the small business sector in this country. The report also marked the government's strong commitment to the sector and our concern to help small business respond successfully to the challenges of tomorrow's world.
A thriving entrepreneurial sector is a mark of a dynamic economy and in Canada we have a thriving entrepreneurial sector.
We on this side of the House are proud of the government's contributions to create a favourable economic climate for private sector initiatives. Since 1984, more than 150 new businesses have been created every year. These businesses have been incredibly sound. In fact, over the last ten years, more than three quarters of all these new companies survived their crucial first year
of operation. Today, roughly 900,000 companies in Canada have fewer than 100 employees. This means that nearly 98 per cent of our companies are small businesses.

These businesses are job creators. Between 1978 and 1987 small businesses accounted for more than 80 per cent of all net new jobs created in Canada.

I would like to point out again that the growth of small businesses is at the heart of our government's regional development strategy. We firmly believe that local initiative has the best chance of becoming solidly established. The regional agencies like those in Western Canada, Northern Ontario, the Atlantic and the resource regions of Quebec adopt this philosophy.

Small business is also a significant platform for the economic take-off segments of our society which have often found roadblocks on other avenues to success and to profit.
Women, for example, own almost 22 per cent of all businesses with paid employees. That is up from 18 per cent at the beginning of this decade.
Young people and ethnic groups are also well represented in this sector. More than 100,000 Canadians between the ages of 15 and 24 own their own businesses. That is another incredible statistic.
Also significant is the amount of research and development undertaken by small businesses. In 1987, 67 per cent of the firms performing research and development in Canada had fewer than 50 employees and more than three-quarters had fewer than 100. This is a substantial increase since 1984 and of key importance to the wellbeing of the economy as a whole.
Such a link between the small business community and research and development is perhaps to be expected since small business people often show the same characteristics as those ready to get into technology development.

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They are creative, independent, spirited and ready to take risks.
One of the biggest hurdles which these risk takers have to face is that of obtaining capital, especially start-up capital. That is why we are proposing in Bill C-56 an extension to the Small Businesses Loans Act. The Small Businesses Loans Act is a popular federal initiative which is invaluable in encouraging the start-up and growth of small businesses in Canada.

Being from an outlying region myself, I am in a good position to tell you how important this tool is for regional development.

The program facilitates loans for the purchase of fixed assets for small businesses with annual revenues of less than $2 million.
These loans can be up to $100,000, though the average loan in 1988-89 was about $38,000.
The government's role is to provide lenders with a guarantee for reimbursement of 85 per cent of any losses incurred on eligible loans. The private sector's role is to assess the risks and deliver the loans.
This is a division of the responsibilities which we believe leaves business free to do its job of looking after business while the government sticks to its role as a facilitator, enabling the private sector to go for growth opportunities.

In 1988-89, about 18,000 companies benefited from loans made under the Small Business Loans Act. If these businesses were located side by side, they would line both sides of a street extending from Toronto to Barrie, Ontario.
About 40 per cent of these loans were granted to help new businesses start up. If these loans had not been given, it is likely that these companies could not have begun operations. That makes this law an essential tool for maintaining the growth and development of entrepreneurship in our country.

The bill asks for a three-year extension to this highly successful program and provides for a loan ceiling of $2 billion for the total amount of loans registered.
The three-year extension starts March 31, 1990 when the existing act expires.
During the course of the extension we will be continuing our examination of the program to ensure that it meets the needs of small businesses.
We will be looking seriously at ways in which the program could be enhanced by possibly modifying terms and conditions and eligibility requirements. Because of the critical importance of this program, the Minister of State for Small Businesses and Tourism will be taking a personal interest in this review.
I ask the House through you, Madam Speaker, to give this bill urgent consideration. Lenders and their small business clients must know well in advance of the March 31 deadline that the program will continue.
It is a popular program. It works. It contributes to the good health and potential of Canadian entrepreneurs.


Mr. Alfonso Gagliano (Saint-Leonard):: Madam Speaker, I welcome this opportunity to take part in this debate on a bill that will amend the Small Businesses Loans Act by extending it for another three years, until March 31, 1993. First of all, Madam Speaker, I would like to say we intend to co-operate with the government so that Canada's small businesses will know that on April 1, they will still have the use of this development tool they so badly need.
That being said, Madam Speaker, I would like to provide a little information on developments in this area during the past five years, and especially in this legislation, because some major changes were made in 1985.
Let me say, first of all, so that people will understand the importance of small business in Canada, that these businesses, all of which have fewer than 50 employees, created over 95 per cent of the jobs in this country in recent years, paid 25 per cent of all salaries, were responsible for about 8 per cent of the total value of Canada's exports and are responsible for 25 per cent of the Gross National Product.
To get back to our subject this morning, the Small Businesses Loans Act, the legislation, which has existed
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for years, is amended from time to time. Its purpose is mainly to help small businesses obtain medium-term loans to finance tangible assets such as land, commercial premises and tools.
Some major changes were made in April 1985 by the Conservative government. The definition of small businesses was amended to include all businesses whose estimated gross annual income did not exceed two million dollars.
Since 1985, an initial fee of 1 per cent of the loan amount may be charged. Before 1985, new businesses or entrepreneurs who qualified on the basis of their sales could borrow up to $100,000, and the loan, granted by the bank and guaranteed 100 per cent by the government, did not entail any charges. In 1985, the government imposed a fee of 1 per cent of the total loan amount, which was one more burden on small business, especially since most of these loans were used by new businesses as start-up funding, and charging them 1 per cent only add to their expenses. We pointed this out at the time.
There were other changes that we felt were also very substantial and to which we vigorously objected. Starting in 1985, the government would guarantee only 85 per cent of the loan amount, while the remaining 15 per cent became the bank's responsibility. We all know how banks operate in this country, Madam Speaker. The banks recovered this 15 per cent from the people who applied for the loans. I can assure you a number of my colleagues and I can name several instances in which constituents who tried to set up a small business were turned down by the bank because they had no credit rating and didn't have enough start-up capital, even if the project was a very good one, and all because the banks had to guarantee that 15 per cent.
This amendment, introduced in 1985, has deprived us of new, good small businesses that might have expanded to become medium-sized and even large businesses, creating jobs in this country.
Madam Speaker, I wanted to mention these facts, and today, the statistics prove we were right. When I look at reports on small business loan activities since 1985, if I look at the first year, the year ending on March 31, 1985-this was the year before the new amendment became effective-that year we had 34,744 loans total-
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ling $1,600,322,008. A year later, the year the new legislation came into force, the number of loans dropped to 23,588, totalling $737 million. In 1987, the number of loans declined further to 21,145, totalling $709,901. In 1988, according to my last report, we were down to 18,640 loans. It was the only program small businesses had, and all this happened because in 1985, the government wanted to reduce the guaranteed amount and charge small businesses a 1 per cent fee for these loans.
When we saw activity had declined 50 per cent, we told the government that created the problem that we felt hundreds of jobs had been lost which small businesses would otherwise have created, if they been able to benefit from the boost afforded by a small business loan.
Madam Speaker, loans to small business were not the only thing that the government cut; there is also the Federal Business Development Bank, which essentially provides, or this morning I should say used to provide, three types of services to business: loan services where it only serves companies that present at least letters of refusal-at least, that is what it should do, but I do not know if it actually does; investment services where it provides companies with share capital for a limited time or helps companies find investors; and management consulting, counseling and training services.
Last year, Madam Speaker, the government cut 50 per cent of the consulting budget and this was the only service that provided young companies with advice and information on good management and thus helped ensure the survival of small businesses in difficulty.
The loans to small businesses should go to small businesses and not to medium-sized ones. But yesterday, we learned that there would again be fairly large cuts in this area.
So we see that the scope of the Small Business Loans Act that we are considering this morning is being reduced and that the loans made to business by the Federal Business Development Bank are being reduced too.
Yesterday, we learned that $18,755,000 had been cut from the Federal Business Development Bank. I think there is something wrong with this government's approach because salary costs are going up by $0.7 million; that is, the civil servants are getting increases while the programs are being cut. We need to keep these pro-

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grams, Madam Speaker, and not necessarily increase the civil servants' salaries.
I should like to quote from the document entitled 1990-91 Main Estimates, Highlights by Ministry issued by the Treasury Board of Canada: The decreases are: $9.4 million deferred to 1991-92 and reclassified to non-budgetary for the venture capital activity which is for equity financing,-also an additional $10 million.
Last year, Madam Speaker, the govemement cut $13 million. This year, $18 million. There is hardly anything left. When we see that the number of loans to small businesses went down from 35,000 to only 18,000, we realize that we do not really have the tools. This government is getting rid of all the tools which are necessary to develop small business in Canada and create new jobs. The statistics clearly show that small businesses create jobs when there is a recession, an economic crisis.
This morning, Madam Speaker, I can give you an idea of the way this government abandoned this sector. It is not only the financing. I am sure all my colleagues will agree that this sector needs funds. If there is a sector in Canada where financing is inadequate, it is the small business sector.
When we think of what will happen to the small businesses following the implementation of the GST, as my colleague said earlier, we understand that there is not enough financing and that the small businesses will get even smaller. I think we can believe John Bullock who predicted in the pre-budget brief he submitted to the Minister of Finance (Mr. Wilson) on the GST that small businesses will be wiped out.
If I may quote from page 2 of the document submitted by Mr. John Bullock, President of the Canadian Federation of Independent Business:
The small groceiy stores and the establishments regrouping food
stores and restaurants will be especially affected and will experience
tremendous enforcement problems which will compel a great many
of them to close.
It's clear! He forsees that as soon as the GST is implemented, a great many comer stores and convenience stores will go bankrupt!
He explained, and I quote:
They will have to keep a register of purchases.
When the minister suggests accounting will be simple, that there will be cash flow improvements, he comes up with an accounting example that is out of this world, Madam Speaker, because it is not real. Here is what the Canadian Federation of Independent Business has to say:
-a purchase register will have to kept, referring to each invoice, in order to make a distinction between the sales tax levied by the province and that imposed by the Canadian government. The latter will extend no credit on that part of the purchase price made up of the provincial sales tax. An invoice-by-invoice computation will also have to be made for purchases of services that do not inlcude the GST, such as bank interest charges and insurance premiums.
In addition to varying rates and exemptions of the GST and the nine provincial sales tax systems, businessmen will be faced with different tax application methods, different bookkeeping systems, different formulae, different returns, different audits, different penalties and different types of tax-on-tax structures. This places an unfair burden on small businesses, but especially the 265,000 retailers and most of the 450,000 manufacturers, wholesalers and service firms involved in retail sales.
Madam Speaker, it is a burden on all small businesses in this country. That was not said by the Official Opposition but by the Canadian Federation of Independent Business, and I imagine it knows what it's talking about, since it represents thousands of small businesses.
The federation conducted a survey on the subject after the tax rate was reduced from 9 to 7 per cent. And what were the results of this survey? In the small business sector, opposition to the GST has become even stronger. The survey, carried out in January, 1990, covered a sample consisting of 1,372 members of the federation. Of this group, 68 per cent were opposed, a drop of about 10 per cent compared with the results of the Angus Reid survey. This response shows that small businesses are very much aware of the incredible problems they will face in 1991.
We have a situation that is very serious indeed. It is due too lack of funding and a lack of awareness. When he launched his tax reform. Madam Speaker, the Minister of Finance (Mr. Wilson) had said repeatedly in this House that he would propose a simple system. Here we have a system that is so complicated that even institutions representing small businesses-that small businesses themselves are talking about closing down! It discourages them from investing, and we all know the kind of sacrifices these people make to establish a family business. They work day and night, the whole family, husband, wife and children. And now we are going to
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expose them to this administrative nightmare and let them worry about whether yogurt or doughnuts will be taxable!
Madam Speaker, I think this government has completely abandoned small business. This morning, there were rumours that we might get a new Minister of State for Small Businesses and Tourism. He is not in the House this morning, but I hope that whoever is appointed Minister of State for Small Businesses and Tourism will defend that sector. We need someone in cabinet who speaks for this group, because the way things are going now, if interest rates keep rising and taxes as well, we are going to have a recession. The only sector that will be able to create new jobs in a recession is the small business sector. I hope the new minister will realize that.


Mr. Jack Whittaker (Okanagan-Similkameen-Merritt):: Madam Speaker, it is a pleasure to discuss today the changes which I am pleased the government has seen fit to extend to the Small Businesses Loans Act. The act has been beneficial even in the form that it is in to a number of small businesses. I suggest that perhaps it needs expanding. However I will talk about that later.
My friend in the Liberal Party has spoken about the need for a strong minister responsible for small businesses. I understand we still have after the shuffle the same minister for small businesses.
First, I would like to say that we in this party will assist, because we want to assist and we understand how important small business is, the government in ensuring the passage of this bill to committee as soon as possible. A number of people in my party have a great interest in small business and will be speaking on this bill this morning.
However, we can tell the government that we will not be holding this bill up. It has a limit; it must go through by March 31. We feel it is important that the guarantees of the government and its assistance to the banks proceed on schedule to ensure that small business knows and is able to plan for the future. We will be looking at the bill in committee and perhaps pushing a little bit, but will not hold the bill up unduly today.
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As I understand the bill does a number of things. First, it extends the period that the government will guarantee loans from April 1,1990 to March 31,1993. The principal amount of total loans registered will be set at $2 billion. For small business people looking in the aggregate as they may well understand is the total amount of loans the government will guarantee for the banks or for the lenders.
The bill also provides for a number of technical amendments to clarify a number of things. For example, the various costs which may be charged by a lender to a borrower and which are required to be prescribed in the regulations. It goes on with the manner in which the rate of interest is to be prescribed and changed from time to time, both prior and subsequent to the payment of a claim, and any maturity date to be revised for terms beyond the maximum set out in the act shall require the minister's prior written approval.
I want to put a plug in for the Scrutiny of Regulations Joint Standing Committee between the Senate and the House of Commons. Most people in this House are not aware that committee exists. The people of Canada are not aware that there is a committee which looks at all regulations. Most government departments and many laws in this country are governed by regulations of Orders in Council. All of those are scrutinized by the members and staff of the Scrutiny of Regulations Committee. They look at the possibility of whether they have overstepped their bounds or fallen short of what they are supposed to do.
A number of recommendations were made by the committee where there were variances in regulations and some of the things bureaucrats and departments were doing with respect to the Small Businesses Loans Act. This bill looks at some of those points and corrects what has been pointed out by the Scrutiny of Regulations Committee.
I compliment the government and this department for taking that initiative, and the Scrutiny of Regulations Committee for its tenacious pushing to ensure that the interests of the people of Canada are looked after.
As my friend has done, I would also like to use this opportunity to speak about the small business community within Canada and the importance of that community to all Canadians and to the economy of Canada, present and future. Some of the statistics show us that in the past 10 years since 1980 something like 70 per cent of all new jobs created in this country has been created by small business. That is a very significant factor. It shows, as the

