1990-05-15

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39 Elizabeth II

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Published under authority of the Speaker of the House of Commons by the Queen's Printer for Canada
Available from Canada Communication Group - Publishing, Supply and Services Canada, Ottawa, Canada K1A 0S9.
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Tuesday, May 15, 1990
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Prayers


Mr. Speaker:: I have the honour to inform the House that I have received a communication notifying me that a vacancy has occurred in the position of Deputy Speaker of the House of Commons, namely, the hon. Marcel Danis, by resignation.


CRIMINAL CODE
Mr. Jim Fulton (Skeena) moved: for leave to introduce Bill C-301, an act to amend the Criminal Code (gun control).


The Acting Speaker (Mr. Paproski):: Shall the hon. member have leave to introduce the said bill?


Some hon. members:: Agreed.


James Ross Fulton: Mr. Speaker, I am pleased to have the opportunity to introduce legislation in relation to gun control. It has two principal elements to it. One is in relation to the difficulties rural Canadians have long faced in terms of obtaining farm acquisition certificates. I believe the suggestion that I have is one that members from rural Canada would well understand and very likely support.
The second element is in relation to the deletion of the search and seizure without warrant provisions which were provided for in the notorious gun control legislation of more than a decade ago. Even independent analyses of the existing legislation that have been done indicate that there have been serious abrogations of it. My legislation would intend to remedy that.


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Motion agreed to, bill read the first time, and ordered to be printed.
The Acting Speaker (Mr. Paproski):: Before I recognize the hon. member for Skeena again, I would hope he would do the Chair the courtesy of giving advance notice that he is going to present bills. Is the hon. member going to present his three bills today?


James Ross Fulton: Four bills.


CANADA SAFE DRINKING WATER ACT
James Ross Fulton: moved for leave to introduce Bill C-302, an act to protect and enhance the quality of drinking water in Canada.


The Acting Speaker (Mr. Paproski):: Shall the hon. member have leave to introduce the said bill?


Some hon. members:: Agreed.


James Ross Fulton: Mr. Speaker, as all members of the House are aware, the quality of drinking water in Canada is the greatest environmental issue Canadians want addressed. Some 40 per cent of the marine pollution, both salt and fresh water, in Canada is presently coming from the pulp and paper industry.
One of the things that my legislation does is to establish base lines upon which we can move toward the same concept of zero discharge and zero tolerance that one finds in relation to the recent annex to the Great Lakes Water Quality Agreement. The intention is to clean up and keep safe and potable all fresh water in Canada.


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Motion agreed to, bill read the first time and ordered to be printed.
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May 15, 1990
Routine Proceedings

James Ross Fulton: for leave to introduce Bill C-303, an act to amend the Canadian Environmental Protection Act, (application of fines).


The Acting Speaker (Mr. Paproski):: Shall the hon. member have leave to introduce the bill?


Some hon. members:: Agreed.


James Ross Fulton: Mr. Speaker, this amendment to the Canadian Environmental Protection Act is a fundamental one. It provides for is what is known as fines-splitting. Under this provision, private groups or private individuals, which either provide information to the Crown or proceed with private prosecutions, would be returned up to one-half of the fine following the completion of the legal and court process and a ruling by the courts.
This is a widely respected and known principle used in many countries to encourage people who are working in an industry, farmers who see things happen, or private individuals who see degrading matters going on that affect the environment, to bring these matters properly before the courts.


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

James Ross Fulton: for leave to introduce Bill C-304, an act to amend the Forestry Development and Research Act (modified trees).


The Acting Speaker (Mr. Paproski):: Shall the hon. member have leave to introduce the said bill?


Some hon. members:: Agreed.


James Ross Fulton: Mr. Speaker, as you know, the recently passed Department of Forestry Act has a provision for the taking of a national inventory, something I know the Minister of Forests is undertaking with great speed.
One of the amendments to the federal legislation that I think is urgently is required is in relation to what are known as culturally modified trees. They are found in all areas of Canada, including both the territories. In particular, one finds culturally modified trees in places like Meares Island, where aboriginal people centuries ago operated, on a sustainable basis, the large-scale harvesting of wood from the forests without even cutting the tree down. They simply stripped planks and other materials from the trees.
The intention of this amendment to federal legislation is to provide for protection of culturally modified trees where they have a particular scientific or cultural value.


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

Mr. Stan Keyes (Hamilton West):: Mr. Speaker, I have the honour and duty, pursuant to Standing Order 36, to present to the House yet another petition certified correct by the Clerk of Petitions. It contains the signatures of hundreds of Canadians who say that since September, 1984, the Conservative federal government has imposed on Canadian taxpayers at least 32 new taxes or tax increases. The Conservative government wants to impose on Canadians a new general 7 per cent tax on goods and services whereas the Liberals, on behalf of Canadians, strongly oppose this new goods and services tax, which is an unprecedented tax grab from the pockets of Canadians and will hit them not only with higher taxes but with higher inflation, higher interest rates and higher unemployment.
Therefore, the petitioners pray and call upon Parliament to reject the proposed goods and services tax.


Mrs. Coline Campbell (South West Nova):: Mr. Speaker, pursuant to Standing Order 36,1 have the honour to present a petition certified correct as to form and content and signed by some 42 concerned constituents. It is with regard to recent amendments to the Unemployment Insurance Act which deprive adoptive parents of proper assistance.
May 15, 1990


Coline M. Campbell: Mr. Speaker, I would also like to present a certified petition with 49 signatures calling on the House to legislate to protect the rights of the unborn.


Coline M. Campbell: I have two other petitions, Mr. Speaker. One is signed by 70 people calling on the government to scrap its proposed goods and services tax.


Coline M. Campbell: I have another petition, Mr. Speaker, signed by 46 constituents calling on the government to reconsider recent budget cuts affecting veterans' lodging.


Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, I would like to table a petition today dealing with the infamous tax concerning services and products which will be imposed by this government in January 1991.
This petition presents serious arguments against the imposition of this regressive tax. The petition says that it will be applied unjustly to Canadians, that it will complicate their lives, and will make small business very difficult to administer. As a matter of fact, it will be an onerous burden on small business.
These people strongly oppose this goods and services tax which is, in their view, an unprecedented tax grab from the pockets of Canadians and will hit them not only with higher taxes but with higher inflation, higher interests rates-and God knows we have them now-and higher unemployment which is still with us.


Mr. Peter Milliken (Kingston and the Islands):: Mr. Speaker, I have the pleasure to present a petition signed by substantially over 100 residents of my riding of Kingston and the Islands, who indicate their support for the proposition that no tax be applied to books and magazines, to the printed word in Canada, a democratic country. They submit that culture and education in a literate and productive society would be affected by the imposition of a tax on the printed word.
They call on Parliament to reaffirm this basic tenet or principle of democracy and reject a tax as proposed by this government on the printed word as embodied in the
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legislation supporting the GST, Bill C-62. They call on Parliament to reject that bill and that tax.


Ms. Lynn Hunter (Saanich -Gulf Islands):: Mr. Speaker, I rise today pursuant to Standing Order 36 to present three petitions all related to the goods and services tax, all somewhat different in their focus. They are all wanting Parliament to scrap the tax. Today's news is that the inflationary pressures of tax increases by the government are in fact increasing the interest rates and endangering small business.
The petitioners want us to make it known that while there is a broad public consensus to scrap the manufacturers' sales tax, the government should not use it as an opportunity to impose a massive tax grab.