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parliamentary secretary to the minister has pointed out, that we have already started shifting in this country to an emphasis on small business. More and more the small business community is becoming the backbone of Canada, as I am sure most people realize it has been in the past.
If we look at various studies we find that the small business community creates jobs for Canadians. It reinvests profits from small business back into Canada and the people of Canada. That is something that we as Canadians must strive for. We must ensure that the jobs we are creating are jobs created for Canadians, by Canadians; that the profits we make are sunk into the future of our country and our youth; and that we do not place a major emphasis in the future on large corporations, multinationals that pull their profits out of the regions or areas as they see fit.
If members opposite are looking upon that statement with a little scepticism, I would like to tell them a little story about their own Conservative government in the Northwest Territories. When we met with them in the finance committee, they discussed the future of the Northwest Territories and how the goods and services tax was going to affect the small business or the business community in the Northwest Territories.
What they told us was, yes, although the large business resource sector is a major portion of the Gross Domestic Product of the Northwest Territories, in fact it creates very few of the jobs. Only something like 20 per cent of all people employed work in the resource sector.
What they told us is that most of the profits, instead of going for development and exploration in the Northwest Territories, are being pulled out and used for development in other countries where they feel it is cheaper or easier to develop their resources.
I am using this as an example to show the propensity of multinational corporations, large corporations, to pull their profits out of the country rather than invest them back in. Small business does not do that. Small business I would suggest is the way of the future, and it continues to reinvest in the country.
We as members of the House of Commons and as legislators for the country have to consider our future in looking at assistance for the small business community. This bill is the first step and the first step only in moving toward where we want to be with respect to small business in Canada and the assistance we should give it.
I look at the little we did get in the Estimates and in the budget, and again I have to wonder about the government's commitment to small business. As my friend in the Liberal Party has pointed out, there were $13 million in cuts to management services in the Federal Business Development Bank last year, and in the Estimate we find $18.5 million in further cuts projected for this year. We do not know yet exactly where those cuts are going to come within the Federal Business Development Bank, but any cuts to that area are direct cuts at and to the small business community.
I shake my head and I think maybe the minister and those across should do the same. Where are we going if we continue to cut out programs for a community that is going to create employment for the future of Canada? What are we doing? Why are we doing it? It seems to me and to those members in my party that if we are to encourage employment and a reasonable economy for the future, we have to encourage those who create the jobs and reinvest in Canada. That is reinvestment in the small business community.
I know that the Canadian Federation of Independent Business has a number of things that it would like to see done for the future for small business, including perhaps better loan guarantees, not necessarily anything dealing with grants to small business. I think that grants have a place. I do not think it is something to be encouraged. Certainly I think that grants to large corporations can well be cut out. If we are going to consider the grant system, the emphasis of those grants should be on the small business community.
It appears again that it is the small business community as opposed to the medium sized business community where the emphasis should be placed, because a flourishing small business community means a flourishing economy and hope for the younger generation for the future.
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Let me turn to what I have seen, aside from the cuts to the Federal Business Development Bank, in the small business community and where this government appears to be going. It seems to be ignoring what I have just pointed out. Let us look at how it has hit the small business community and its policies on high interest rates. When I spoke to the Minister of State for Small Businesses and Tourism last spring, he asked me how we could help the small business community.
What the small business community would like is lower interest rates and a knowledge that those interest rates are locked in for a period of time so that it can budget properly for the future. As a small business person there is nothing worse than knowing you are tied to the prime rate and watching the prime rate climb as it is doing at the present and as it was doing in the early 1980s.
Small businesses dropped like dead flies. There were bankruptcies and receiverships when the interest rates climbed. In most cases when they are new and starting up they simply cannot stay viable. As the interest rates climb, more and more of their income and profits go into paying the interest rates on their operating loans and their capital loans. It is not good enough to say that we are guaranteeing you at 1 per cent above prime, because when prime climbs to 15 per cent, to 16 per cent, or to 17 per cent, it makes it an impossible burden for small business persons.
That is the difficulty in having your own business and running it, even with the knowledge that you can make it if you work hard and your family works hard. What about those forces over which the government has control? If interest rates are allowed to climb out of control, you are going to go down and end up as a small business person, with your family, on the dole or trying to get jobs in my area doing anything you can, in the farming community as a picker or whatever, in order to keep food on the table. That is not the way to go. We must have stability for those people to ensure that they are fairly treated.
Let's look at the government's policy on the goods and services tax. I cannot emphasize strongly enough that the goods and services tax is not a tax that is healthy for the small business community. There are no small business people who want the tax in spite of hearing people like Mr. Sabia and Mr. Dodge from the finance department say: "It is going to be simple. There is no problem with administering this tax."
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I would suggest that those people sit in an ivory tower. Have they ever been down slogging? Have they ever been down working as these small business people do until late at night and then have to do their books? There is a factor of inheritance in some jobs. Some people go through university and then straight off into the academic world or into government positions where they do not have to worry where that next pay cheque is coming from. The people in small business do. Any little extra that they have to pay out can directly and drastically affect the viability of that business.
The other thing that people who are in the upper echelons of the bureaucracy in the Department of Finance do not realize is that these small business people try to do their own book work because of the difficulty in viability of their businesses. With the goods and services tax they will have the nightmare that we heard about of compliance with all of the added steps they have to go through. To a person designing the system it does not cause any problems, but it does for the business person out there doing it. It causes massive problems. These business people lie awake at night worrying about what they are going to do and how they are going to make ends meet, how they are going to employ a bookkeeper, and the cost to them is horrendous.
This week I spoke to a small businesswoman in St. John's, Newfoundland. She is a manufacturer. She talked to me for three-quarters of an hour discussing some of the problems that were brought down on her not only as a result of the goods and services tax but as a result of some of the policies of the government as far as loans, as far as contracts to the small business community, and as far as the difficulty in dealing with banks in trying to get financing. She told me that there is something that they have not looked at in the goods and services tax or they have been ignoring, that is, the added financial burden to small business people.
For instance, if a small business people do business with the government, it is notoriously slow in paying its bills. It is not uncommon to run a 60-day or 90-day receivable. They have to carry the goods and services tax as a receivable. Until they get their money, it runs on their loans. If they do any type of business at all it means an added financial burden on them. It is unfair, I would suggest. It is shameful that the minister and his henchmen have not considered what this tax is going to do to the small business community.

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This woman also pointed out the difficulty in financing. It was interesting. I made a speech last spring on small business pointing out the difficulties that the small business community had in dealing with banks at the present time that do 85 per cent of their financing. I pointed out the difficulties over and above that which women have.
I received a letter from the vice-president of a major bank shortly thereafter pointing out that the policies were policies of equality. That surprised me, so this past year I spoke to a number of business people across Canada and discussed whether they as women ran into any difficulties with the banking community. I have not yet met one who has not had some type of difficulty with the major banks in requirements of collateral. In a number of cases their husbands had to co-sign for their loans. Why?
We know that women are moving more and more into the small business area successfully. As the parliamentary secretary has pointed out, 22 per cent of all businesses with paid employees are owned by women, and that is growing. Our statistics also show us that as women move into the business community they are more successful in those pursuits than are men who start up a new business. They have a much higher success rate, yet they are treated like second-class citizens when it comes to getting loans.
I say to that vice-president of that bank that he may pay lip service and he may point out studies, but the studies I have seen and the people with whom I have spoken indicate that although it is changing it is not changing fast enough.
We have to start treating youth, women and small minority groups equally. Because of the success that women have had in business, it is not good enough to pay lip service and simply say that we are doing everything and they are being treated equally. When we talk to Newfoundlanders and people in the Yukon, the Northwest Territories, northern Ontario, British Columbia and elsewhere across the country, we know that they are not being treated equally.
The small business community is required, unlike large corporations or large businesses, to put up more collateral. Even with the Small Businesses Loans Act guaranteeing 85 per cent of these loans, large banks still triple dip. They require personal guarantees, they require corporate guarantees, and they require collateral up to at least three times the amount of the loan. Often they require cross-guarantees of spouses. Yet these loans are guaranteed by the Small Businesses Loans Act up to 85 per cent.
This is where I would suggest the Federal Business Development Bank comes in. If properly managed and directed, it can be a definite advantage to the small business community as a one-stop shop for entrepreneurs, as a place where I as a business person could go to find out what I have to do to incorporate and investigate banking needs, accounting needs, and loan needs. The whole range should be dealt with in one shot and can be dealt with through the Federal Business Development Bank.
In addition, I would suggest that the Federal Business Development Bank could be used not as a lending institute of last resort but as a lending institute to ensure that small business people who are starting up and need capital at a reasonable rate to do so have a viable place to go. I suggest that we can do it if the will is there for the government to do it.
I would like to touch on farmers as a viable small business community before the hour runs out. We as legislators must recognize that farmers are a major small business thrust. We must look at assisting them as small business people in looking at the future of our country. More and more farmers are becoming sophisticated. They have all their books on computers, but like other small business people they need help in training to be able to run their businesses as businesses. The Federal Business Development Bank and the Farm Credit Corporation could have and should have a thrust in this area.
I simply want to encourage this government to pay attention to the small business community, the community of the past, the community of the future, and the community that we in the New Democratic Party say will be able to lead this country into a strong economic future for all Canada.
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The Acting Speaker (Mrs. Champagne):: It being eleven o'clock, the House will now proceed to Statements by Members pursuant to Standing Order 31.


STATEMENTS PURSUANT TO S. O. 31
Mr. Marcel R. Tremblay (Quebec Est):: Madam Speaker, I would like to insist on the importance of capital for small businessmen, especially the daring Canadians who moved to set up a business and compete with the best. It is clear that small business people constantly view obtaining capital as one of the major challenges they must meet to start a business and make it grow. It is impossible to start a local newspaper, open a motel, even set up a micro-chip factory without financial resources. Therefore, if we want enterpreneurship to thrive in Canada-and who would wish otherwise because it is the prime mover of our economy-we must ensure that small businesses have access to sufficient funds to start up and grow.
Madam Speaker, this is indeed the goal of the Small Businesses Loans Act.


EXTERNAL AID
Mrs. Christine Stewart (Northumberland):: Madam Speaker, the lack of clear policy and the ease with which this government makes and breaks commitments, not only to Canadians but to the world community, is appalling.
In the House last May the Minister for External Relations said: "As soon as next year, we will increase aid funding which will grow by $800 million over the coming year, and that, Mr. Speaker, is a firm commitment."
Instead, in this year's budget the government is not only spending $116 million less on foreign aid than committed by the minister, but it is putting a 5 per cent cap on increases in official development assistance, so that over the next five years the government will be spending $558 million less onforeign aid. This is in
addition to the $1.8 billion reduction in last year's budget.
Canada's foreign aid is a key component of our foreign policy. These continued cuts undermine Canada's credibility and weaken our voice in international affairs.
This government does not seem to grasp the changing nature of the world. In an increasingly interdependent world, world peace cannot be achieved by ignoring the needs of the Third World. Foreign aid is not charity. If the government cannot be compassionate, then it should recognize that Third World poverty has a direct negative impact on Canada's economy, environment and global security.
If the minister understands the linkage of Canada's well-being to foreign aid, why did this minister not vigorously defend the best interests of her program and department? Why do we hear from her only a weak justification for short-sighted cuts?


INCREASED PRESENCE OF WOMEN IN ENGINEERING
Mrs. Suzanne Duplessis (Parliamentary Secretary to Minister of State (Science and Technology)):: Madam Speaker, yesterday I accompanied the Minister of Science and Technology and the Member for Outremont to the polytechnic school to present engineering students with Canada Scholarships. I took this opportunity to let the public know about the private sector project supported by the Minister of Science and Technology and the Minister of Employment and Immigration, whose purpose is to increase the number of women in engineering.
This project will focus on: the supply of and demand for engineers and the importance of women for supply; the prejudices and challenges faced by women at every level of training and in the workplace; attitudes and practices of peers and institutions affecting women engineers; obstacles, in particular at the school level, blocking women's access to that profession.
This program will be headed by four organizations: the Canadian Council of Professional Engineers, the Association of Universities and Colleges of Canada, the Canadian Manufacturers' Association and the Association of Consulting Engineers of Canada. Representatives of women engineers associations, engineering students, university professors, engineering faculty deans and

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colleges will sit on the 15 member adjustment steering committee that will manage the 18 month project. In addition, the private sector will be represented by the SNC Group, Noranda and General Electric.
An important conference will be held in the spring of 1991 to consider the preliminary findings. The final report and action plans will be made public before the end of 1991.


CHILD CARE
Ms. Dawn Black (New Westminster-Burnaby):: Madam Speaker, on the first page of his budget the Minister of Finance said:
We have a responsibility to our children and grandchildren, lb
build for them, not to borrow from them.
The government responds to a child care crisis by making promises it never keeps. The Conservative government answers the serious and desperate need for child care by slapping on spending limits and by cutting child care programs.
In British Columbia there are 300,000 children in desperate need of child care services and only 20,000 licensed spaces. These children may be going unsupervised. They could be in the hands of unqualified people. The government has proven again and again that it has no concern for children.
The Child Care Initiatives Fund has been axed in this budget by $1.75 million. If the Minister of Finance really believes that cutting child care is building for our children and our grandchildren, he is sadly incompetent. He should have been cut in the cabinet shuffle this morning.


THE ECONOMY
Mr. Ken Hughes (Macleod):: Madam Speaker, if there has been one consistent message from the people of Macleod during the past year it is that we must reduce the deficit. We must control government spending and we, as Canadians, must keep the economy from getting into the kind of inflation we faced in the early eighties under the Liberal government.
Only when we make progress on these fronts can we expect interest rates to fall to more reasonable levels.
I have expressed these concerns here in the House and directly to the Minister of Finance. The budget this week proves that the minister is listening to the people of Macleod and to other Canadians.
In this budget there are no new taxes. Yet there is a reduction in the deficit, in spite of higher than expected interest rates which increased interest costs for the government.
Albertans are prepared to tighten their belts along with all Canadians. None of us like having to pay the bills, particularly that crowd over there, but we all know that if we don't pay our mortgage then we don't have control over our own house.
The people of Macleod support the direction of this budget.


The Acting Speaker (Mrs. Champagne):: I am sorry to interrupt the hon. member but his time has expired.