Mr. Neil Young (Beaches-Woodbine):: Mr. Speaker, I too have the pleasure to present a petition pursuant to Standing Order 36. It is signed by quite a number of people from southeastern Ontario.
The petition says that the Minister of Finance's proposed goods and services tax is an unfair form of taxation because of its lack of regard for a taxpayer's ability to pay. The petitioners call on Parliament to reject the current proposal for a goods and services tax and to reform the taxation system so that there is an effective minimum tax on wealthy individuals and corporations. They also ask the government to cease with a proposal which will shift the tax burden on to ordinary Canadians through a regressive consumption tax instead of through real tax reform.


James Ross Fulton: Mr. Speaker, I am pleased to present, on behalf of hundreds of petitioners, a large number of petitions which have been certified correct pursuant to Standing Order 36.
The petitioners are concerned that the government has not addressed the unfair taxation system currently in place which permits wealthy Canadians and corporations to pay little or no federal tax, while forcing low and middle income taxpayers to bear more of the national tax burden. The government is now trying to tax piano lessons, haircuts, diapers, coffins and even consumer loans, which some Canadians must take out just to pay their taxes.
Therefore they call on all members of this House- and I know, Mr. Speaker, you will be at the front of the line to oppose the GST when it comes before the

May 15, 1990
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House-to reject the current proposals for a grief and suffering tax, the goods and services tax, the GST.


QUESTIONS ON THE ORDER PAPER
Mr. Albert Cooper (Parliamentary Secretary to Leader of the Government in the House of Commons):: Mr. Speaker, I ask that all questions be allowed to stand.


The Acting Speaker (Mr. Paproski):: Is it agreed?


Some hon. members:: Agreed.


BUSINESS OF THE HOUSE
Mr. Danis:: Mr. Speaker, I would like to advise the House that tomorrow will be an allotted day.



GOVERNMENT ORDERS


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The House resumed from Monday, May 14, consideration of the motion of Mr. Wilson (Etobicoke Centre) that Bill C-65, an act to provide borrowing authority, be read the third time and passed.
Mr. David D. Stupich (Nanaimo -Cowichan):: Mr. Speaker, I welcome this opportunity to stand in my place and debate this borrowing bill, particularly since it gives me an opportunity to talk a little more about Canada's record with respect to interest rates.
I read some time ago that it was the practice in old China, for those who could afford it, to pay the medical practitioners when they were doing a good job; that is, when they kept them well. If they became ill, they cut off the payment to the medical practitioner until such time as they got well again. Obviously, if they became sick under that practitioner's treatment, he was not doing the right job. So they paid him to keep them well, paid him
while they were well, but cut off the payment when the medical practitioner was ineffective in his work.
In Canada, we look at it differently. We have a person who is responsible for economic affairs, the Governor of the Bank of Canada, who admits that he has failed in his announced goal. It has been his goal to reduce inflation to zero. He keeps talking about zero inflation. Inflation keeps creeping up.
He admits that he is failing in his job. In the Bank of Canada report for 1989 he said: "The Bank of Canada actions did not result in any improvement in our inflation performance". There is no one better than he to say that he failed totally in his job.
Instead of punishing him in some way, exhibiting our displeasure at what he has or has not done, we give him a salary increase of 35 per cent over three years. This to the very man who is telling Canadians that they should exercise restraint. To him we give an increase of 35 per cent in a period of just three years.
I think the Chinese approach was better. Perhaps it worked better too. I do not have any details as to just how well it worked, but we all know that Mr. Crow's policies have failed Canada totally in every way, not only in his announced goal of getting inflation down to zero, which he still tells us is his goal, but in the fact that many parts of the country are experiencing a very severe recession. So he has failed us in every way and we should be taking another look at his medicine.
Let us go back to the medical analogy. If you have something wrong with you and you go to a doctor who puts you on some treatment plan and, instead of getting better you are getting worse, then surely you would question the treatment. If he prescribes a medicine which, instead of improving your situation makes you worse, would you not question whether there was something wrong with the medicine or that maybe he was giving you the wrong medicine? Surely, Mr. Speaker, it is appropriate to ask questions like that.
We do ask questions. Mr. Crow is asked questions and his response is always that we must try more of the same medicine, we must make it worse than it has been.
That reminds me, using a medical analogy again, of the days when they bled patients. The thinking was that if they were sick, let's make them worse, let's take some blood out of them so they cannot cope with their illness and then maybe they will get contrary enough to recover.
May 15, 1990

That would seem to be what Mr. Crow is trying to do to the Canadian economy. He is trying to make it worse in the hope that the punishment will make us achieve the target for which he is reaching.
He is trying to get inflation down to zero by increasing interest rates. He might just as well be trying to control a forest fire in British Columbia by pouring gasoline on it. There is no more effective way of increasing inflation than to increase interest rates. Interest rates immediately impact on the cost of everything in the country.
Take as an example businesses producing goods for sale in this country. Every one of those businesses, every one of the suppliers of those businesses, everybody in the whole production line is borrowing money somewhere along the way for capital construction, for inventory or even to finance their accounts receivable. Every time the cost of borrowing goes up they have to increase the cost of their product to recover that, or they do not pay any corporation tax and we lose out that way as well.
The impact of an increasing interest rate on business is to increase their costs. They pass those costs on to the pubic generally and that is one of the ways in which inflation is measured.
It increases the value of our dollar. Of course that is the real purpose, I believe, of increasing the interest rates but, nevertheless, it does increase the price of our dollar. Increasing the price of our dollar makes it more difficult for us to export, more difficult for us to compete with other countries. So it cuts down on our exports which again cuts back on employment and makes our economy just that much worse off.
It increases imports because, relatively, the cost of goods that are imported into Canada goes down as our dollar goes up relative to other currencies. It is easier then for us to buy from abroad so we import more and export less and that, again, hurts our total economy and makes for inflation. It does not bring inflation down to zero; it makes it worse.
It increases budget deficits, and we certainly know the history of that. Year after year the budget deficit is in the neighbourhood of $28 billion to $30 billion, all of it going for interest. Although you cannot allocate the dollars and say this dollar goes to interest and that dollar goes to
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something else, certainly we know the amount of the deficit is almost as much as we are paying on financing the current debt of Canada.
Of course if increases unemployment. All of these things have a detrimental effect on inflation and defeat the very purpose as announced by the Governor of the Bank of Canada.
It encourages higher taxes. Of course when the government starts running into trouble financing its deficit, financing its programs, when taxes fall off because of unemployment, because of cut-backs in business, the government is inclined to increase taxes in order to try to recover some of the lost revenue to meet the bills that it still has. Of course we all know that that is just as inflationary as anything else that can be done. Inflation is fuelled by increases in taxes.
It affects the balance of payments, increases interest rates, brings the dollar up to a higher value and cuts down on our exports. There is any number of industries from one end of this country to the other complaining about the effect of the increase in the dollar and how it has hurt their position in world markets.
We talked about free trade and the benefits we were supposed to get from that. Everyone will agree-and I do not think anyone would deny for one moment-that the increase in the value of the Canadian dollar has many times wiped out whatever advantages we might have had to date from the free trade deal with the United States. Any reduction in prices from the Americans has been more than taken into account by the increase in the value of the Canadian dollar.
When we affect the balance of payments negatively- that is when we reduce our exports and increase our imports-we have to increase our borrowing abroad. We did not have to do it before, but we do now. I have seen figures anywhere from $50 billion to $200 billion representing what we owe abroad right now. That is bad business. We should not be borrowing from abroad. We should be able to finance everything we are doing in Canada from our own resources. Otherwise we are simply borrowing trouble for the future.