ESTABLISHED PROGRAMS FINANCING
Mr. George Proud (Hillsborough):: Madam Speaker, given the budget cutbacks in Established Programs Financing, Prince Edward Island will lose $4.5 million this year, money that is needed for quality health care and post-secondary education.
The P.E.I. government has said that it does not consider deficit financing to be an option, so Islanders could be facing increased provincial taxes.
The budget papers state that for two years EPF transfers will grow with the population increase of each province, but that there will be no thaw in the EPF freeze.
In case the government has not noticed, businesses and bases are closing all over Atlantic Canada. At best, the population of Prince Edward Island is stagnant. At worst, we will see a continued erosion.
Prince Edward Islanders asked the minister to end the freeze on Established Programs Financing. Islanders deserve the same quality of health care and education as that enjoyed by other Canadians.

n
:
February 23, 1990


TRANSPORT
Mr. Jean-Pierre Blackburn (Jonquiere):: Madam Speaker, I have good news today for the Canadian people. Hon. Benoit Bouchard has just been appointed to the senior Department of Industry, Science and Technology. His skills and ability will become an asset for regional development at a time when the disparities between the regions need to be alleviated. But if this appointment is good news for many, the fact remains that the people of the Saguenay-Lac-Saint-Jean area have not benefited fully from his mandate as Minister of Transport.
There was so much foot-dragging on the part of the Quebec Government that a stretch hardly three-kilometre long of the Alma-La Baie Highway has been completed over the past six years. But I give people fair warning that the Conservative representatives of the region will not give up so easily. There are $11 million to be saved by March 31, 1991, and I am willing to constantly pester the Quebec Government to make sure that our region does not lose this money.


FORESTRY
Mr. Brian L. Gardiner (Prince George-Bulkley Valley):: Madam Speaker, this government has failed completely to bring forward its environmental program. Now it has given up on federal-provincial forest agreements as the way to ensure that our forests are replanted.
Agreements with Ontario, Manitoba, Saskatchewan and Alberta have not been signed since they expired a year ago. In B.C.'s case, this government has sold out Polar 8, our softwood lumber and our fish. Now it has sold out our forest community by delaying the signing of a new forest agreement in B.C.
At the same time as the department is being proclaimed, its budget is being slashed and agreements remain unfunded.
The time has come to put an end to the Tory shell game. The minister should get on with it and sign new agreements now.


THE BUDGET
Mr. Felix Holtmann (Portage-Interlake):: Madam Speaker, our government has a blueprint for economic recovery that must be followed despite the outrageous screams of opposition members who in five years and two elections have offered no solutions, no goals, no visions, no direction, and no leadership to the Canadian public.
Our finance minister stated,"this government will continue to do not what is easy or popular for itself, but what is right for the country".
The opposition is prepared to buy its popularity with taxpayers' dollars, as was the legacy of 22 years of Liberal-New Democratic Party governments of the past. What a shameful demonstration of the legacy of that former administration.


SCIENCE AND TECHNOLOGY
Mr. John Manley (Ottawa South):: Madam Speaker, once again in this week's budget the government has revealed its true colours when it comes to science and technology. Thirty-nine million dollars is cut from planned science programs at a time when Canada desperately needs to be increasing science-based innovation to assure our economic strength in the future.
Instead of wasting millions of dollars on propaganda, the implementation of the GST, and the moving of existing facilities and jobs in science out of the national capital, the government should be increasing its commitment to the development of environmental technologies, alternative energy sources and increased base budgets for the research granting councils.
Canada's relatively high growth in relation to other OECD countries belies our economic weakness. The more important measure of our relative economic health is our rate of productivity growth in which we are lagging far behind.
Science, engineering and technology and post-secondary education should not be seen to be expenditure items for government cutbacks. These are necessary investments to secure Canada's future.

For this Prime Minister, promises are cheap. But his real commitment to science and technology is non-existent.


FORESTRY
Mr. Ken James (Sarnia-Lambton):: Madam Speaker, who said the government's budget wasn't green? This year it was printed on environmentally friendly paper. Thirty per cent less pulp is needed to manufacture this new paper, which means that 34 per cent fewer logs are used and more trees are left standing. Twenty-two and one-half tons of paper were actually saved.
This solution is even better than recycling, which is commendable but which requires chemicals in order to turn paper into pulp again.
However, this move is not just environmentally friendly. It is also cost effective. The new stock is 20 per cent less expensive than the old. There are also savings in mailings and bulk shipment costs since the documents weigh 30 per cent less.
These days call for restraint and respect for our environment. Michael Wilson and his department deserve kudos for achieving both.


THE CABINET
Mr. Don Boudria (Glengarry-Prescott-Russell):: Madam Speaker, the Prime Minister as leader of Canada's marginal party, and enjoying the support of 19 per cent of Canadians, has now decided to give his government a face lift. As all cosmetic surgery, this one is only skin deep.
Harvie, the chair stormer, is now going to be the House Leader. Doug and the slug will be Minister of Transport. Benny and the jet will be the minister of industry; and Tom the fish will flounder elsewhere.
One change is missing from all this. The shuffler should have been the shufflee.


THE BUDGET
Mrs. Edna Anderson (Simcoe Centre):: Madam Speaker, in 1984-85 the operating balance was in deficit. Ongoing program expenditures were about $16 billion higher than ongoing revenues.
Today in 1990, our operating surplus increases from $8.9 billion in 1989-90 to $14.7 billion for 1991-92.
Mr. Wilson's 1990 budget inspires confidence in Canada's future. This expenditure control plan will put the deficit back on a downward track. It will free up domestic savings to help finance needed investment, diminish our reliance on foreign savings and reduce the burden of the debt for future generations.
The stage has been well set by the Hon. Michael Wilson for sustainable economic growth and a strengthened economy.


REGIONAL DISPARITY
Mr. Ray Funk (Prince Albert-Churchill River):: Madam Speaker, northern Canadians are used to cold weather but they are getting sick and tired of being left out in the cold by this government.
Northern communities already face unemployment as high as 85 per cent, astronomical living costs and services which should embarrass southern Canadians. But rather than recognize these special needs, this government clobbered northerners in the recent budget.
The elimination of the Exploration Incentives Program will stifle the mining industry.
Cuts to CMHC will make a disgraceful housing situation even worse.
Cuts to the native communications system will isolate northern Canadians even more.
The cap on IN AC funding will halt economic development in Indian communities.
Cuts and transfer payments will mean that second-class status in health and education will continue.
Therefore I call on the government to reverse these disastrous cuts, to at least retain the northern tax
February 23, 1990

benefits for northern Canadians and, most of all, to quit picking on those Canadians who are least able to fight back.


MINISTER OF FISHERIES AND OCEANS
Hon. Roger C. Simmons (Burin -St. George's):: Madam Speaker, I want to be among the first to congratulate the new Minister of Fisheries and Oceans on behalf of the plant workers and fishermen in Atlantic Canada, and to welcome him to what is going to be a very difficult job.
For a brief period I was one of his critics in his former capacity in Consumer and Corporate Affairs. I quickly came to respect his grasp of issues and admire his capacity to be the advocate for those issues.
He comes to the fisheries portfolio at a very difficult time, a time of great crisis. I believe he has what has been sorely missing from that portfolio-an ability to have an understanding of the issue and to be a strong voice for those issues in Cabinet.
His job is going to be all the more difficult because the Cabinet has overlooked the problem completely by leaving it out of the federal budget altogether.
The crisis can be solved with his leadership. He is going to have to do something in terms of a compensation program for fishermen. He is going to need a strong voice to advocate that Cabinet gets tough with the foreigners, kick them out of our waters so our people can be the beneficiaries of our resources.



ORAL QUESTION PERIOD


Hon. Herb Gray (Leader of the Opposition):: Madam Speaker, I have a question for the Minister of Finance. I might say that many Canadians will be surprised and somewhat disappointed after his budget last Tuesday to see him still in his place.


Some hon. members:: Oh, oh!


Herbert Eser (Herb) Gray: In his budget the minister announced cuts of $7.3 billion in payments to the
Oral Questions
provinces for health care and education. The minister has given no indication that he has even bothered to consult with the provinces on the impact these reductions will have on these essential national programs.
When the minister sat on this side of the House in 1982 he called for conferences by the government of the day with the provinces to establish national objectives. In so doing he said that this has to be done "before we cut spending and before we cause closures of hospitals and cutbacks in post-secondary education". That is what the minister said.
Yet his budget will likely take us back to the bad old days of user fees and extra billing, attacks on the weak, the elderly and the sick.
Again, in this House in 1982, the minister said: "Let us not make hospitals, universities and colleges a battleground between the federal government and the provincial governments". That is what the minister said. I ask him: Why is not now taking his own advice?


Hon. Michael Wilson (Minister of Finance):: Madam Speaker, first, may I say I do appreciate very much the gracious good wishes of the Leader of the Opposition. It is what I would expect from him.
The hon. member has raised the question of the transfers to provinces. As I have said in this House before, we are not asking the provinces to make a large adjustment. In the first year, it is somewhere between one-half of 1 per cent, three-quarters of 1 per cent, and about 1-1/4 per cent in the second year. These are not major adjustments that are required of the provinces.
I would remind the hon. member that in 1977 the law was changed by the government of the day, a government which he supported, which removed the linkage between those transfers to post-secondary education and health care. It was done at the request of the provinces so that they could have the flexibility to spend them as they wished.
I think the hon. member would agree with me that in some cases the provinces have cut way back on the amount of post-secondary education. If you cut those same ratios, as we saw back in 1977, you would see that the federal government is supporting in some cases a very high proportion of post-secondary education.

February 23, 1990
Oral Questions


Herbert Eser (Herb) Gray: Madam Speaker, the minister should know and should remember that Canadians are entitled to equal access to high quality medical care, no matter where they live in this country.
The minister should know that the cuts in payments to the provinces for health care will undermine the principles of the Canada Health Act, an act passed by this House to prevent the erosion of our national health care system, an act which was supported by the minister's party.
The minister is risking a return to user fees and extra billing. Why is the minister not listening to the provincial governments who are saying that the minister is responsible for the mismanagement of our national economy. They are saying to him: "Physician, health thyself".


Michael Holcombe Wilson: Madam Speaker, the Leader of the Opposition is getting very poetic today. He should also look at this from the perspective of the amount of money that we are transferring to the provinces. Some $34 billion will be transferred to the provinces this coming year. That will rise at a rate of 3 per cent over-all for the provinces. That 3 per cent is the same increase in federal government program spending. We are not asking the provinces to do anything more than we are doing for ourselves for our own spending.
The Leader of the Opposition raises the question of the Canada Health Act. That received all-party support in this House. The position of this party has not changed since then. I do not know why he puts that red herring on the table.


Herbert Eser (Herb) Gray: Madam Speaker, here is what Marc-Yvan Cote, the Quebec Minister of Health and Social Services, thinks of the Minister of Finance and his Budget, and I quote:
When Michael Wilson claims that his carelessness will not affect
health services in Quebec, he sounds more like a guy living on Bay
Street than in Quebec.
Madam Speaker, why does the Minister refuse to admit that Marc-Yvan Cote is right when he says that this Budget will have a devastating impact on health services both in Quebec and the rest of Canada?


Michael Holcombe Wilson: Madam Speaker, the Leader of the Opposition can pull quotes out of the air. I can also pull quotes out of the air, quotes that have been made by people in recent days saying that what we are asking of the provinces is fair.


Herbert Eser (Herb) Gray: You don't care what Quebec thinks.


Michael Holcombe Wilson: The hon. member says I don't care. I do care. That is why I am so concerned about this particular problem.
I can go back to things the hon. member said in 1979 when he was sitting in that chair over there saying: "Why does the government have such a fixation, a preoccupation with the deficit?"
I will tell you why we have that fixation, that preoccupation. It is because in the next five years under the Liberal government the deficit and the debt got totally out of control. They left us with the mess we have today.
I can see that the Leader of the Opposition is still laughing. He still does not understand the problem of the debt, the problem of the high deficit. He still has his head in the sand.


FISHERIES
Hon. Lloyd Axworthy (Winnipeg South Centre):: Madam Speaker, I have a mystery question for the Deputy Prime Minister.
I want to ask why this government does so little to protect the Canadian fishing industry.
Yesterday we had the Minister for International Trade saying that they had no choice but to accept the west coast fishing decision. Yet we know that the Americans have passed their own legislation called the Magnusson act which gives extensive protection to their processing industry. However, this government has not done the same. It has not introduced legislation. It has not challenged the American law. It has no plans to help the west coast fishing industry.
The mystery question to the Deputy Prime Minister is this. Why is this government always sacrificing Canadian interests on the altar of free trade?
February 23, 1990


Right Hon. Joe Clark (Secretary of State for External Affairs):: Madam Speaker, there is no mystery as to why the hon. member put that question. He put the question not out of any interest for the fishermen of the west or east coast. He put that question because he is driven by a fixation with the free trade agreement and driven by an animosity against the United States. That is simply not an effective way to conduct policy in the country.
In effect, what we have done with the decision that was announced in Vancouver yesterday by my colleague, the Minister for International Trade, is to take steps that guarantee our capacity to apply Canadian conservation measures.
If he knows anything about the problems that the Canadian fishery faces, particularly now and acutely in Atlantic Canada, it is that we have to be effective on conservation measures. The measures that were announced by the Government of Canada yesterday protect the interests of Canada, protect the interests of Canadian fishermen by ensuring that our conservation regimes will stay in place.


Lloyd Axworthy: Madam Speaker, the problem is that this poor, benighted minister still does not understand what it means to protect the interests of Canadians.
In saying that, I want to ask him about his great claim about conservation. The President of the B.C. Fisheries Council, Mr. Hunter, has pointed out that the decision the government has acquiesced to will create exactly the same problems on the west coast that the east coast fisheries now has-dwindling stocks, lack of data and giving away the rights of 25 per cent of the fishing stock to the Americans which we are now fighting against the Europeans for doing.
How can this government reconcile the fact that we are telling the Europeans that they do not have rights on the east coast when we have given exactly the same rights on the west coast to the Americans? Does this government not understand that it is putting the fishing industry on both coasts in jeopardy now?


Charles Joseph Clark: Mr. Speaker, I cannot verify the quote the hon. member put on the record. If the person he cited said that, he too is wrong.
Oral Questions
Let me come to the point that the hon. member was trying to make yesterday about an export tax. In his fixation with the free trade agreement and in his determination to be guided in everything by hostility towards the United States, he has focused upon the question of the export tax.
If the man were honest, if the country is interested in an honest debate about the instruments that are available to Canada, the member would admit that we have used an export tax once on softwood. It did not work. It is device that is so ineffective, it has not been used for decades by the government of which he was a part, or by this government.
Indeed, he also knows that if there were to be introduced an export tax in this area of the magnitude that would be effective to do the job, that would break the rules of GATT. He understands that.


Lloyd Axworthy: You are so
stupid, Joe, it is unbelievable. You don't know what GATT means.


THE BUDGET
Dawn Black: Madam Speaker, this government said yesterday that deficit reduction comes first, that the deficit comes first before the women of Canada.
The deficit does not come first when it comes to giving $161 million to the government's friends at Boeing.
The deficit does not come first when it comes to spending $14 million advertising the GST, a tax that no one wants.
The deficit does not come first when it comes to giving $114 million more to the armed forces in Europe. But the deficit does come first before the women of Canada.
Could the Deputy Prime Minister explain why CSIS got an increase of $33 million, yet programs to battered women have been cut? Could the Deputy Prime Minister explain why the boys can have their toys in the military while services to women are axed?


Hon. Gerry Weiner (Secretary of State of Canada and Minister of State (Multiculturalism and Citizenship)):: Madam Speaker, no battered women's program, no women in violence will be affected at all. What has been

February 23, 1990
Oral Questions
taking place to the women of this nation is a crime against humanity. We will continue to fight that vigorously wherever it is found.
We have been bringing forward additional programs for women and against violence, some $40 million from the minister responsible at that time for a very active program.
We have other programming that is very effective for immigrant and visible minority women and for disabled women.
We have a very strong commitment and an excellent women's program. We will continue to be very supportive.


Dawn Black: Madam Speaker, my supplementary question is for the Minister of Finance.
In his budget speech on Tbesday the Minister of Finance said:
We have a responsibility to our children and grandchildren.
The finance minister, if he really feels he has a responsibility for Canada's children, could he please explain why these children have been cut back for support for child care under the Canada Assistance Plan?
Will the minister come to my province? Will he come to British Columbia and explain to the more than
300,000	children in B.C., who cannot get basic child care services, why he has cut programs to the women and to the children of Canada?


Michael Holcombe Wilson: Madam Speaker, there is distortion there of the facts. The Canada Assistance Program for the province of British Columbia will be limited to a growth, an increase of 5 per cent.
If B.C. wants to spend more than a 5 per cent increase in any of those programs, we are asking them because of the stronger financial position that they are in to finance that increase over a 5 per cent growth rate. This is for a two-year period only to allow us to get over this hurdle of the deficit and the debt problem, after which time we will be reverting to the program as it stands now.


Mr. Robert E. Skelly (Comox-Alberni):: Madam Speaker, I have a supplementary question for the Secretary of State.
In the lead up to the budget, government leaks implied that most of the cuts were going to take place in concessions to business and in defence, the so-called defence dividend.
In fact, the cuts have hit native groups, women's groups and others who are least responsible for the deficit.
Will the minister explain why those groups, such as women's groups and native groups who have expressed the most concern about such things as the free trade act, the goods and services tax and injustice to women and Indians, are receiving the greatest burden of the most brutal cuts in his department, while those who were not such a thorn in the side to Conservative ideology are receiving no cuts at all?


Gérard (Gerry) Weiner: Madam Speaker, when that group across the way was in government, $12 million was the women's program for that five-year period.


Robert Evans Skelly: It is your responsibility. Answer the question.


Gérard (Gerry) Weiner: In this current mandate we will be getting and projecting over $48 million. That is quadruple. That is more, not less. Every single program that we are involved in has seen increased growth, increased strength and increased vitality, and we will continue to work actively with those programs across the country.


Mr. Rey Pagtakhan (Winnipeg North):: Madam Speaker, my question is for the Minister of Finance.
In last year's throne speech the Prime Minister said: "This government remains committed to a national child care program." And recognized that "the increasing participation of women in the workforce underlines the need for initiatives that promote equality of opportunity in Canada's economic life."
Tuesday's budget not only cancelled some vital programs and services for women but also failed to introduce a national child care program. When will this government recognize that a national day care program is a priority initiative for equality of opportunity for women and quality of life for children?
February 23, 1990


Michael Holcombe Wilson: Madam Speaker, the commitment of this government has not changed as a result of this budget.
In last year's budget I made it quite clear, speaking on behalf of the government, that we would bring in a child care program within this mandate. That commitment stands.


Rey D. Pagtakhan: Madam Speaker, a litany of commitments, a litany of promises does not create a rosary of sacred trust.
The cap to the Canadian Assistance Plan will leave thousands of Canadian children without the day care that they so badly need, as most provinces have said.
In last year's budget, this government increased child tax credits to wealthy families and this year's budget breaks the backbone of the day care programs for low and middle income families.
When will this government show that it is truly committed to a national child care program and introduce this program, and not wait until our children are no longer with us?


Michael Holcombe Wilson: Madam Speaker, I am not quite sure I heard the hon. member correctly. There was no increase in the child tax credit to upper income families in the last budget. We have brought in a child tax credit increase in 1988 for those families who are low income families and have children under six years of age. That is still in place. It has not been changed by last year's budget or this year's budget.
Let me underscore the comment that I made just a minute ago. This government is committed to child care. The changes in the budget this week has not changed the child care element of the Canadian Assistance Plan in seven provinces, but we are limiting our spending to a 5 per cent growth rate for the three wealthiest provinces in the country. We are saying to them, if you want to increase your spending by more than 5 per cent, we will ask you to finance that for the next couple of years because of the difficult deficit situation that we have.


Ms. Ethel Blondin (Western Arctic):: Madam Speaker, Canadians were shocked when the Minister of Finance presented his budget on February 20 that the aboriginal people were at the top of his hit list. The minister
Oral Questions
accused me of exaggeration when I asked about the $100 million cut to Indian and Northern Affairs. It does not sound like an exaggeration to me. There was also a $24 million cut in Secretary of State.
I ask the Minister of Finance whether he has eliminated the Native Communications Program and all the native newspapers? Has he cut the Northern Native Access Broadcast Program by 16 per cent? If so, how can he justify this heartless move? The native people of Canada want to know. Will he answer this directly and not be evasive?


Michael Holcombe Wilson: Madam Speaker, I would refer the hon. member, if she would care to listen, to page 76 of the budget statement where it says that expenditures for Indian and Inuit programs for health, education, social assistance and comprehensive claim programs will not be constrained. Other grants and contributions in the Indian and Inuit Affairs Program will be limited to an annual-


Ethel Dorothy Blondin-Andrew: You can't touch those moneys. You wouldn't dare.


Michael Holcombe Wilson: Well, Madam Speaker, if the hon. member asks a question, surely she must be interested in the answer to the question. Let me repeat.
Other grants and contributions in the Indian and Inuit Affairs
program, however, will be limited to annual growth in the range of 5
per cent-
That I think is a fair request. It is part of the over-all program of controlling government spending so that we can get the deficit down, get interest rates down and have a healthier economy.


Ethel Dorothy Blondin-Andrew: Madam Speaker, I have once again not received the answer to my question.
My supplementary is to the same minister. There is much dissension and uneasiness across the country among the many Canadians who support and depend on the voice of native newspapers and radio broadcast programs. It was, after all, the Micmac news that brought out the Donald Marshall case.
Why is the minister sabotaging the success of these programs? Is it an attempt to suppress the truth, the power of the word? Will he restore these funds immediately, if he is going to demonstrate the commitment of this government to aboriginal people's livelihood and rights?

February 23, 1990
Oral Questions


Gérard (Gerry) Weiner: Madam Speaker, this Prime Minister and this government have made race relations our most important initiative and priority. We demand full and equal participation and full access for each one of our citizens.
We have brought forward increased funding for race relations, increased funding for community support and we are developing initiatives to deal with the very concerns that the member is addressing. From coast to coast we are going to be very pro-active in helping all Canadians develop full and equal opportunities.


Mr. Lome Nystrom (Yorkton-Melville):: Madam Speaker, my question is to the Minister of Finance.
The Minister of Finance will be aware now, without a doubt, that there are more and more people questioning the basic credibility and the assumptions underlying his entire budget.
We know that the projections were all done before the end of January. Since that time interest rates in the country have gone up by one percentage point. There is pressure now for higher interest rates in Japan and western Europe.
I want to know now whether or not the minister will admit that many of the numbers in his budget are wrong, that his projections are wrong, that the deficit is going to be well over $30 billion in the next fiscal year, and that the interest rates will not come down to 11 per cent? Will he admit that those projections are wrong? Will he tell the Canadian people what is really going to happen in the next year.


Michael Holcombe Wilson: Madam Speaker, there is a little deja vu in this question. It seems to me that in 1984, 1985 and 1986, at practically every budget, every time we have brought out projections with a very limited number of exceptions, hon. members have said that this is going to cost 50,000 jobs, 100,000 jobs, or
200,000	jobs, and that the sky is going to fall as a result of this budget.
A study was done in January that supports this. The projections that have been made by the Department of Finance officials have been very close to the mark and closer to the mark, I might say, than has been the case
with the consensus of private sector forecasters that we monitor.
I can give the hon. member further information and reasons why I think that our projections are accurate. I think these are reasonable projections. They are not out of line with the private sector forecasters.
When we stand in the House after the next budget, I will probably be saying exactly the same thing to the same member of Parliament.


Lorne Edmund Nystrom: Madam Speaker, last year the Minister of Finance predicted 10 per cent interest rates for this year. Some accuracy in terms of his projections!
I believe the figures he has given us in the budget are totally unrealistic. It is sheer incompetence on behalf of the Minister of Finance.
In light of what is happening now in Europe and Japan I wonder if the Minister of Finance, unless he is dreaming in Technicolor, can tell us how he is planning to bring down interest rates to a 1990 average of 11 per cent when today we are starting at over 13 per cent.
Can he explain that to the House? If he cannot, can he admit that he is wrong, that the deficit will be indeed over $30 billion, that interest rates will be much higher than 11 per cent, that the unemployment rate will be higher than he is predicting and that the growth rate will be slower?


Michael Holcombe Wilson: Madam Speaker, the hon. member said that projections were way out of line last year. Let me remind him that we were projecting a 12.0 per cent level of interest rates for the fiscal year 1989-1990. It will come in at 12.2 per cent, only .2 of 1 per cent out. That is not a bad projection.
The hon. member says that the projections are a way out of line. Our number is 11.1 per cent. The private sector is 11.0 per cent. I do not see where this is a way out of line relative to what the people in the private sector are saying themselves.
The hon. member asks how we are going to get interest rates down. I have told him many times how we are going to get interest rates down. We are going to work very hard to get inflation out of the system. As we get inflation out of the system, then we will be able to get

interest rates down. We expect that will happen during the course of this year.


WAYS AND MEANS
Mr. Brian O'Kurley (Elk Island):: Madam Speaker, my question is directed to the Minister of Finance. I refer to the notice of Ways and Means motion to amend the Income Thx Act as it affects the child tax credit.
The minister has indicated that this measure will allow
730.000	families to qualify for prepayment of the credit.
What exactly will be the effect of this change on a large Canadian family, and how many children will be affected?


Michael Holcombe Wilson: Madam Speaker, this provision provides for a more generous prepayment of the child tax credit for families with three children or more.
The effect of it will improve the fairness of the tax system and allow people with larger families to receive that prepayment in the month of November. It will also allow 70,000 additional families with a total of about
236.000	children to be eligible for the prepayment.
There is a cost factor in this. It will move the cost of this one year forward, so there is timing element here. The over-all cost to the government will not increase.


NAZARETH THERMAL GENERATING STATION
Hon. Andre Ouellet (Papineau - Saint-Michel):: Madam Speaker, I would like first of all to congratulate the Minister of Labour for his further appointment as Minister of State (Transport), and to ask him if he will contact immediately the Canadian National immediately to prevent them from making a sale. That crown corporation does want to sell its Nazareth thermal generating station in Montreal for a price that is absolutely, ridiculously unreasonable, a garage sale price.


Hon. Jean Corbeil (Minister of Labour and Minister of State (Transport)):: Madam Speaker, I thank the hon. member for his congratulations, which I am very pleased to accept. I will endeavour to keep working for the
Oral Questions
well-being, improved quality of life and prosperity of Montreal Island.
Since my duties as Minister of State (Transport) have just been added a few hours ago, I will look into the hon. member's question and will report to him as soon as the House reconvenes.


André Ouellet: Madam Speaker, I thank the minister but I would suggest he might want to act very quickly because this sale is to be made to Compagnie parisienne de chauffage urbain and I am told that the deal will be concluded in the next few hours.
I remind the minister that this Montreal heating plant has been posting annual profits in excess of $3 million. It seems to me there is something rather fishy in this sale, given the price.
Since the minister also handles the labour portfolio, I want to ask him whether he will give priority to this deal and what steps he will take to protect the employees who, after 20 years on the Canadian National payroll, will be summarily dismissed by Compagnie parisienne?


Jean Corbeil: Madam Speaker, I have to give a similar answer to the Hon. Member for Papineau- Saint-Michel. I will look into the terms of this deal in the next few days and endeavour to get back to him at the earliest opportunity.


Mr. John Harvard (Winnipeg St. Janies):: Madam Speaker, my question is for the Deputy Prime Minister. This government is committed to building a $100 million medical lab in Winnipeg. Until today, everything appeared to be in order. Now we get the news that the lab is going to be delayed until 1995. This is another betrayal of Manitoba. The west gets the shaft again. No one in the government is standing up for Manitoba. I think that the senior minister for Manitoba should do the honourable thing and resign.	*
My question for the Deputy Prime Minister is this: Is this delay just another way of saying that Winnipeg will never get the lab?

February 23, 1990
Oral Questions


Donald Frank Mazankowski: Madam Speaker, that assertion is simply not true. While I am not aware of all the details and the allegations which the hon. member has made, to my knowledge this project is still on track.
I suspect that there may have been some discussions with municipal officials. That may have delayed the project somewhat, but I can assure the hon. member that I will get back to him with full details. As far as I am concerned, there is no deliberate delay on the part of the government.


John Harvard: Madam Speaker, the Deputy Prime Minister's words are not going to ease the anger that we feel out there. I remind the Deputy Prime Minister of what fellow westerners are saying: "You play around with the bull and you're going to get the horn". I want to know the government's priorities.
There is money for the Prime Minister to spend millions to travel around the world, there is millions-


The Acting Speaker (Mrs. Champagne):: The hon. member will put his question, please.


John Harvard: Madam Speaker, there is no money for the medical lab, there is no money for-


The Acting Speaker (Mrs. Champagne):: I am sure there is a question. Is there a question for the hon. member to put to the minister?