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I recall speaking in the B.C. legislature, criticizing the government of the day for borrowing from abroad and reminding them of a speech that the finance minister of British Columbia, the Hon. Herbert Anscombe, had made almost 50 years ago when he was cautioning the province of British Columbia and Canadian governments in general about borrowing abroad. Some day those loans have to be paid, not with Canadian dollars, but with Canadian goods. We have to some day export more than we are importing or we will never catch up. The foreign debt is bound to increase unless we start exporting more and importing less.
Increasing the value of the Canadian dollar, which is a direct result of increases in interest rates, means that we borrow more abroad, and we are doing that steadily these days. That, too, is borrowing trouble for the future.
I mentioned earlier that the Governor of the Bank of Canada, who by his own admission has failed in his attempt to get to zero inflation, was granted a 35 per cent increase in salary over a period of three years. And he is asking Canadians to hold the line.
The executives of CNR were given an average increase of 18.7 per cent in one year, and they are asking their employees to hold the line. As a matter of fact they used the power of Parliament to ensure that their employees would get an increase in one year of 4.5 per cent. That is good enough for the people who are doing the work, and the people looking and watching over them got 18.7 per cent in one year. And they have the nerve to ask people to hold the line and be careful.
The Minister of Finance said something to the effect that it was Canada's policies during the late 1970s and early 1980s that led us into the recession of 1982-83.1 do not know where the minister was at that time, but it may be news for him that Canada was not the only country in the world that suffered a recession in that period. Every country in the western world at least suffered a severe recession in that period.
It was not Canada's policy to drag the rest of the western world into the mires of a recession. Certainly it was economic policies and every one of the countries was following similar economic policies, but we were not in trouble here because of something we did in Canada. We were in trouble in British Columbia because the Americans quit building houses and they were not buying our lumber. We were in trouble in Ontario because they were not building the automobiles they used to build and we were not selling them automobile parts. We were in trouble in the east because they were not buying our minerals and the lumber, the pulp, the newsprint, the paper. We live on our exports, and our exports were severely curtailed during that period because our customers were not buying. It had absolutely nothing to do with what we were doing here in Canada.
Certainly, we could have done better for ourselves in Canada than we did, but the severe recession that we had was brought on by the western world-wide recession. Now we are heading down the same road. The Governor of the Bank of Canada and the Minister of Finance seem to feel that that is the route for us to go. "Let's make things so bad that whatever happens people will think they are better off than they were yesterday."
The Minister of Finance estimated in his budget that the interest rate would be 11 per cent this year. I wonder if he remembers that these days. The last figure for the Bank of Canada as I recall was 13.77 per cent. It is understandable that inflation will result from the imposition of the GST which is scheduled to come on line January 1, 1991. The government wants to curtail as much as it can any attempts by workers to keep even with inflation.
In general, that has not been happening in recent years, except for the workers at the very top. They have been doing very well, but the workers on the production line have not been keeping up with inflation. Mr. Crow and the Minister of Finance want to keep them down further. That is not the way to prosperity in Canada. We should not increase unemployment.
I mentioned earlier where free trade comes into it. One of the reasons the New Democrats did so well in British Columbia, and especially on Vancouver Island, was that we talked about free trade. We said that one of the main reasons for going into the free trade deal, the Mulroney-Reagan deal, was to improve the U.S. trade balance.
The U.S. was in a tremendous deficit position with respect to Canada. It was importing far more from us than it was selling to us, and it did not like that. The U.S.
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was having trouble, so it wanted to change it, turn it around. That is why we got into that deal.
One of the ways to achieve it was to increase the value of the Canadian dollar. The interest rates do not follow inflation. They follow the Canadian dollar. When the dollar dips, the interest rates go up. If it dips a bit more, they go up higher. If the dollar gets beyond a certain point then interest rates hold steady for a while. Mr. Crow said he made a mistake when he dropped the rate back in January, but it is the dollar that they are watching.
Canada has committed itself to the United States to do everything it can to improve the American balance of payments position with respect to our country. We are accomplishing it by getting the dollar up so high that it is creating unemployment, bad business opportunities for our enterprises in Canada, reducing corporation taxes we might be collecting from them, increasing our deficit, hurting our economy in every way conceivable but it is great for the Americans.
In part, while this borrowing bill says it is for public works and other purposes, it is there because we need the money to finance the ever increasing foreign debt that Canada is building. We need to have the money to pay it, but it is time we started sending a message to the practitioners who are supposed to be curing the Canadian economy. Your medicine is not working. Your treatment is not working. Change your medicine, change your treatment or get out of the way and make room for somebody who will take hold of the Canadian economy and make Canada a country in which we all want to live.


Mr. Eugene Bellemare (Carleton -Gloucester):: Mr. Speaker, I listened to the member with interest. I congratulate him on his presentation.
I wonder if he would elaborate somewhat on the question of the value of the Canadian dollar when and if it is affected by lending abroad as opposed to lending money within Canada. Would he expand a bit on that?


David Stupich: Mr. Speaker, when we borrow abroad, we have to pay the interest rates demanded of us. If our economy seems to be in bad shape or if there are some political problems-there are some questions now-then the foreign lenders want more money.
Foreign lenders have other opportunities. There are stories now as to what might happen in Germany with respect to their interest rates when the East German and West German marks become one. Japan may have to raise its interest rates. They are looking for opportunities to lend and they will lend to the best places for the best interest rates.
For Canada to get the money it needs to keep the lifestyle in which we have been living, importing more than we are exporting, means we have to pay more interest, which means we have to raise our taxes, and raise government revenues by selling products. We cannot print dollars, we have to export. That is the only way we can do it.
During the war, Canada had one million people in uniform. I was one of them and perhaps there are others here who were as well. We were producing everything we consumed. We were producing things to try to fill the Atlantic. Boat after boat was being sunk carrying goods produced in Canada. We did not fill the hole, but we did keep everyone working. It was great and the economy was booming. We did it without borrowing a single dollar abroad because no one had any money to lend us at that time. It can be done if we are prepared to do it ourselves in our own country. It is time we started tightening up in Canada.


Mr. Guy Ricard (Laval):: Mr. Speaker, I listened carefully to the speech of the last speaker. He says that Canada, sooner or later, will have to export more than it imports.
I remember quite well the debate on the free trade agreement. His party was dead against it. I wonder if he can explain why there are two policies in his party?


David Stupich: Mr. Speaker, there are not two policies. We were dead against the free trade deal because it was a bad deal for Canada. We were in favour of trade. We are in favour of trade. We are in favour of international trade. We support GATT, because that is a trade agreement. The deal made between our Prime Minister and the then President of the United States was made in the United States for the United States. It was a deal that was contrary to the interests of Canada and, as such, we opposed it. That is not opposition to trade, it is opposition to a bad deal for Canada.