John Harvard: Yes, there is a question. The municipal officials say there is no reason for delay. I want to know when the government is going to release the funds and get on with the job.


Donald Frank Mazankowski: Madam Speaker, I am certainly not going to be threatened by the rhetoric coming from the hon. member.
I would choose to deal with facts, not innuendo and rumour. As I indicated to the hon. member, I will try to ascertain the facts. I can assure him that I will report back to him very quickly.


PETRO-CANADA
Mr. Ross Harvey (Edmonton East):: Madam Speaker, in the absence of the Minister of State for Privatization and Regulatory Affairs, I have a question for whomever is in charge of the sell-out of Petro-Canada today.
Petro-Canada is expected to report assets for 1989 of something between $6.5 and $7 billion, this after spending at least $7.4 billion since 1976-this is in 1989 dollars-in assembling those assets.
The government now proposes to sell off the entire operation for something in the order of $4 billion, of which it might retain between $3 and $3.5 billion.
Even allowing for close to $2 billion in short and long term debt, doesn't the minister think it is a fundamentally bad deal for the people of Canada to sell their national energy company having a net worth of between $4.5 and $5 billion for $3.5 billion or less?


Michael Holcombe Wilson: Madam Speaker, that confused melange of figures has everybody in this House and anybody who is watching very confused, probably more confused than the member himself.


An hon. member:: Impossible.


Michael Holcombe Wilson: We believe the privatization of Petro-Canada will be in the interests of Petro-Canada, in the interests of the taxpayer, and in the interests of the country.
We believe the result of this will be a stronger Petro-Canada. It will have access to new moneys which it can invest in new operations in Canada to develop frontier resources and to new capital that is not available to it today. With the growth which will come from that we believe the result will be a much stronger Petro-Canada and a great help to this country.


Ross Harvey: Madam Speaker, let me try again. A company with a net worth of $4.5 billion to $5 billion is going to be sold for $3.5 billion or less.
Would the minister not agree with First Marathon Securities Limited oil analyst, a chap by the name of James Doak, that given average new equity issues for oil and gas companies from 1983 to 1988 were $2 billion a year in total, I quote Mr. Doak:
February 23, 1990

The privatization will compete with every other company trying to
tap the equity market.
He continued:
They probably won't be able to get a good price for the shares.


Michael Holcombe Wilson: Madam Speaker, about a billion dollars worth of equity issues were done in the month of January alone.
The Minister of State of Privatization and Regulatory Affairs has said that the sale of the shares of Petro-Can-ada will take place over a period of time, depending on market circumstances, depending on the attractiveness of the market to the company and to ourselves and of selling into that market.
I would say to the hon. member that his numbers are out of whack. I believe the book value is $4.3 billion and not the $4.5 billion to $5 billion that he is using. I would also say to him that I am glad he is sitting on that side of the House and not on this side when he is deciding what the shares of Petro-Canada are worth.


THE ECONOMY
Mr. Jim Peterson (Willowdale):: Madam Speaker, on May 23, 1985, the Minister of Finance unveiled the first of his two five-year plans for reducing the deficit. At that time he promised us that by this year our deficit would be $18 billion. It is $30.5 billion, a 69 per cent error in his projections.
The minister cannot blame previous governments. After all, he had the figures when he made this promise.
Second, he cannot blame the economy. In his own words it has been "extraordinary".
Will the minister at last admit that the deficit is a direct result of his own fiscal mismanagement over the past five years?


Michael Holcombe Wilson: Madam Speaker, that sort of provocative statement sends me reeling. I am not sure how to handle it.


Some hon. members:: Oh, oh!
Oral Questions


Michael Holcombe Wilson: I believe that the hon. member is not taking account of $10 billion in accounting changes, but we will let that one just slide by because those numbers he does not understand.
Let me point out to him what I said in the budget on TUesday evening. Eighty per cent of the debt that we have incurred, in other words 80 per cent of the budget deficits that this government has incurred since 1984, relate to the interest compounded on the deficit that we inherited in 1984.


Roger Simmons: Not true.


Michael Holcombe Wilson: We have brought all the other costs of government from an operating deficit of $16 billion to an operating surplus of $9 billion. So we have made considerable progress. As we get that operating surplus up even higher that it will cut into the interest costs we are going to get the over-all deficit under control and it will be-


The Acting Speaker (Mrs. Champagne):: The hon. member for Willowdale.


James Scott (Jim) Peterson: Madam Speaker, the minister obviously forgot about those facts. They were out there when he gave us his first five-year plan.
Let us look at the minister's second five-year plan to reduce the deficit that was introduced last Tuesday. He promised us that within five years time our deficit was going to be down to $10 billion. He could not do it in the first five years even though we had an extraordinary economy. Now the minister is telling us he can do it, even though his own policies are driving this country into recession.
The Canadian Manufacturers' Association does not believe the minister. The Canadian Chamber of Commerce does not believe him.


The Acting Speaker (Mrs. Champagne):: Is there a question please?


James Scott (Jim) Peterson: Madam Speaker, my question is very simple. In light of the fact that even the minister's good friends at the Business Council on National Issues do not believe the minister, does he himself believe his own figures, because nobody else does?


Michael Holcombe Wilson: Madam Speaker, the simple answer to that is yes I do. I very strongly believe in those figures.

Oral Questions
But for all of the concern that the hon. member is expressing about the level of the deficit, where is the Liberal Party in this debate? Where is the Liberal Party in putting forward any suggestions as to how we should be getting the deficit down?
All I hear from the Leader of the Opposition is "Why this fixation on the deficit? Why are they so concerned about the deficit?" The Leader of the Opposition has his head firmly buried in the sand and I think the hon. member has too.


The Acting Speaker (Mrs. Champagne):: The hon. member for Nunatsiaq, one question please.


Mr. Jack Iyerak Anawak (Nunatsiaq):: Madam Speaker, a week ago in this House the Prime Minister asserted that the protection of minority language rights was not an abstract concept in Canada and that this protection was given meaning by the national will of a generous and tolerant people.
This week in a most ungenerous and intolerant action the government the Prime Minister leads announced it will close down eight aboriginal newspapers and financially cripple another seven aboriginal communications groups. Given these devastating cut-backs to aboriginal language programs in the International Year of Literacy and Communications, what kind of protection was the Prime Minister speaking of? Did he really mean protection from this government?


Gérard (Gerry) Weiner: Madam Speaker, the department certainly has had some expenditure cuts. That is clear. It is part of an over-all plan to provide us with a secure and prosperous future.
We have heard what the finance minister is proposing for all of us. It pains us to have to say to any individual or any group that somehow others may have to share in the obligation of being supportive. I have commended the efforts of those who have worked in the field. We have a very active race relations program. We have a good understanding as a government of what has to be done in this nation to help all attain a level of citizenship that gets that full participation. We are developing initiatives from coast to coast to address the very concerns that the member is raising.


The Acting Speaker (Mrs. Champagne):: The hon. member for Esquimalt-Juan de Fuca, one question.


Mr. David Barrett (Esquimalt-Juan de Fuca):: Madam Speaker, my question is to the Secretary of State for of External Affairs. The minister mentioned earlier today that Canada must use the instruments that are available in negotiating issues around trade relative to the fish agreement.
The minister knows that after the GATT ruling against our decision to inspect fish at landing, the government decided to go to the free trade panel. At the free trade panel hearing the ruling was that the United States should have access to 10 per cent to 20 per cent. Instead of accepting the finding of the free trade panel, the Minister for International Trade said that the U.S. refused to accept the panel's ruling and drove a harder bargain of 20 per cent this year and 25 per cent in subsequent years.
It is not a question of anti-Americanism. Why did the minister cave in after the free trade panel that he asked for said only 20 per cent and he got bludgeoned into giving another 5 per cent and further down the road? Does the panel stand for anything or is the minister gutless right across the board?


Charles Joseph Clark: Madam Speaker, I will not talk to the hon. member about gut. Let me deal with the important issue that he raised.
There was a panel finding and there was a response on the part of the Government of Canada and the Government of the United States. The question at issue was that while there was a reference to the percentages, there was also a consideration of Canada's ability to impose our conservation requirements.


An hon. member:: Read the decision.


Charles Joseph Clark: I read the panel. The panel makes it very clear that we would not have the conservation protection under the panel report that we have under the arrangement negotiated by the Government of Canada. What we did was purchase greater protection for Canada to be able to apply our conservation regimes.
February 23, 1990

That in the long term is of enduring interest and importance to the country.


David Barrett: The other panels will be worthless, and you know it.



ROUTINE PROCEEDINGS


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



BROADCASTING


Albert Glen Cooper: Madam Speaker, there have been consultations with the three parties and I believe that you will find unanimous consent for the following motion: I move:
That this House support the principle of the Canadian Parliamentary Channel proposal as presented to the Standing Committee on Elections, Privileges, Procedure and Private Members' Business by the Canadian Broadcasting Corporation and the Canadian cable television industry, on the understanding that CPAC will broadcast the proceedings of the House of Commons, as well as any other proceedings that are provided to it by the House.


Don Boudria: Madam Speaker, I know there have been consultations but as of late yesterday afternoon, the parliamentary secretary had undertaken to consult with one of my colleagues, the member for Kingston and the Islands, with regard to the exact wording. My information is that that consultation has not yet happened.
Perhaps in the spirit of co-operation we could undertake that such consultation take place now and notwithstanding anything else, we could give our unanimous consent for the introduction some time later during the day. Perhaps that would be the best policy. Maybe the
Routine Proceedings
parliamentary secretary could revoke that motion now and reintroduce it a little later today.


Albert Glen Cooper: Madam Speaker, I beg to differ with the hon. member. There were consultations with their membership yesterday. If there is some confusion on their side, fine. We can set the motion aside for now.


BUSINESS OF THE HOUSE
Albert Glen Cooper: Madam Speaker, I have another motion for which I believe there is unanimous consent.
There were discussions concerning the first Monday that we return. Because of some of the problems with the normal provisions for Private Members' Business beginning at one o'clock and we are not able to proceed with Private Members' Business on a budget day, it leaves a gap. Therefore, I move the following motion: That, notwithstanding any Standing Order, on Monday, March 5,
1990, the House meet at 1.00 o'clock p.m. for resuming debate on the
budget.


Mr. Angus:: Madam Speaker, I wish to confirm that there have been some discussions with regard to this particular motion. We do concur. We think an additional hour of debate on the budget would be a most appropriate activity for this House to pursue.


Mr. Milliken:: Madam Speaker, we quite agree. We are glad to see the change of heart on the part of the New Democratic Party.


The Acting Speaker (Mrs. Champagne):: I take it for granted that the hon. parliamentary secretary had unanimous consent to move that motion.
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.

André Ouellet: Madam Speaker, today I would like to table a number of petitions for several thousand people from my constituency of Papineau-Saint-Michel. These people are firmly opposed to the new goods and services tax proposed by the Conservative government. I also want to refer to the requests made by Mr. Andre Comeau, president of the

February 23, 1990
Routine Proceedings
Association quebecoise pour la defense des droits des retraite(e)s et des pre-retraite(e)s of Saint-Michel, who, on behalf of its members, is calling on the Prime Minister (Mr. Mulroney) to withdraw the GST which is so unfair to low-income people.


André Ouellet: Madam Speaker, I would also like to table other petitions sent to me by the Conseil des droits armeniens du Canada.
These are signed by residents of the Montreal area, specially from my constituency as well as from the ridings of my colleagues of Saint-Denis and Saint-Laurent. They are asking the government of Canada to call upon the Soviet authorities and firmly ask them to recognize the rights of the Armenian people in Azerbaijan.


Alfonso Gagliano: Madam Speaker, I have the honour and the pleasure to table this afternoon 24 petitions signed by 1,650 people, who are opposed to the goods and services tax, which they submit is a regressive tax which will cost several thousand jobs to Canada.
Also, Madam Speaker, with your permission, I would like to table 20 more petitions signed by 1,099 residents from my constituency and the Montreal area. These people oppose the new goods and services tax bacause it will cause severe and unfair hardship to low and middle-income Canadians.


Don Boudria: Madam Speaker, pursuant to Standing Order 36,1 have the privilege to table petitions signed by hundreds of Canadians who object to the federal government's plan to impose a new tax on goods and services which will be unfair to my constituents and all Canadians.


Robert Evans Skelly: Madam Speaker, I have a number of petitions to present today.
One is from constituents of my riding of Comox-Albemi expressing their opposition to the goods and services tax, calling on Parliament to reject the current
proposal for a GST and asking Parliament to consider a fair system of taxation rather than the GST.


Robert Evans Skelly: Madam Speaker, I also have a petition from many of my constituents criticizing the government for cutting back on its funding for the Canadian Broadcasting Corporation. These constituents call upon the Government of Canada to increase support for the CBC so that those areas of the country that rely on CBC will be able to have continued quality service from that organization.


Robert Evans Skelly: I also have a petition opposing the clawback of family allowances and old age pensions. The petitioners also ask the government to change its policy on the clawback.


Robert Evans Skelly: I have another petition certified under Standing Order 36 from a number of my constituents who are asking the government to do a full assessment of the ecological significance of the Carmanah Valley.
With respect to Michel Gratton, I believe that Environment Canada should do a survey of the old growth forests of the whole of the west coast of Vancouver Island, not simply of one valley so that we can examine areas which might be logged, areas which might be set aside in order to optimize logging, raw material supply and the preservation of old growth forests.


Mrs. Shirley Maheu (Saint-Laurent-Cartierville):: Madam Speaker, I have the honour to table some petitions from my riding and neighbouring ridings: Saint-Hubert, Pierrefonds, Pincourt, Kirkland, Beaconsfield, Dollard-des-Ormeaux, Laval, Delson, Saint-Eustache, Deux-Montagnes, Montreal East and Montreal.
The petitioners ask the federal government to reject the proposed goods and services tax.
February 23, 1990


Mr. Steven W. Langdon (Essex-Windsor):: Madam Speaker, I have a petition which is against the goods and services tax. It comes from the constituency of the member of Parliament who said this morning that all his constituents liked the GST.
It calls for the Minister of Finance to drop his goods and services tax as an unfair form of taxation, to review the entire taxation system so that we have before us in this country a system of taxation which is fair and equitable and does not fall so heavily on the ordinary people within this country.


Mr. Sid Parker (Kootenay East):: Pursuant to Standing Order 36, the attached petition is certified correct as to form and content.
I have a large number of names from the area of Creston and Wynndel in my riding, that the Minister of Finance's proposed goods and services tax is an unfair form of taxation because of its lack of regard for taxpayers' ability to pay, that the government has not addressed the unfair taxation system currently in place which permits wealthy individuals and corporations to pay little or no federal tax while forcing lower and middle-income taxpayers to bear more of the national tax burden and that the government is now trying to tax reading material, haircuts, diapers, coffins and home heating fuels. The petitioners therefore call upon the government to do away with this tax and bring about a more fair and equitable taxation system.


Raymond John Funk: Madam Speaker, I have a petition signed by 700 to 800 people from the communities of Pelican Narrows, La Ronge, Stanley Mission, Pinehouse Creek, Uranium City, Fond du Lac, Stoney Rapids and Denare Beach, which is most of the people in many of those communities.
They are also protesting the introduction of the GST, called the grab and steal tax. In those communities they already experience double and triple the cost of living of communities in southern Canada. They do not believe the finance minister when he says that when the big companies receive benefits through this tax that it is going to benefit them. They know they will be paying more and would sooner not pay the tax.
Routine Proceedings
Therefore, they call on Parliament to withdraw this tax and to institute a system of fair taxation, especially one that is fair to northerners.


Peter Andrew Stewart Milliken: Madam Speaker, I am pleased to present to the House today a petition signed by a number of Canadians who are opposed to the goods and services tax. They regard this tax as vicious and unfair and call upon Parliament to reject the tax.


John R. (Jack) Whittaker: Madam Speaker, it gives me pleasure to rise today pursuant to Standing Order 36 to present a petition from the Caribou, British Columbia, and also towns in my riding such as Grand Forks and Christina Lake. I add these petitions and the signatures to the thousands I have already presented from my riding alone to the House.
These petitions indicate that the people of Canada and particularly in these areas will not be tricked by this government dropping the GST from 9 per cent to 7 per cent. These people are calling on Parliament to change the tax and to make the tax fairer for all Canadians.


Christine Susan Stewart: Madam Speaker, I would like to present a couple of petitions today, pursuant to Stand Order 36.
The first one addresses the frustration of some people in my riding, particularly in the Trenton area, to Bill 178 in the Province of Quebec. I would like to take this opportunity to congratulate the city of Trenton for this past week voting against an English-only policy in their community despite the frustration of people, as it is expressed in this petition, and the city's support of the Federation of Canadian Municipalities for its policy of tolerance, civility, amity and generosity throughout Canada with regard to official language rights.


Christine Susan Stewart: The second petition I would like to present is again from people in my riding who express their deep and grave concern regarding the proposed goods and services legislation this government is proposing. They ask that that legislation be withdrawn in its totality.

Government Orders


Albert Glen Cooper: Madam Speaker, I will be responding to one question today. Perhaps the Hon. Member for Glengarry-Prescott-Russell would like to come and carry it down. Madam Speaker, if Question No. 197 could be made in order for return, the return would be tabled immediately.


The Acting Speaker (Mrs. Champagne):: Is it the
pleasure of the House that Question No. 197 be deemed to have been made an Order for Return?


Some hon. members:: Agreed.


Mr. Boudria: In fiscal year (a) 1984-85 (b) 1985-86 (c) 1986-87 (d) 1987-88 (e) 1988-89, were fees paid to notaries and legal agents acting on behalf of the Federal Business Development Bank and, if so (i) what are the names of the recipients (ii) what were their dates of appointment (iii) what fees were paid to them?
Return tabled.


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


The Acting Speaker (Mrs. Champagne):: Shall the remaining questions be allowed to stand?


Some hon. members:: Agreed.


Iain Francis Angus: Madam Speaker, given the volume of material being supplied in answer to that question, I wonder if the Deputy Whip would indicate to the House the cost of answering a question such as that.


Albert Glen Cooper: Madam Speaker, I cannot give an exact figure. We have probably 1,400 pages of material, information collected from virtually all departments and involving a huge number of people. I am sure the cost would be in the thousands of dollars.


An hon. member:: They will never read it.




Albert Glen Cooper: Madam Speaker, I am advised now that there have been complete and thorough consultations. If we were to put the motion on CPAC, I believe we would
have unanimous consent of the House to approve that motion.


The Acting Speaker (Mrs. Champagne):: Is there unanimous consent for the Parliamentary Secretary put the motion to the House?


Some hon. members:: Agreed.


Iain Francis Angus: Madam Speaker, I wish to indicate that this motion which adopts the principle of the CPAC proposal has the acceptance and support of my party. By doing so, in terms of the principle, it allows flexibility vis-a-vis the implementation of the proposal.


Peter Andrew Stewart Milliken: Madam Speaker, I will just indicate that we also support the motion. As a member of the committee that tabled the ninth report of the standing committee on privileges and elections, I would hope that the adoption of this motion will not mean that the other very important portions of the report will be ignored.


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


Some hon. members:: Agreed.


[Stage Direction]
Motion agreed to.

[Stage Direction]


[Stage Direction]
The House resumed consideration of the motion of Mr. Andre that Bill C-56, an Act to amend the Small Business Loans Act, be read a second time and referred to a legislative committee.
Shirley Maheu: Madam Speaker, "since 1984, this government has been following a consistent and comprehensive plan to ensure that Canadians can benefit from a rising standard of living and a quality of life second to none in the world." That is what the Minister of Finance told us when he presented his Budget this week.
Madam Speaker, I would be curious to know when we will be able to enjoy such a wonderful life. I doubt very much that Canadians are conscious of that at the moment, especially when the Minister goes on to say, and I quote: "This will be a testing year for the Canadian economy. The economic news will not be encouraging in
February 23, 1990

the months ahead. Growth will be slow. Employment is expected to continue growing, but now as quickly as the labour force, and the unemployment rate will rise."
We really have to wonder if we will ever see a strong economy with this government.

Madam Speaker, with this new budget we cannot congratulate the Conservative government for spending restraints. It is too little, too late. As stated by the Canadian Federation of Independent Business, and I quote: "If tax increases had been matched by spending cuts, the deficit would be half of what it is today and consumers would not be paying 20 per cent for consumer credit and small businesses would not be paying 16 per cent for their operating loans". Once again, the Canadian population will be paying for government mismanagement. This Minister of Finance is responsible. How much more can we take?

Madam Speaker, if inflation and interest rates continue to rise in 1990, we will be heading straight for a recession that will have been brought about by the Minister of Finance. In the Budget, the government announced that unemployment would rise and that assistance to business would be limited. As the Minister said: "With limited exceptions, grants will be eliminated and financial assistance will be repayable on more rigorous terms."
How does the government view the future of small and medium-size businesses in Canada? Is he favouring large businesses only when he tells us that to master our future in a changing world, we must expand our capacity to produce and sell Canadian goods and services at home and in markets around the world? Are Canadian small businesses not the very foundation of our regional and national economies?
How does the minister account for his cuts of more than $18 million at the Federal Business Development Bank, which is involved solely in assisting small business? More than half of the bank's budget has been cut, from $34 million in 1989-90 to $15 million for 1990-91.
Government Orders
Madam Speaker, the federal government announced it would abandon its regional development policy, without telling us whether the votes in question would be reallocated to other regional development initiatives or simply scrapped. Is this the beginning of the end for our regions, for the businesses in those regions and especially for the people who want to work there?

This budget is not serious. How can it be when the minister announces so innocently that "there will be no new taxes in this budget"? How can he say such a thing when everyone knows that Canadians from all provinces will live the side effects of the reduction of transfer payments to the provinces? It is a direct result of the budget presented in this House.
In my province of Quebec each taxpayer will have to pay $582 more because of this new budget. As someone so eloquently said:, "Tory times are tough times" and "Tory times are taxing times". Since 1984 Canadians have been blessed with 31 separate tax increases. What a blessing.
No new tax in the budget but the mechanism is in place for the new one next year.


The Acting Speaker (Mrs. Champagne):: I am very sorry to have to interrupt the hon. member, but I just wondered when she intended to address the bill before the House today, the Small Businesses Loans Act.
I realize she is making an excellent speech, but she is getting into the far more general subject we have been considering all week.
I would appreciate it if the hon. member would concentrate on the subject now before the House.


Shirley Maheu: Madam Speaker, without wishing to contradict you, the GST and the Budget do have a tremendous impact on our small businesses.

No new tax, as I was saying, in the budget, but the mechanism is in place for the new one next year, the GST, the goods and services tax, the tax the minister says will make low income Canadians better off, the tax nobody wants, the nightmare for small business, as Mr. Bullock of the Canadian Federation of Independent Business said.

February 23, 1990
Government Orders

Madam Speaker, more than 90 per cent of Canadians don't want the GST. Do they realize there is more than meets the eye? Perhaps it is time the minister told the truth about this tax which will come into force in 1991 and will cost all Canadians a lot of money, especially businesses which will have to hire more staff to collect this tax.
Canadians don't want it! The message is loud and clear. Does the minister have a hearing problem?
This tax, as the hon. member for Ottawa South (Mr. Manley) pointed out, is the biggest corporate tax break ever seen in Canada's history: $6 billion in taxes transferred from corporations to consumers.
Canadians do not know if they should laugh or cry. To help secure the approval of his Budget, the Minister appeals to the pride of all citizens by telling them, and I quote: "Canadians have stuck together through testing periods by reaffirming, time and again, their ability to build on the rich diversity of the nation with realism, determination, foresight and understanding."

When the minister presented this budget, he told the House that the replacement of the existing GST was a key part of the economic plan, that it would strengthen economic competitiveness, contribute to deficit reduction and lead to a fairer sales tax system. He also said that his government was going to continue working with the provinces to seek ways of minimizing the compliance burden of the tax, which is one of the greatest concerns of our small business community. Could the minister explain to the Canadian population how such a fair tax could be such a burden and give everyone a major headache, especially to small businesses?

Madam Speaker, the Minister had also assured us that the goods and services tax would be visible and yet, it will remain invisible! He said that the tax would be simple. I know for a fact that small businesses do not agree. Canada will be the only country with two sales tax systems: one federal and one provincial. Is it really the only way the Minister has found to put Canada on the map?
The Canadian Federation of Independent Business believes that the GST will be a nightmare for small businesses. Maybe the Minister is hiding something from us. Does he have shares in the Bayer company?
Besides causing migraines, the Minister seems to have trouble with his memory. He quickly forgets his promises. Businesses which have to collect the GST would have received some kind of compensation. I did say "would have", because of course this is no longer the case. Again, the minister has not kept his word.
Madam Speaker, through the years small businesses have become the driving force behind our economic growth and job creation in Quebec and in Canada as well. The new and developing small businesses have sustained the economic recovery which followed the 1981-82 recession and created in the eighties, most of the new jobs, that is over 80 per cent.
In 1987, 41 per cent of Canadians working in the private sector were employed by small businesses with less than 100 employees. Add to this the one million unincorporated self-employed workers, and you will see that small businesses accounted for 46 per cent of jobs in the private sector in Canada. The Minister of Finance does not seem to realize the significant contribution small and middle-sized businesses have made to support the economy of our country.
Madam Speaker, the small business community also has the highest rate of job creation. This is something quite significant, especially when the Minister of Finance coldly announces an increase in the unemployment rate for the coming year. From 1978 to 1987, more than 50 per cent of new jobs were created by businesses having less than five employees, which increased employment by 167 per cent.
The small business sector is more than a mere source of jobs. It is also a source of innovation and creativity. The Minister of Finance perhaps might get some training there before he presents his next budget.
Because they want to remain competitive, more and more small businesses are doing research and development. Businesses with less than 100 employees accounted for nearly nearly 20 per cent of R & D expenditures in the private sector. This is significant.
February 23, 1990

[English\
The Liberal party, contrary to the Conservative government, recognizes the vital role small business has in our economy. We are conscious of the essential part small business plays in job creation in Quebec and in Canada.
We have always supported small business. During the last election we made a commitment to help develop small business through new and creative initiatives, one of which was the setting up of an integrated information network with the help of the Federal Business Development Bank, which has just had a nice cut. A mere 50 per cent of its revenues have gone through the generosity of this Minister of Finance.
What about the assistance the Conservative government is giving, or rather, forgot to give to small business? What about the Small Businesses Loans Act? Does the Minister of Finance need a reminder of its original purpose? It was to guarantee small business loans from financial institutions. But, as we can clearly perceive through this budget, the government does not seem to recognize the importance of small and medium businesses in Canada.

Madam Speaker, traditionally the loan ceiling under the Small Businesses Loans Act has been increased regularly, based on the rate of inflation and the needs of small businesses, That was tradition. But the last time the ceiling was increased was in July 1980-and I repeat 1980-when it was raised from $75,000 to $100,000.
It is high time the Minister of Finance raised the limit from $100,000 to $150,000, all the more so that inflation has gone up more than 50 per cent since 1980. Flow far should it go before the government acts?
Madam Speaker, I would appreciate it if the minister told us frankly for once whether he wants small and medium-sized businesses to disappear, and whether he is hoping for the announced increase in unemployment? Or, on the contrary, as should any responsible government do, whether he wants the well-being of Canadians. Why is he then neglecting the future of our small and medium-sized businesses? Why has the loan ceiling remained at $100,000 since 1980? Why has the funding of the Federal Business Development Bank been cut by 50 per cent? Is that a Progressive Conservative Party
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management method? This is something that is not especially reassuring for the Canadian people.

When presenting his Budget, the Minister of Finance told us that we have "a responsibility to our children and grandchildren," and I am quoting him. Could he now explain how Canadians are to live up to their commitments when he announces an increase in unemployment and when his Budget does nothing to support small businesses that generate thousands of jobs? How are Canadians expected to make ends meet with a tax on goods and services coming into effect as soon as January, 1991? How is the quality of life to be improved for our children and grandchildren when job insecurity, inflation and a possible recession are just around the comer? Could the minister clarify all that? It does seem a bit confusing when one reads the Budget, or is it meant to be this way?

Madam Speaker, it is not, as proposed by the Minister of Finance, by taxing food and services and by neglecting small businesses, except at tax collecting time, that the economy of our country will recover and at the same time improve the situation of Canadian men and women. It is not by shifting the federal debt burden onto the provinces that the standard of living of Canadians will improve. Only by assuming its responsibilities and facing reality can this Tory Government really expect to remedy the situation of the Canadian people. But it will have to see things as they are and not as it would like them to be.
"We are cutting our expenditures without increasing the taxes. The tax pressure is already too great in Canada." That is what the present Minister of Finance said in March 1984. He has certainly forgotten that!
Finally, Madam Speaker, the Minister has repeatedly broken his tax reform commitments. He had promised that his GST would be revenue neutral. It is not. He had promised that his GST would be visible. It is not. He had promised that his GST would be simple. It is not. He had promised that the Crown would compensate businesses for collecting his GST. He changed his mind. How could the Canadian people still trust a Minister who has failed so much in living up to his commitments? How could small and medium-sized businesses hope to survive when the Minister of Finance has cut by over 50 per cent the funds available to the Federal Business Development Bank and refuses to rise the loan ceiling from

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$100,000 to $150,000, while the inflation increased by over 50 per cent since 1980?
How could we believe a Minister of Finance who claims to "follow a consistent and comprehensive program which should make it possible for Canadians to benefit from a standard of living and a quality of life unprecedented in the world"?