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Coline M. Campbell: Mr. Speaker, I am pleased to rise today to speak at report stage of Bill C-65, an act to provide borrowing authority in the amount of $25.5 billion that this government needs to borrow in order to carry on the business of government. I question whether it is the business of government they are carrying on. It seems to me the government is slowly leading Canada into a way of life we have not known for a long time.
It gives me an opportunity as well to draw attention to the government's mismanagement of fiscal policy, mismanagement that it steadfastly has tried to avoid responsibility for ever since it came into power in 1984. The time has long past when members opposite could credibly blame the previous administration for its fiscal wrongs. Canadians are now measuring the government's performance against its own standards and promises, not those of former governments. They see Canadian standards being torn down; VIA, financing between the provinces and the federal government, they see Air Canada being sold and having losses, they see Canadian Airlines not doing well, the deregulation that the government brought forward in these areas is not really working to the benefit of Canada.
The Minister of Finance is again asking Parliament for the authority to borrow billions of dollars and increase the public debt as a testament to his own failures. The minister's lack of action on the deficit has left the financial cupboard bare and greatly reduced the ability of the government to come to the aid of Canadians who, through no fault of their own, are in a time of crisis: Atlantic fishermen and fish plant workers, prairie farmers, and laid-off workers in all industries that are moving to the United States because of the free trade agreement.
There is no money for these people because this government will only give them money if the provinces chip in.
It has made great promises that it will give money if the provinces come in to help the prairie farmers. It has money, supposedly: give them the interest at least to keep it going until it can make arrangements with the governments on the prairies to help the farmers. It gave a program to the Atlantic fisheries last week that is going to be conditional on whether the provinces and the
companies put money in for the adjustment program and all work to use what little federal money was put in.
In September 1984 the Minister of Finance warned Canadians about the dire fiscal situation he had been left with by the previous government. I was a member in this House, and I do not think it was very dire considering the economic times we had just come through with the high interest rates and high inflation.
This is not what we have today. We have high interest rates and low inflation in comparison to that time. The minister called for a quick change in policy direction, a change that he promised would cut the yearly budget deficit in half by the end of the decade and vastly reduce the growing net public debt. He projected this debt would reach $400 billion if the legacy of the former government was not brought to a quick end. What did he replace it with? In 1990-91 we find that the net public debt is projected to be $379.9 billion, just slightly below what the Minister of Finance projected in 1984 and more than double what he inherited.
This is a government that had the best of economic times in the last six years. It did not reduce the deficit. It did not even cut back on government spending as it should have in good economic times. We have the largest cabinet that we have ever seen. We have so many ministers of state that people do not know where to go to get some action.
The yearly deficit for 1989-90 stood at $30.5 billion, a mere $4 billion below the $34 billion deficit the minister posted in 1985-86, the first full year of Tory rule.
More to the point, the small progress that he has made on deficit reduction has come about, not from expenditure reduction as he promised in 1984, but from massive tax increases. The average family of four in Canada is now paying an average of $3,000 more in taxes compared to 1984.
The question that remains is why is this happening. In the first place, despite the minister's well-known pride in his ability to forecast the direction of the economy, his department has consistently underestimated yearly growth rates. In 1984-85, for example, he predicted that growth would run at 4.2 per cent and 2.4 per cent respectively when in fact it ran at 6.3 per cent and 4.8 per cent. This first failure has in turn in my opinion played into the hands of the Governor of the Bank of Canada, whose fixation in achieving a zero rate of inflation has pushed the prime to 13.75 per cent. This rate is murderously high-and I will talk about that further in a

May 15, 1990

moment-and highly discriminatory against the regions that have never really joined Toronto in the boom of the 1980s.
I say that because we now have the Governor of the Bank of Canada in an impossible position. If he reduces interest rates, inflation will go up. His prime objective is to get it down. Whatever he is going to do we are going to see high interest rates when the countiy cannot afford to see the rates we are seeing presently.
Each point the minister is off in his interest rate predictions adds another $1.7 billion to the deficit. This year's budget forecasts were finalized in January before the most recent escalation in rates. It is not likely now that they will fall from 12.2 per cent to 9.5 per cent in 1991 as predicted in his budget.
The government must be doing something wrong. It has to have another look at what it is doing to interest rates and to this country. Maybe we need a two interest rate policy in Canada. Maybe Toronto and Montreal in the golden belt and Vancouver need one interest rate. Maybe we should have an interest rate for the rural areas as long as the money is being kept there in the area and is not leaving.
I do not know what the minister needs for new ideas, but certainly his policy is not working in Canada today. He needs to look at a lot of other proposals that have come across rather than tax, tax, tax and not admit his own fiscal responsibility to Canadians.
The dismal figures I quoted today are not the responsibility of any previous administration. It is not the previous government that created a tax policy that tightened the screws on the individual while letting large corporations off the hook. In 1984, corporate taxes accounted for 13.2 per cent of revenues compared to 10.4 per cent in 1991. In 1991 alone, the government will collect some $2.4 billion less in corporate revenue than it had predicted last year.
When the GST comes on stream in 1991, the corporate sector stands to reap a $6 billion tax break even if the reduction in the existing manufacturers' sales tax is fully passed on to consumers; we will have to wait and
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see if it will be passed on. They could do it better than with the break that this government is giving them.
It is not the former government that followed the fiscal policy which has more than doubled the net public debt since 1984. It is not the previous government that promised to cut the deficit in half by the end of the 1980s. It is not the former government that followed an interest rate policy that binds our rates some five points above those of the United States, leaving our dollar artificially high and hurting our exporters. It is not the former government that was so strapped for money that it dreamed up the single largest tax grab in Canadian history, the GST, the most cynical and regressive cash cow ever designed.
No, it is this government, this Prime Minister and this Minister of Finance who must take credit for all of these dubious accomplishments. Canadians are still waiting impatiently for members opposite to deal with these facts, not the previous government. The Conservatives are in power. Why do they not come up with the programs that Canadians want?
I want to use some of my time to speak about the fishery and the effect this government's policy has had. Last week we had the Atlantic Fisheries Adjustment Program from this government, but its financial cupboard is bare. We saw just one consequence of this bareness and lack of ability to come up with assistance in the fish aid package.
The crisis in the groundfisheiy on the east coast is a result of many factors mostly beyond the control of those affected: the fishermen, the plant workers and the communities. Europeans and Americans have refused to adopt conservation measures consistent with our own. As a result, they continue to fish our stocks at a murderous rate, while our own fishermen are forced to tie up their boats.
In the House last night I talked about the 45-footer that went out to fish silver hake on Brown's Bank, which is closed to our fishermen, because it is a spawning and preservation area. This refers to the million dollar fines that the minister wants to bring into the House against Canadians, yet there are foreigners on the spawning banks today taking the fish. The fisherman could not get silver hake in his nets; he got about a 185 per cent catch of pollock.

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What are all the large foreign trawlers and freezer factory ships that are out there getting? They are getting the traditional fish, not just silver hake, and they are interrupting the spawning grounds of the local fishery.
The federal government's record of scientific analysis has been poor as we saw in northern cod. As a result stocks have been reduced leaving fishermen who have invested in expensive sophisticated equipment often with federal and provincial encouragement holding the bag. They have also lost markets due to the high interest rates and the artificially high Canadian dollar that has resulted, that is if they have a market.
The two counties I represent, Digby and Yarmouth, as well as Shelburne county represented by my colleague from South Shore had markets for many years but they do not have them today because they do not have fish. They do not have to worry about high interest rates or the dollar. They could sell fish. Their fish has always been known to be the best. The offshore has fish in the markets, but what they put into the markets sometimes leaves a lot to be desired. I am saying that if they even had fish they could be marketing and helping themselves.
Only about one-quarter of the government's total aid package, $120 million out of the $584 million over five years, will be devoted to finding new jobs for plant workers. In terms of new money in the aid package, there is very little: $426 million over five years, averaging out to $108 million per province over five years or $20 million per province per year. This is for an industry that has over 100,000 workers and generates $1 billion in business income annually.
More money has been made available for developing underutilized species and marketing in that fish aid package. I think the amount was $50 million to establish markets in underutilized species such as silver hake. Last week there were 20 Russian boats out there on Brown's Bank and in the silver hake box the 42 foreigners who were fishing up at the easterd. "Easterd" is a term to say that you are southeast of Halifax, probably in the same area as Brown's. There are still foreigners fishing there when our fishermen could not be there.
If we had more money to put into underutilized markets, we would find that our offshore would perhaps
be given an incentive to go after the underutilized. Back when we had the northern cod, ironically as it sounds, and nobody wanted to fish it, the Liberal government of the day gave an incentive for the offshore to go and fish the northern cod. In fact it was a very healthy incentive. It was so much a pound to the boat. It was capped around $13,000 for the boat trip; $15,000 if you came from Nova Scotia and $13,000 in Newfoundland. However, they paid part of the insurance because it was supposed to be treacherous waters for those boats to go to the offshore for northern cod. As well, they put an observer on those boats.
We cannot have that type of program today because of the free trade agreement. Even the bail-out last week could not be given directly to the fish plants or to the boats. It had to be given to communities, if it is going to be given at all, and to laid off workers in the adjustment program. It could not be given directly to the fishery because of the free trade agreement and it being considered a subsidy to those offshore companies.
So you give a gift to National Sea. They get to keep the companies. They get to keep the boats. They can take the boats away from Lockeport, Canso, and North Sydney without blinking an eye. Our provincial government is allowing it. Our federal government is allowing it. Why? Because they are sitting there opposite allowing big business to take over what used to be a healthy inshore fishery.
I want to go back to the underutilized because I think that is the direction this government must go if it is going to save the fishery. If we send the offshore out to fish the underutilized, the foreigners would not need to come because we would be utilizing the fish within our 200-mile limit. It is so simple, but it seems to be hard for this government to understand that if we fish the underutilized here in Canada, the foreigners will not come and fish within our 200-mile limit. We will not have those big offshore foreign trawlers taking 400,000 pounds of fish a trip when our boats are limited to 2,000 pounds if they can even go out in the course of one week.
More money has been made available for developing underutilized species and marketing directed at maintaining the processing capacity at plants that would
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otherwise close. But it is not enough. The $90 million over five years, or $4 million per province per year, on average, to develop new markets or to go after the existing markets of the foreigners who fish here is not enough from this government. It has to put more money in. It has to forget the free trade agreement because most of the markets for the underutilized species are not in the U.S.
I could talk now about rebuilding the stocks. However, right now I want to bring to the attention of the House a crisis that has developed because of a lack of willingness on the part of officials in the Department of Fisheries to take more interest in the problem.
I understand that fishermen are sitting-in in the fisheries offices in Barrington, Pubnico, Meteghan and Digby. Barrington is in Shelburne County. Shelburne County is 100 per cent dependent on the inshore fishery. Those fishermen are protesting for one very basic reason. They put in a proposal in January or February. It was discussed. They put it in again over a week and a half ago and last week they were getting frustrated. They have not fished. They asked to meet to discuss their proposal on Georges Bank, where the Americans are fishing and taking all they want.
As a result of protests in front of the building in Yarmouth last Tuesday, they came back on Thursday and asked for a meeting in Meteghan yesterday with the department officials. Not one official came. Yet late Friday the department gave a counter proposal which did not relate at all to what the original proposal had been. These fishermen are upset. The department officials do not have any credibility, which is why they did not come to explain why they put forward those counterproposals.
I know my time is up. Perhaps some of my colleagues would like to hear more in the time provided for questions and answers.
I want to say that a very dangerous situation is in existence in the southern end of Nova Scotia today. It is because for over a year the fishermen have asked to meet with the ministers of fishery. I say "ministers" because there has been a change in ministers. They put in a proposal that was countered without any due consideration to all the discussions that had gone on before.
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This government has got to start to act. It must listen to the provincial ministers who were there at the meeting yesterday to ask that this government realize the dangerous situation that is now in existence in our area.


The Acting Speaker (Mr. Paproski):: The hon. member would like some questions or comments. The hon. member for Winnipeg North on a question or comment.


Mr. Rey Pagtakhan (Winnipeg North):: Mr. Speaker, I congratulate my colleague for her dissertation on this proposed bill to borrow $25.5 billion during the current 1990-91 fiscal year to cover the government's budgetary deficit.
During the last part of her presentation on the fishing industry she spoke about how it has been damaged by this government in that part of our country. I would like the hon. member to continue. In a real sense what this government has done is continue to damage the have-not provinces of Canada. If she has some more data, I would appreciate hearing from her.


Coline M. Campbell: Mr. Speaker, I thank my colleague for the question and for giving me the opportunity to explain.
In the southern end of Nova Scotia we are dealing with an inshore fishery that has been there for a long time. These boats are very efficient. At one time about six years ago you might have 45-foot or 65-foot boats that could go out and easily catch 50,000 pounds to 100,000 pounds of fish.
Quotas have decreased. The last time they were allowed to fish was for a three week period. They were allowed to catch 20,000 pounds over three weeks.
You have to imagine, Mr. Speaker, that these boats have had an opportunity in the past to come in with up to
50.000	pounds of fish. Yet they were given a quota of
20.000	pounds over three weeks.
There was no mesh size, something that they had been asking for, which would allow the escapement of small fish. So they had to do selective catching. They took the big fish which will bring them money, something which the offshore fishermen and the foreigners do as well, which causes a lot of dumping of dead fish.

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In effect you are saying to fishermen in a fleet: "You can only go out and fish x number of fish" when their capacity is great. They will tell you that maybe there are fewer fish out there. But all the studies they have been involved in with the department show that there is more fish there and that they should be allowed to fish. This was in the proposal which was submitted to the department over the last few months.
That proposal was for 25,000 pounds a week, per boat, regardless of using it or not if they did not go out, over 40 weeks. We are talking about 250 boats. We are not even talking maximums or an amount that the fishermen would have liked to have had. We are talking of a fishery in Georges that would allow them to go fish every week on Georges Bank where their American counterparts have been fishing all winter. They went one day last year to Georges, the area that has been so good to the fishery in the southern end of Nova Scotia.
I will tell hon. members the difficulty. A mesh size has been talked about. A mesh size allows the escapement of the little fish through the nets. I am sure that there have been at least five meetings a year for the last five years, if not more, where mesh size has been discussed with the department. The discussions started at a mesh size of 120 mm through to 140 mm. After many meetings a square mesh size of 130 mm was arrived at, a figure which the fishermen felt would allow them to start working with.
On Friday department officials said 140. They are never satisfied. They could not even meet the fishermen and tell them that face-to-face. They had to do it in a round-about way.
On Friday the department said to the fishermen: "You won't take a mixed bag". It is pretty hard to put the pollock over here, the cod over there and the haddock here and throw it back after it has been caught. That is a mixed bag. The department said: "You won't take a mixed bag. You'll take two-thirds of pollock and one-third of cod and haddock".
You tell me, Mr. Speaker, that when you are out fishing you can take two-thirds of this in your catch for the week, or whatever the allowance is? The department's attitude toward these people has become so incredible. Sure these people are sophisticated, but this is the only employment in the area. It is those fishermen who have kept the economy going.
We have had a year-round fishery in the past. There has been no sympathy from this government at all.
I would like to say one more thing about the proposal which came out on Friday. It was greeted with anger. The department was using the different sectors such as the longliners, the fish draggers and others to get at people. It came out clear yesterday that the department officials want to divide and see the offshore given total control of the area. They want to see the freezer factory ship given a licence in January 1991 again to come and fish within 20 miles where these people have traditionally fished.
The department is so numbed by having helped National Sea Products and Fishery Products International that it cannot see what it is doing to the inshore communities. It is very tragic when you think that these people have families and debts and yet they cannot go out and fish.
Over the last 11 months they have gone out seven weeks, and that includes the 20,000 pounds that they were allowed to catch over three weeks, which I talked about. It has become a tragedy.
The government will be responsible for what is going on there today. The fishermen are asking to go out and fish. The government should believe the fishermen when they say that there is more fish out there. They are not saying there is a lot of fish. The government should believe the fishermen and allow them to go out and fish. The government should allow them the dignity to earn their living in that area. This was the healthiest area in all of Nova Scotia. That should not be why it is being sacrificed.
I say to the government and my colleagues here in the Flouse the tragedy that is happening down there today should not be happening. It is departmental officials who have closed the minds of the ministers involved in the east coast fishery. I do not think there is anyone there who would say that the fishermen have not tried to present a valid proposal on how they would fish for the rest of the year, as well as taking the caution on mesh size and other things into consideration.
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With the news today that the northern cod stocks are even lower, there will be an increased effort by National Sea and the big guys to put more concentration in the Scotia-Fundy. You will see that it cannot be done. National Sea and Fishery Products have to be encouraged to go and get rid of the foreigners within the 200-mile limit. We have to encourage a good marketing system for the underutilized stocks that we have not been able to use and market up until now and which we have allowed the foreigners to come and fish.
I understand the minister will be in Halifax tonight. I do not know why he will be in Halifax tonight. I hope it is to meet with the fishermen who are sitting in at those offices in the areas that I mentioned. I do hope that he will go down and meet with them. It is long overdue.