Mr. Skelly (North Island-Powell River):: Madam Speaker, in terms of small business there is a general comment that I would like to make about the lack of support of the government.
First, is the closure of post offices and the effect that has had both on the communities generally and small businesses particularly. The Halfmoon Bay post office would be a prime example to illustrate this. Halfmoon Bay is a small community with a small post office that has served that community. A large number of the people are senior citizens and there are some small businesses. The post office is one of the key communication systems for those businesses in carrying on their activities. The post office with a very high-handed approach has without consultation shut that post office down and, in the opinion of many people there, harmed those businesses and the people who live there showing no concern for them. The argument that they have privatized postal services into small businesses has, in fact, harmed the community and in many cases caused a great deal of difficulty for the small businesses involved.
That post office at Halfmoon Bay has been there since 1883. It is an integral part of the community and serves small businesses there. It was an arrogant process by which the postal corporation shut it down, with the approval of the government, It refused to negotiate with the community on the provision of those services. One business benefits, but many, many others are harmed.
I wonder if the government is taking into consideration, not only the budgetary items mentioned by the hon. member, but its attitude in harming the infrastructure by these postal closures. This process of privatization-cutbacks in services, higher cost services as
illustrated by the shutdown in Halfmoon Bay-is causing a serious deterioration in the community, and has a very negative impact on the majority of small businesses.
Does the hon. member have a comment on postal shutdowns and other services that the government has cut back that have caused some serious harm to small businesses?


Shirley Maheu: Madam Speaker, I thank the hon. member for his question.
I think I would go a little further than the shutting down of small local post offices. Let us talk about the mail superboxes. They have caused great problems for Canadians.
I guess the simplest answer is that I do not have too much to say except that the government just does not care about people. It never has.


Raymond John Funk: Madam Speaker, it gives me great pleasure to rise in this House to comment on the bill before us which involves amendments to the Small Businesses Loans Act and extends that act for another three years. As well, it gives me pleasure to be able to comment on the state of small business in the country, particularly in my province and community.
I think all of us recognize the very vital role that small businesses play in all our communities, be they rural communities, urban communities, neighbourhoods, small towns or whatever, even northern communities.
When we examine what we do with regard to small business it bears thinking that between 1980 and 1988 fully 70 per cent of the new jobs in Canada were created by businesses that employ five people or less. This means that rather than big business which the government tends to promote as being the instrument of growth in this country, it is the small business sector that keeps creating the jobs.
Small businesses are the mainstays of the communities in which they operate. Sure big corporations from time to time sponsor national events, get their names on billboards and so on, but when it comes to the week-byweek, day-by-day sponsorship of hockey teams, provision of prizes for different kinds of raffles that keep the service clubs operating in all these communities, it is the
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small business sector that keeps all those community activities going and provides leadership.
As well, perhaps most important in this era of free trade and increasing foreign control of our economy, still fully 98 per cent of small businesses are Canadian-owned. I think that is just one more reason that it behooves all of us to support the small business sector.
This bill is essentially housekeeping. It cleans up the act, provides some amendments and extends the period of the act. What bothers me somewhat in this debate is the government claiming that this bill represents its commitment to small business and that it represents the commitment of the Progressive Conservative Party to small business.
I say to you, Madam Speaker, that small business has started to see this government's commitment, or claims of having a commitment, as a joke. I would like to outline the reasons that small business is starting to feel more and more that, in fact, this commitment is not only a joke but a sick joke.
First, the whole tilt of economic policy by this government since it was elected in 1984 has been very decidedly in favour of big business at the expense of small business and local communities. It has done that in any number of ways. It has done it through free trade. It certainly is not going to be the comer store that will be involved in massive deals with New York, Denver or Chicago, or whatever. It is big business that does that, not small business. It stacks the deck in favour of big business.
The deregulation we have seen in many sectors has allowed the big companies to take over sectors where small business used to operate and compete and now are not able to any more.
As well, it affects areas that are essential to small business such as air travel and transportation to remote communities. In fact, what has happened is that all we see now are services to the larger communities. Services to the smaller communities where small businesses are located are disappearing.
The government has chosen to stay on a course of persistently high interest rates that penalize small businesses which have to go outside the family or the community for its money. Big business can raise money internally. It can raise money on the capital markets. The whole system of high interest rates has militated against
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small businesses, even though they are the ones that keep this country in business.
As well, the tax policies have created a situation where wealth is sucked out of the hinterlands, the small towns, small businesses and the entrepreneurial families. It is concentrated in big cities and big financial institutions, again making it more difficult for small businesses to compete.
The other reason small business sees the government's commitment to them as being a joke is that, more than any other sector, they depend on their customers having money to spend. Without customers who have money to spend and vibrant local communities, small business cannot operate.
I would like to point out what is happening in my own province of Saskatchewan. Finally the central Canadian media are starting to recognize Saskatchewan as being an economic disaster area. In 1988, there were 461 insolvencies, 2,063 businesses disappeared, and only 2,664 businesses were created in that province. That is a net loss of 900 businesses in a small province with only one million in population in just one year.
We see the same trend in my own community of Prince Albert, the major centre in my constituency. In 1987, there was a net gain of 31 new businesses. In 1988, there was a smaller net gain of 18 new businesses. In 1989, there was a drop in the number of businesses in that community of 18. With the way the trends are going, that pattern of businesses disappearing can do nothing but accelerate.
It is no accident that this has happened to the province of Saskatchewan. In the farming community in 1984, when this government took office, there were 67,000 farms in Saskatchewan. Projections are that when the government's term runs out in 1992 there will only be 54,000 farms left, a drop of 13,000 farms in the province of Saskatchewan. That is 13,000 farm families who are not buying their groceries and machinery, who are not getting their hair cuts and so on, in the small communities of Saskatchewan.
Since the government was elected in 1984, 64,000 people have been forced to leave the province of Saskatchewan. People want to stay but economically they are not able to under the government's economic policies. Just in the last year 23,000 people left the province. We used to consider ourselves a have province. In fact, there was a time during the former NDP government we

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were not getting equalization payments. We had a surplus budget.
What has happened now? We are the second-poorest province in the country. We have 13.9 per cent of our population, almost 14 per cent, living below the poverty line. That is more than one in ten families and nearly one in seven. Certainly people living in poverty are not helping small business either to farm or to keep going. It is no wonder that there are all these bankruptcies and business closures.
Of the 500 towns in that province, 300 lost population in the last five years. It is an utter disaster. Bankruptcies have tripled. What kind of direction do we see from the government now that small business is looking to it for a signal as to what kind of future they can envision and expect?
The government not only predicts but plans for higher interest rates. The rates are now at 13 per cent. As my colleague, the member for Yorkton-Melville said, who can believe the government's estimate that the average next year will be 11 per cent when we are starting the year at over 13 per cent? We are going to have lower disposable income next year and the families in the country, and certainly in the province of Saskatchewan, will have less money to spend and not more. They are already hurting. What does the government say? Because of its economic policies, there is going to be a full 1 per cent drop in the disposable income available to Canadians. With a 5 per cent inflation rate, it means, in effect, that they will be able to buy 6 per cent less goods and services when we already have 15 per cent poverty.
The government expects that in the next several years unemployment is going to grow by 100,000 jobs per year. We know what happens. This fall in income and this rise in unemployment are not going to spread evenly across the country and they are not going to happen evenly in all the communities. They are going to happen in those precise communities that are already in trouble.
So not only do we have what was a localized recession and economic catastrophe, but the government is building into the system and virtually guaranteeing a national
recession. That means that the economy of Saskatchewan cannot look for any help from the rest of Canada.
Then we have the prospect of the goods and services tax. Certainly nobody has rallied to fight the goods and services tax like the small business community. I have tabled petitions in the House representing thousands of people in my constituency. I go through the names to see who they are and what communities they represent. Every time I look at a page I am struck by the number of people who represent the small business sector and, in fact, people who have ardently and enthusiastically supported the Progressive Conservative Party in the past. Theirs are the names that are showing up on the GST petitions. They know what it is going to do to them in spite of the claims of the government and the Minister of Finance.
Also I would like to comment briefly on the situation faced by small businesses in the northern part of my constituency and, by extension, small businesses right across northern Canada. Those communities are in the forest and mining areas, and the native communities of the country.
The businesses operating in those communities face a large number of very special handicaps. There are no banks in most of these communities. In the northern part of Saskatchewan there is a bank in La Ronge and one in Creighton. There are 43 communities in northern Saskatchewan, which means that 41 of them do not have access to banking services. There is nothing in the banking system that says in spite of the hundreds of millions of dollars that large corporations pull out through mining and other activities, there is any obligation to provide banking services to those communities. It means that people wanting to start businesses do not have any kind of credit rating. It means that you cannot make a daily or even weekly deposit without driving hundreds of miles, or even flying, to the nearest bank. It is very difficult to run a business under those circumstances.
Regional development programs that assisted northern businesses and, in fact, all the businesses in our region have been gutted. Regional development programs made it possible for small businesses to have access to programs that would enhance forestiy and fishing. They could develop economic organizations where they could group together to speak with one voice and to plan the economy of their communities. The kind
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of grassroot programs that used to be available under regional development programs are gone. Instead, we have the Western Diversification Fund operating just in the big cities. It is clearly tilted toward further support for big business and completely ignores the needs of small businesses in those northern communities.
As well, we see that northern tax benefits are under threat by a task force set up by the government. It is a tax benefit brought in a few years ago and then the government shut the door. It was a tax benefit that recognized the high cost of living and of keeping trained personnel in those communities, the high costs that are associated with living in northern Canada.
As well, the point that was alluded to by the member for North Island-Powell River is a very real factor in those northern communities. Rather than building up the infrastructure of post offices, communication systems, transportation system and telephones, what we see is the government listening to their big business friends who say: "We only need those services in the big cities. We need to provide those services as cheaply as possible to the big users. The people who live in the rest of the country, the vast majority of the land area in this country, can make do and have to make do." Instead of improving, those communities which can make an economic contribution to Canadian life are faced with the lower and lower services and are more and more removed from the mainstream of economic life in this country.
So what do we need? Certainly this bill helps, but it is just a drop in the bucket compared to what small business needs.
First, in Saskatchewan we need a farm program that is not going to centralize agriculture into a few big corporate farms at the whim of the international market. We see the government at the GATT and free trade, selling out the family farm sector. All that means is even more acceleration of the trend to even fewer farms. Predictions are that if the agri-business model takes hold, we might be down to 14,000 farms in Saskatchewan within the next 20 years. That means that thousands more businesses will disappear. In fact, whole communities will disappear.
We need a Bank Act that will do several things. It needs to put small business on an equal footing with big
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business, both with respect to interest rates and collateral required and with respect to where those banking services are offered. They should be offered right across the country so that we do not keep sucking money out of the small communities and the frontier areas of this country to deposit for use by big corporations in Toronto, Vancouver and Montreal.
We need regional development programs that, on a sector by sector basis, build up those resource areas that could make a contribution to the country and its economy. They could then make a contribution to paying off our debt.
We should be reforesting northern Saskatchewan, and all the forested areas that have been clear-cut and are being left to blow away in the wind. We could create a lot of employment and ensure the future viability of business in those communities by planting more trees.
We need to take the environment seriously. Given the small population of the frontier areas of the country, if we took the environment seriously and cleaned up our lakes, restocked the fish, and cleaned up the pollution from old mines, everybody in those areas would be working rather than having 70 per cent to 80 per cent unemployment rates.
Obviously, we need lower interest rates. Interest rates are the biggest killer of small business. We need an end to the GST. We need a recognition of community economic development corporations, co-operatives, and other alternate sources of capital that will allow people in those communities to pool their capital, raise new sources of funding, organize themselves into businesses, and look at business opportunities in their communities. We need new creative ways to do that. What we have seen is that former practices are being taken away. We have to return to some faith in the grassroots of Canada to be able to control its own destiny.
We need to ensure that the customers of small businesses have money. We have to have a full employment policy in Canada. People with welfare cheques and unemployment cheques are not the same kind of customers as people with pay cheques. If there is one thing that small business in the country and in my constituency would like to see, it is more people with pay cheques and fewer people with welfare and unemployment cheques. The people with those welfare and unemployment

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cheques would like to see that too. There is a coalition of interest there.
Most of all, we need a government with a policy that ends this fixation with big business-this fixation that only big business can help us compete in the so-called brave new world. What we need is faith in grassroots Canada and the communities of Canada to control their own economic destiny, so that every community and every citizen of this country has a personal stake in its economic future.


Ross Harvey: Madam Speaker, I was just wondering if the perfect cap to the hon. member's absolutely reasonable and, indeed, incisive remarks, might not be an observation by him as to persons to be found in the gallery.


Raymond John Funk: If that is permissible, Madam Speaker, I would like to introduce my mother, Helene Funk, from Saskatchewan; my sister, Carla Sheridan, from Ottawa, and her two daughters, Jessica and Anna.


The Acting Speaker (Mrs. Champagne):: The Speaker being the only person who can officially recognize people in the gallery will be happy to join and transmit greetings.


Raymond John Skelly: Madam Speaker, the hon. member raises a good point, but I would like to make some observations about postal shutdowns, particularly, as an example, the Halfmoon Bay postal shutdown.
It is my hope that the minister responsible for the Canada Post Corporation will also comment on this shutdown. It illustrates the absolute arrogance of Canada Post, particularly in the western region. This particular small post office has been in place since 1883 and is an historical facility in the community. It is interesting that the Canada Post Corporation and the Conservative government would remove that post office without negotiation or without consultation with the owners, two small business people in Halfmoon Bay. They placed their business in jeopardy. They placed the community in jeopardy, as well as the other small businesses and the senior citizens who depend on that post office.
When Canada Post decided to close the post office it sent in a PR flack, a person of incredible arrogance. The reaction of the community to that person was astounding. It is no wonder that the Conservatives are 19 per cent in the polls and dropping because of that kind of arrogance.
The western regional people have to return to the Sechelt Peninsula, to Halfmoon Bay, to discuss with the small business people who run that operation about reinstituting it so that it can once again serve the community and about restoring it to its current position in the community.
The arrogance in the approach of Canada Post toward those small businesses is unacceptable. The rural post office is an important infrastructure and it has to stop the arrogant high-handed procedure where a public relations person comes in and says: "We've decided this is what is going to happen. We are going to close it, and you are going to like it".
Does the hon. member have any additional thoughts concerning the high-handed approach taken on these postal services?