Mr. Joseph Volpe (Eglinton - Lawrence):: Mr. Speaker, I too rise to speak against this bill and to offer my views contrary to the request to borrow $25.5 billion to finance a budget that in my view is predicated on some fundamentally, radically different views and concepts on economic and fiscal management imperatives that the government has overlooked over the course of the last several years. It is now in the course of this budget, in the course of its economic plan for this coming fiscal year, imposing changes on the economic and social contract of this country that has until now existed between the federal government and Canadians everywhere.
It is important to keep in mind that when we are talking about borrowing that amount of money in order to carry out a plan it is a plan that should meet the needs of Canadians. Yet some of the principles that are being addressed by the government are in direct opposition to the interests and needs of all Canadians.
For example, some of those basic principles that the Tories have ignored over the course of the last several years in office-some would say it has been much too long, but that would be too partisan and I do not want to engage in that-is the concept of mobility of all Canadians from one area of the country to another while at the same time maintaining an accessibility to government services provided by the federal government wherever they be in Canada. I speak of the provision of an equality of opportunity for all Canadians no matter where they live.
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The other principle is that all Canadians have the right to enjoy the benefits which accrue to them as citizens of this country, again regardless of the region from which they originate or the region in which they choose to live.
Finally-and definitely it is not the last point but it is the one that I want to concentrate on-is the fact that all Canadians have the right to have a government that recognizes under all the democratic principles which we hold dear that it be not only responsible but accountable for its actions.
What do we see instead? Through government policies over the course of the last six years we have seen a veritable onslaught-not a simple attack-on all those social programs which Canadians have fought so hard for and which they have become accustomed to accept as being part of the Canadian mainstream. I refer to the universality of social programs.
Many of my colleagues have documented the manner in which the government has attacked those programs that we have referred to as universal social programs. Over the course of the last two elections the governing party has identified these programs as being sacred trusts. Those programs have been eroded, I would say almost maliciously and viciously, by the budgets presented by the government.
For example, under these principles, workers, who by virtue of their contributions along with their employers' to the unemployment insurance fund, could expect to receive some sort of income maintenance in times of duress, not that they aspire to moments of duress. On the contrary, they see themselves as contributors and as those who play a role in the development of the economy and the future of the country. But there are occasions when there is a downturn in the market-place. In order for them to enjoy those five principles which I enumerated a few moments ago, they have the right to expect that their government, which was a third party to that unemployment insurance scheme, would also allow them to rely on a financial scheme that allows them to remain in their communities.
Fishermen, as my colleague pointed out, and farmers as well, have an equal right to remain in their communities with a guarantee of financial support from the federal government when times become tough. The alternative is much too unbearable. The alternative is that they take up their roots, leave, and a go someplace else. It continues that whole process of inexorable urbanization and deprives the country of the opportunity

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to exploit and capitalize on those resources with which nature has gifted all Canadians. I refer to land for farming, the enormous riches in the fishing industry, and, of course, our mineral and forestry resources.
If we do not leave a mechanism in place by which those Canadians can continue to employ their skills and their talents in these industries, then we are abandoning a fundamental character of the way that Canadians see the development of the economy of this nation.
Another principle that the government refuses to acknowledge and addresses in the most perverse fashion with this bill is that taxes not be regressive, that they apply equitably to all Canadians, and, above all, that they be fair.
I refer you, Mr. Speaker, to the debates over the course of the last several months with respect to one of the initiatives of the government. That one and only initiative, the GST, is going to reign its terror on all Canadians, unless of course the House and the other place can in some fashion cause the government to change its ways.
Finally, among some of those principles is also the one that is consistent and flows from the last one. It is that Canadians not be made to bear the burden of government fiscal and economic mismanagement. Those who are in a position to dictate the finances of this nation must also be accountable for their actions.
Yet, what do we have? With this bill, the government very callously, in a nonchalant, almost arrogant fashion, says: "Give us the $25.5 billion to meet the obligations which we incur as a government, as the representatives of the people." I want to stress the "representation of the people" component in that statement. If we consent to this bill-and I will not-we will become accomplices to the plan that the government is putting before Canadians in a most insidious fashion.
The government is violating those principles I have enumerated via its economic mismanagement. Through that economic mismanagement, it is drawing conclusions through its analyses that suggest that its way is the only way to correct all the faults and evils that visit us. In fact,
what we have is a forum for incorrect analyses upon which to base decisions.
Let us take a look at the record. The government has tried over the course of this budget to rectify an enormous problem presented by it over the course of the last six years. After six years of total indifference to what has been developing in the country on an economic basis, the government is now advocating an economic policy of high interest rates, budget cuts, and increased taxation to the point that we have counted 31 different direct increases of taxation by the government since 1984.
Why are we doing this? Why would anyone on this side of the House agree to such a bill as the one proposed now? "In 1984," the government is very fond of saying, "the former government left a public debt of $170 billion." I say, with them, "Shame." A mere six years later that public debt is now $380 billion.
It took from Confederation until 1984 to raise the public debt to $170 billion. Yet, it took the people opposite a mere six years to increase that $170 billion to $380 billion. That is spelled with a "b" as in intolerable.
The same government, which through its finance minister says: "That is not our problem", is the one which, in 1985, said in the House in front of all Canadians: "Do you know what we are going to do? We are such great managers that we are going to rectify all the problems of the past. We are going to present a budget that is going to decrease the deficit that stood at intolerable levels in 1984. We are going to decrease it to $18 billion by 1990."
We are at 1990. Thank you, Mr. Finance Minister, your predictions have come true again. The deficit stands at $30.5 billion. This is a great sign of economic management, of fiscal management. As long as the only version of reality that we hear emanates from that side of the House, then we are faced with the prospect of simply saying: "No, no. Enough is enough."
On the basis of the presentations of reality by the Minister of Finance and the government, the minister says: "The only way that we are going to pull up our socks and make Canada more competitive, make workers
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more productive, and restore a sense of decency and proper fiscal management to our finances is through high interest rates."
The prime rate yesterday was 14.75 per cent. The finance minister does not see in the short term a diminution in that rate. In fact, yesterday, the C.D. Howe Institute stated that it takes at least two years for a tight money campaign to have a marked impact on inflation. It suggests that Canadians will be lucky to see any marked improvement before the end of 1990. What else is new? We have been seeing a steady climb in interest rates over the course of the last three years because the government says: "We have to protect the dollar. We have got to get the dollar at an extremely high rate. We have to attract foreign investment and we have got to develop growth and dynamics through foreign investment".
That money is not being attracted to the manufacturing industry. The high interest rates may be maintaining a flow of foreign capital, but it is not going into the manufacturing industries that suggest that foreign capital is confident that the Canadian economy and the dynamics of the Canadian market-place are such that we should have more and more investment, that the tools for growth are there and that they are developing and that the opportunities for expansion and for consumption are actually what the market-place would say is appropriate for our investment and our confidence.
The Minister of Finance says we have to maintain foreign confidence. I do not know how we do that. You will never guess that what he is talking about, Mr. Speaker, is simply that the high interest rates will allow his government to continue to attract foreign money to finance a debt that he has created and a deficit that he is incapable of reducing.
Thinking Canadians have a different version of the way the world is unfolding in Canada. They understand the need to maintain a low level of inflation. What they also understand is that the primary source of inflationary pressures are created, not by consumer spending, but by government action: taxes, high interest rates, postal increases, tuition increases, transit increases, communications increases, transportation increases, all of which are a direct result of government fiscal mismanagement and not as a result of consumer spending. If anything, what it does is decrease consumer spending. I think that
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the average Canadian is much more responsible than the Minister of Finance and his cabinet colleagues who have devised an economic plan for the country.
Most Canadians recognize that under those circumstances-and they do it in an almost suppliant fashion, because the Minister of Finance is one to beat his chest and say he is the only one who is right-a high interest rate policy is perhaps the wrong tool with which to fight inflation.
Some would suggest that perhaps the government should become more responsible in the ways in which it handles its expenditures and raises its revenues. Even the Treasurer of Ontario, Mr. Nixon, says that interest rates must come down in order to avoid an even deeper slowdown than the one that is occurring throughout all Canada. He makes reference to the fact that the rate of inflation today is not to be compared with the rate of inflation of 12 per cent or higher that we saw some eight years ago. A lower interest rate and a lower dollar will make the Canadian economy much, much more competitive.
If we are going to talk about what we should be doing with this particular bill, then we should be taking a look at the kind of economic policy and fiscal plan that the government could have in place that would attract Canadians to its side and to say: "Yes, we agree, we should expend money in order to carry out that plan".
The government is requesting $25.5 billion today. If we were to agree, then Canadians would be financing the Tory government's disregard for the right of Parliament and all Canadians to debate in a serious context all those important economic and fiscal policies that impact on the social programs and the economic agendas, the contracts, both explicit and implicit, that Canadians have with their federal government.
Our position is that we cannot possibly support this bill because, in so doing, we would be undermining the fundamental social principles of Canada.
I am sorry that my time is up. I will take a leaf out of my colleague's book and suggest that perhaps we might continue through the period for questions and comments.


Mr. Wilbee:: Mr. Speaker, I sat here in amazement at times at what I was hearing. I wondered just where the hon. gentleman was sitting because of some of the statements that he made.

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As I think back over the voting record of his party over the last year and a half, I really do not see any assistance that it has given to the Government of Canada in meeting the problems that he has outlined.
I think that I should also remind the hon. member that when the present government took over in 1984, we were spending $16 billion-that is with a "b" and not with an "m"-more than we were taking in in taxes and, as a result, the deficit was increasing by that rate. Of course that was being added to the debt. At the present time, we have a $9 billion surplus in that account, if we do not add on to the debt. The debt is one of the major problems that we are facing in Canada today. We need to point out that 80 per cent of that debt is as a result of interest on the debt that was left to us by the previous administration. Only 20 per cent of that amount is new debt.
With the opposition of the parties and also of the Liberal dominated other place to such things as the UI reform, our government is working very diligently under difficult circumstances. If this bill is not approved, it will cost the Canadian government another $1.75 billion annually.
When the member states that the government is doing nothing, I believe that it is doing a great many valuable things. We all recognize that we can reduce our deficit by increasing taxes and he accused us of doing this. I should also point out that many of these tax changes that we have had were advocated by some members of his party. In other words, we shut down many of the tax loopholes which the wealthy people were using to escape paying taxes. We have put some taxes on large corporations that previously were not paying taxes. Certainly, we have increased some taxes, but I believe that the tax system is much fairer than previously.
We have cut spending. I would ask the hon. member to give me one example of his support for any expenditure cuts which this government has made. I cannot think of any. We have made a lot of cuts in expenditures. It seems to me that the opposition has opposed every single cut that we have recommended.
The government has cut its spending. We have reduced the size of the Public Service. A third way we have reduced our deficit and our debt is by economic stimulation. Since this government has taken over, there have been 1.6 million new jobs created in Canada. This obviously means that is a great deal of expansion in Canadian industry. Many of these jobs are employing women.
I would like to hear the member give an example of the types of deficit reduction which our government has introduced which they are supporting. We have heard nothing but criticism and negative ideas, and I would like him to tell the House just what they would support in the way of deficit reduction?


Giuseppe (Joseph) Volpe: Mr. Speaker, I hope you will allow me extra time in order to satisfy the member from British Columbia. Since he has asked a comprehensive question, I do not want him to leave this House without getting all of the answers.
He has been listening diligently. I know that he wants to understand what the impact of some his government's initiatives are. I have already pointed to the increase in the public debt, which he has acknowledged. The member spoke about job creation. Seventy per cent of the jobs that this government is taking credit for are low paying service sector type jobs.
I do not think he wants to suggest that many of those jobs go to women. We are fighting for pay equity and for improving the lot of all people in Canada, including that of women, who are capable of doing a lot more than some of those low paying service sector type jobs that he would foist upon them.
I have pointed out in the House-and the hon. member was here to listen-that the Canadian economy has lost, not gained, nearly 200,000 jobs over the last year. Both the Minister of Finance and the Prime Minister have admitted this. That is under its major initiative of free trade. Those are not my statistics. They come from the hon. member's caucus colleagues, the Prime Minister and his Minister of Finance. Show up at caucus and you will get that information.
What is worse, under the initiatives of this government, over the course of the last two years the Canadian economy has lost 180,000 jobs in the manufacturing sector. Those were permanent jobs that paid well over $10 an hour. By providing that kind of employment to Canadians, it gave this government an opportunity to raise revenues from people who were productive.
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I do not know whether this member reads what is going on in his country or whether in caucus they discuss the realities of this world. In Toronto, which is supposed to be the mecca for industrial expansion and growth,
35,000	construction workers with an average salary of somewhere between $25 and $30 per hour are now unemployed. They were not low paid service sector type jobs that the member takes great pride in saying that his government created. They were products of a highly trained, highly educated system in southern Ontario which realized that, in order to meet the needs of a new economy, we have to produce these kinds of people.
Can you imagine the amount of revenue the Canadian government would garner from taxing those people who have salaries of $25 to $30 an hour, but who are now unemployed, thanks to your economic policy and fiscal mismanagement. The are unemployed and the member wants to know what is going to happen to these people.
The member states that the government is going to change the unemployment insurance system. He is talking about taking $2.9 billion of government moneys from those people who have contributed right up to this point. He is talking about a 30 per cent increase in bankruptcies in Canada. This is the highest level since the recession eight years ago. He takes great pride in that. I do not understand it. When I said earlier that the government opposite had a distorted view of reality, I did not think it had permeated down to the back benches.
Complete industries are being wasted away. Over the course of the last several weeks, we have had example after example. The major furniture manufacturers of southern Ontario and southern Quebec are moving their plants to the United States. Textile industries are closing their doors one after the other. Yesterday, one of the oldest carpet manufacturers in southern Ontario was closing all of its operations and moving down south, causing jobs to be lost. All of that is as a result of the high interest rate policy, the FTA, and a high dollar which decreases the opportunity for Canadians to engage in a productive environment here in Canada.
If the member is suggesting that the government is saying that the best thing Canadians can do is to close down shop and move down south, and we are going to make sure that we provide the fiscal environment to
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cause that as an inducement, an encouragement, a push factor, then he is right. But I will have no part of that. That is not the Canadian way.


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated. On debate, the hon. member for Winnipeg Transcona.