Raymond John Funk: Madam Speaker, I would like to thank the member for raising that point. It allows me to expand a little more on the issue of postal service.
In my own constituency we have seen postal services disappear in the community of Henribourg, a community that had had postal service for over 50 years. We have seen a postal service cut-back in the community of Shipman.
In communities in northern Saskatchewan that are rapidly growing, for example the community of Pelican Narrows which has 1,200 to 1,500 residents, we see the postal service operating out of a little hole in the wall that has hardly any heat. There is postal service only three times a week, which makes it very difficult to carry on any kind of economic activity.
This is the case right through northern Saskatchewan. Thrice weekly postal service is what many of those communities have come to expect. There are communities that do not have money order or c.o.d. services, so it is virtually impossible to use the mail for any kind of business.
Furthermore, as a result of the way the mail is routed, mail from the eastern, central and western parts of northern Saskatchewan has to go through the south; some of it through Flin Flon and down to Winnipeg and Regina, then up through Saskatoon and Prince Albert, to get about 100 miles across country. This makes it very
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difficult for communities to carry on business activities between themselves.
People in northern Saskatchewan realize that to build up the fishing industry, the wild rice industry, the local forestry business or to create business organizations you need to be able to communicate with each other by postal service. Now that is not possible. The postal service is useless. If you wants to call a meeting you have to send out the mail a full month in advance, and you do not get the minutes before the next meeting is due. People in the south just do not realize what kind of constraints businesses and, indeed, community organizations and individuals operate under in these kind of communities when they get the kind of postal service that Canada Post is giving them. It is a high-handed and arrogant approach, not only to the postal service that already exists in many small communities, but it is totally counterproductive if we are looking at building up the economies of these regions which, historically, have been underdeveloped and have had high unemployment rates.


Raymond John Skelly: Madam Speaker, the example of the Elalfmoon Bay post office was one of just incredible arrogance in its shut down and then in terms of the accountability.
I would like to suggest to my hon. colleague that the president of the Canada Post Corporation, and the regional director, have absolutely no sense or feeling for the people who live there. The fact is that post office is an incredibly historical operation there. It is a major support to small business in that community. The highhanded attitude has got to change. The corporation has to get in there, negotiate and attempt to consult with the people involved before making these kinds of decisions about service to the community. Only in that way can the Conservatives hope to stop the drop from 19 per cent to 9 per cent and then right through the floor.
The fact has been mentioned that postal service stations could provide other things such as banking services in these areas. There has been a lot of talk that banks no longer serve many of these smaller communities. There are banking functions that the post office could perform. It could also serve as a government office and deal with pension forms, citizenship forms and passport forms. It could be a representative of the
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Government of Canada providing a service on a broader basis through those postal facilities to the community and to small businesses.
If there is anything that the Halfmoon Bay case gives us it is an illustration of the arrogance, the high-handed approach and the unwillingness to work with people.


Raymond John Funk: Madam Speaker, I totally agree with the member. Not only the case that he describes represents high-handedness and arrogance, but that is true right across this country in many small communities.
As he points out, not only have post offices played an historic function in holding those communities together, they being the centre of those communities, a place where people gather, but there are a lot of government services that people need on a day-to-day basis. They need contact with the Government of Canada and those services could be expanded to operate through those post offices. In fact, I believe that is true in Britain, where post offices are used in that fashion. I think it would be a good model for us. Services could be extended to people who certainly have an equal right to get those services as everybody else.
As long as this government is totally obsessed with running the post office to make a profit what will happen is that it will be run into the ground in the small communities. Certainly a small community post office is not going to be a big money-maker compared to shipping large volumes of mail between Toronto and Vancouver. Everybody knows that. I think it is criminal for us to ignore the infrastructure and service function of the post office just giving it the function of making money for the government.


Robert Evans Skelly: Madam Speaker, I know some of the Tories may be concerned about the opportunity to get away on a holiday but I am under the impression that we are here in this House to debate. We have time limits established. I was also under the impression that the Tories consider small business an important element in the Canadian economy. I may be wrong.


Albert Glen Cooper: Madam Speaker, first, we on this side were under the understanding that the debate was to be finished. It has nothing to do with our attitude toward small business which is reflected by the bill that we put forward in the House of Commons. So perhaps the hon.

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member would confine his remarks to the issue at hand and not get off on his usual partisan strides.


Robert Evans Skelly: Madam Speaker, I am not sure on what pretence the previous speaker gained the floor, but it certainly was not a point of order. Regardless of what understanding they were under, I am under the understanding that the House sits until three o'clock and that this government bill is the subject of debate. I was advised by my whip that members are permitted to speak on it until three o'clock. Whatever impression that Tory house leader is under has not been communicated to me.
I am concerned about small business and that is why I am on my feet in the House of Commons at the time appropriated for debate on this issue and I certainly intend to debate it. While we support this piece of legislation, we on this side of the House are certainly concerned about the differences in the way that small businesses are treated by this Tory government as opposed to how large businesses are treated. Nowhere was that more evident than in the case of the budget speech which recently came down in this House. When you compare how much of the largesse of this government is given to large businesses, this bill is simply a pittance compared to what the government should be doing in order to help small business grow and thrive.
We have heard some fine statements from that side of the House. We have heard that small businesses create 70 to 80 per cent of the employment in this country. We have heard that small business is the most innovative sector of our business economy. We have heard that small business is also the most competitive sector of our economy. Yet, the very little this government does in order to support small business has to be the subject of more important debate in this House than has been the case.
I heard in advance of the budget coming down this week that the Canadian Manufacturers' Association and the Business Council on National Issues were talking about how seriously the deficit had to be cut and what stringent measures had to be taken, even to the extent of cutting grants to business. The newspapers were saying to the people of Canada that here was an example of
business sacrificing its own interests in order to cut the deficit. In point of fact, nothing could be further from the truth. There is absolutely nothing in this budget that stops the huge flow of resources from the taxpayer of this country to large businesses.
The amount of tax expenditures made available to large business is absolutely unbelievable compared to the pittance that is made available to small business. The capital cost allowances in this country are the most generous of any country in the developed world. Businesses are allowed to depreciate their equipment and to replace labour with capital at a rate that does not even make sense. They are purchasing unnecessary capital to replace labour because of that generous capital cost allowance that we give them. That is not available at such generous levels in any other country on the globe.
If only we were as generous to small business as we are to the large corporations. Nothing is done in the current budget to change that situation. That constant bleeding of taxpayers' resources into non-productive investment still contributes to the deficit and still contributes to the high price of doing business in Canada. If we were going to be serious about trimming the deficit, we should have taken a look at that area of tax expenditure because it is a serious problem in Canada with which we should have been dealing.
In this country we also permit the borrowings of corporations involved in corporate acquisitions and mergers to be deducted from their cost of business in order to calculate their income tax. It is a virtual government support of corporate acquisitions and mergers. The result of these mergers is generally the loss of jobs, the loss of production facilities in Canada, and the loss of the Canadian economic inventory.
As a result, we tend to lose jobs, we tend to lose production and we tend to lose taxpayers' resources which could be reallocated to trimming the deficit. That is the kind of thing that should be cut. It is a direct concession, a direct grant to large businesses; the kinds of grants and concessions that small businesses in this country do not get. We are not giving small business the kind of service that it should be receiving. We recognize that they are the greatest job creators. We recognize that they are the most innovative sector. We recognize that they are the most competitive sector. Yet, we do next to
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nothing in order to support them compared to what we do for large business.
Large business in Canada is essentially controlled by a number of small families who also donate to the Conservative and Liberal parties. They consider those two parties wholly-owned subsidiaries when they are doing business with government and doing business in Canada. If we examine business in this country we find that large business in Canada is the least competitive and the least innovative. As a result, Canada is not served well by its large business sector.
We continue to bleed huge amounts of the government's tax expenditures into that sector while getting virtually nothing in return. Part of the problem is that there is too tight a connection between the bureaucrats in the Ministry of Finance and the large business sector. There seems to be an unethical kind of transfer back and forth between those two sectors.
I want to draw attention to an article about Mickey Cohen in a recent Globe and Mail business report which pointed out that as the deputy minister of finance he was responsible for a substantial number of tax concessions made to business. While he was the deputy minister he made available a half-billion dollar tax concession to Olympia and York developments and suddenly, within weeks, he was an employee of Olympia and York developments. There was simply too tight a connection between those groups.
Is that the kind of entrepreneurs we are developing in the large business sector in Canada? While they are working for the government they manufacture tax concessions for their future employers. That has been the problem with the way this government has dealt with large business in this country all along.
As far as I am concerned there has to be more attention paid to small business people. Those are the people who keep our small communities alive. Those are the people who develop the new and innovative products that are going to take Canada into the world economy as a high technology competitor, and yet that is the sector of the economy that is being starved.
Rather than hacking away at programs for native Indians, rather than hacking away at programs for women, rather than hacking away at programs for small businesses by converting their grants to repayable loans in the budget, we should have been helping those sectors
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because that is where the greatest number of jobs are being created in this economy.
I intend to vote for this bill, but I am certainly concerned about the kind of favouritism this government and the previous government has shown to the large business sector at the expense of small business and individuals.
Mr. Skelly (North Island-Powell River) Mr. Speaker, the issue I would like to raise with the hon. member is the role of big business and the advantages it draws compared to those of small business and the need for the public to have some input.
I would like to address to him a matter relating to the P. J. Wooding Ferro chromium proposal for Port Hardy, British Columbia. It is a major business proposal. The company has received about $4.5 million from the federal government and $4.5 million from the provincial government.
The people to be affected by that project have not managed to obtain any positive response from the Minister of Fisheries and Oceans, the Minister of the Environment, the minister responsible for western diversification or the minister responsible for Indian Affairs on intervenor funding. It is absolutely crucial, if a business with serious impact is to be developed in a community, that intervenor funding be provided to those groups attempting to explore the environmental and social impacts of such a business.
Without prejudice or without prejudging the particular project, the community has a right to know. There are native people in that area who are concerned about their land claim, about the effect on their traditional way of life. They need money to purchase expertise, to study it, and to input properly into the environmental assessment review panel.
This is such an important area for the fishery on the northern end of Vancouver Island that the community affected by possible impacts must have help from the Minister of Fisheries and Oceans to obtain technical expertise. The Western Initiative Fund people felt that it was necessary for expertise and input to be given, and that is why we have the assessment review panel in place, but at this point there is an unwillingness on their part to provide technical assistance through intervener funding or direct aid to these groups.

February 23, 1990
Government Orders
The Department of the Environment, of course, has the crucial first responsibility to give assistance there. Hopefully this intervener funding will come forward. Also, the Environmental Assessment Review Panel has the right to engage technical expertise to assist those groups in their quest for information so that their input to the community can be reasoned, knowledgeable and effective.
This House, the ministers responsible and, I am certain, the hon. member, would concur that it is absolutely imperative that those intervener funds be brought forward and provided to those various communities on the northern end of Vancouver Island affected by this project and that the technical expertise through the assessment review panel be provided so that a full, knowledgeable inquiry into this production process can be made and that proper conclusions on a foundation of good solid knowledge can be provided.
Also, there is a great deal of this project that is hidden by the confidential provisions of contracts and covered up by the Privacy Act. We have to have access to the key elements of that, even if they are considered in camera and confidentially. They have to be brought out where people with the proper expertise can evaluate them and assess the impact to the community.
This is absolutely critical. Citizens can no longer be hoodwinked and kept in blind ignorance about projects that are going into their area. It is absolutely imperative that the committee engage a full range of technical expertise to help the community provide information and that intervener funding is provided. I am absolutely certain that the government would want that to happen as well as the previous member.


Robert Evans Skelly: Mr. Speaker, I would like to thank the previous speaker for his intervention.
This is a problem that we face with the size of corporations that are doing business in Canada today. If a corporation decides to set up a new operation it has huge resources at its fingertips, resources that essentially have been financed by the Government of Canada through the various tax concessions I was talking about. They can mobilize a series of biologists, engineers, and other people with expertise to inform citizens that the
project they have in mind is not going to cause environmental or social impacts that are damaging to the community.
Unfortunately, they can also retain information and hold information in confidence. If we are to have a competent environmental and social impact assessment process, we need the resources and the ability, through the rule of law, to demand that information and also to call to account those corporate employees who are employed on environmental impact statements. Because we do not have intervenor funding from the federal government, those corporations are, unfortunately, allowed to wield a greater amount of power over the environment than they otherwise would be allowed.


Raymond John Skelly: Mr. Speaker, the P.J. Wooding Ferro chromium project on the northern end of Vancouver Island is heavily subsidized by the federal government. One of the things that is seriously questioned is the attitude of that company toward organized labour. There is a great deal of concern in the community that the federal government could provide a grant to a company which is prepared to prohibit its workers to organize, to prohibit its employees the right to have a contract with their employer and bargain collectively for their wages and working conditions.
It is important when the government is giving grants, especially to an outfit like the P.J. Wooding Ferro chromium project, that there be an opportunity for organized labour to go in and organize that workforce, to permit them their rights under the law and to bargain collectively for their wages and working conditions.
This absolutely assures that the money from that project, the return on taxpayers' dollars and the return on the resources, accrues to the community of Port Hardy and is not carried away to some other jurisdiction as so often happens with foreign ownership and ownership from out of the region. If they permit organized labour into that operation a better share accrues to the community. Grants from this government should not be permitted to any corporation which attempts to exclude organized labour from that project. This is absolutely critical. It would be my hope that the government would make a statement on that today.
February 23, 1990


The Acting Speaker (Mr. Tremblay (Quebec-Est)):: Questions or comments? Debate? Is the House ready for the question?


Some hon. members:: Question.


The Acting Speaker (Mr. Tremblay (Quebec-Est)):: Is it
the pleasure of the House to adopt the said motion?


Some hon. members:: Agreed.
Government Orders


Some hon. members:: On division.


[Stage Direction]
Motion agreed to, Bill read the second time and referred to a legislative committee.
The Acting Speaker (Mr. Tremblay (Quebec-Est)):: Since there is no other business on the Agenda, pursuant to the order made Wednesday, December 20, 1989, the House stands adjourned until Monday, March 5, 1990, at one o'clock, pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 1.27 p.m.
[Stage Direction]
Monday, March 5, 1990