Mr. Bill Blaikie (Winnipeg Transcona):: Mr. Speaker, while we are talking about the deficit, I think members might be interested in being reminded that the real source of the deficit over the years has not been what the government spent and what the government collected in the form of taxes, but what the government did not collect in the form of tax expenditures, that is, those moneys which governments over the years could have collected, but which they forfeited in the form of a variety of tax shelters, loopholes, depreciation allowances, credits and various other schemes by which the government used the tax system to provide what it called incentives.
I recall when I was first elected to this place 11 years ago next week that the Conservative government of that time, under the leadership of the present Right Hon. Secretary of State for External Affairs, lived up to a campaign promise that it had made and provided a tax expenditure account which previous Liberal governments had not been willing to do. It provided Parliament with an account of the money that was forfeited in the form of tax expenditures. If I remember correctly, in 1979 the deficit was $14 billion and the tax expenditure account was $32 billion. So in that year alone we see that the government did not collect an amount which was over twice what the deficit was.
It is this kind of policy which accumulated over the years a deficit and a tax expenditure account which was much greater than the deficit for that particular year. Of course, that particular Progressive Conservative government was defeated in the fall of 1979 and the Liberals thereafter reverted to their policy of not publishing a tax expenditure account. By 1984 the Conservatives had lost their fiscal idealism and they have not published a tax expenditure account since their re-election in 1984.
I want to talk a bit about interest rates which is one of the things that concerns me. By virtue of the high

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interest rate policy of the government, we are entering into a period of random cruelty brought on by what I would call a kind of chronological roulette. There are many families in Canada right now who are sitting at or near the end of a three-year or a five-year mortgage and who now have an interest rate that they have found a way to live with, even though it may have been onerous.
I heard from a constituent yesterday who said that he was coming to the end of a five-year mortgage. I believe he said that his interest rate was 10.5 per cent, which is still 4.5 per cent over the 6 per cent over 25 years which a previous generation had to pay for their houses. In any event, 10.5 per cent does not look so bad these days.
This person's five-year mortgage is coming to an end. He went through this in the early 1980s. He almost lost his house, and has spent the last several years recovering from the early 1980s and now faces once again the prospect of losing his home, only now of course losing it after another decade of investment which makes it all the more threatening.
This is happening all over the place. It is one of the reasons why I will never ever be a fan of the kind of economic system that we have in this country. Any economic system which by virtue of some macro-fiscal policy that a Minister of Finance applies from time to time because in his wisdom or lack of it he thinks will have an effect on inflation, any policy that can just like that throw people out of their homes because they are unable to meet the new payments demanded of them in a renegotiated mortgage situation, is to me on the face of it so morally unacceptable that I cannot understand or fathom why people would want to come to its defence. If the Minister of Finance does not wake up, this is what is going to happen to more and more families, particularly young families in Canada.
We often hear pro-family rhetoric from Conservative members. Indeed, we hear it from Liberal members who belonged to a government in the early 1980s that pursued exactly the same policy. It is these kinds of economic policies which are more destructive to the family than anything else that one can imagine. It forces mother, father and everyone who can possibly get a job to work in order to try and meet these new economic circumstances. This is the rat race gone wild for a lot of people.
It is about time that the Canadian people made it absolutely clear to the Minister of Finance that they do not want to have anything to do with the high interest rate policy and that they are willing to take their chances on a little bit of inflation, if that might be the result. I am not even sure that it would be, but that is the prevailing theory.
Another thing, of course, with respect to interest rates is that the reason offered for high interest rates is so Ontario-centric. We have high interest rates in order to cool down the economy in southern Ontario, and the rest of the country be damned. If that means that farmers in western Canada and other small business persons and families in the rest of the country have to go under in order to cool the Ontario economy down, well then so be it.
It is no wonder that we have regional alienation in this country when that is the case and when it is so clearly seen to be the case. When farmers at this critical point have heard that the price for their wheat is going to be low once again, at a time when they are facing drought, when they face continuing high costs for fertilizers and pesticides, and increased competition from the United States and the European Community, and when they see the whole agricultural system moving in a direction which would remove even those supports which they now have, on top of all this, they have to suffer the high cost of money that this government is inflicting on them through its high interest rate policy. Many of them are not going to be able to afford it. They are just simply going to go bust and walk away.
Every time a farmer leaves the land, every time a family has to move into town or particularly to a big city, a little bit of Canada dies, a little bit of the Canada that the Conservative party said for decades that it valued. Yet, this is the little bit of Canada which time and again the Conservative party is sacrificing to the values of the market-place. In so doing, it is betraying its own people, betraying its own tradition, and betraying the very soul of Canada.
The other thing that needs to be said, and I do not think has been said nearly often enough, is that the high interest rate policy is related to the free trade agreement.
I was on the External Affairs committee and travelled with that committee studying the elements of the deal in the fall of 1987. I recall a meeting here in Ottawa. The former minister of finance for a Liberal government, Mitchell Sharp, appeared before the committee. He said to the committee members, but particularly to the
May 15, 1990

government members who were supporters of the FTA: "How long do you think you will be in a free trade agreement with the United States before you will have to accept, either directly or indirectly, some form of regulation of the value of the Canadian dollar? The United States is not forever going to allow Canadians to export without restriction into the United States, if that exporting is taking place in the context of Canadian exporters having the advantage of a much lower Canadian dollar".
I often remember those words when I see what is happening now. I ask myself why this mania, why this obsession on the part of the government to maintain high interest rates and in so doing maintaining a high dollar? Perhaps it is because the integrity of the deal depends on maintaining the dollar at least at a certain level.
So what are Canadian business people and Canadian exporters up against? They find that the free trade agreement is not everything it was cracked up to be. The Americans are still able to harass our exporters and make life difficult for them. They have lost and are continuing to lose the advantage of the lower dollar. On top of losing the advantage of the lower dollar, they are now subjected to the disadvantage of the high cost of money related to the high interest rate policy of this government. Therefore, they are in double, even triple jeopardy as a result of the agreement. The other dimension of the agreement is that it has made it so much easier for Americans to operate in Canada and has also created a situation, as we all know, in which many Canadian companies, rather than face this array of obstacles, have decided to move their operations south and be done with it all.
This is as a result of a free trade agreement that was supposed to be the best thing that ever happened to Canada. I think we will see over time that it was one of the worst things that ever happened to Canada, but that is something that only time will tell. I think the time that has passed so far has told us this, but only if one is willing to suspend the kind of uncritical belief in the agreement that government members still have.
Government Orders
What lies ahead, Mr. Speaker? Well, it appears that we are destined to have a free trade agreement with Mexico. The government stated that we do not have to harmonize with the United States, but we find that we are harmonizing with the United States. One of the first things that came along in this Parliament after the free trade agreement was signed was a bill in respect of unemployment insurance that, just by coincidence, made our unemployment insurance system a lot like the American system. Pure coincidence, of course, because the government maintained during the campaign, and this was its biggest lie during the campaign, that there would be no need to harmonize our social system with the Americans. Anybody who has studied economic integration, wherever it has taken place, will tell you that one of the end results of economic integration, wherever it takes place, is the harmonization of social systems, labour laws, et cetera.
It is happening in the European Community in preparation for the single market of 1992. Everyone there is working on what they call the social charter; they are working for what they call a social Europe. They are saying that if we are not going to have any barriers, if we are going to have a completely integrated and single market in Europe, then there has to be a basic agreement about the ground rules. There have to be some ground rules about social security, minimum wages, labour market conditions, and a socially just basis on which this competition can occur.
This is something that the government refused to admit when it was bargaining and negotiating Canada's way into the free trade agreement. Every time critics of the agreement said you are going to have to come to some kind of harmonization-and we Canadians stand to lose in that harmonization-or if you do not have harmonization in the short-run, our system is such that we will have to unilaterally give up certain elements of our social system in order to remain competitive in this new situation that we have entered through the free trade agreement.
I began this conversation about Europe at the point at which I mentioned the possibility of entering into a free trade agreement with Mexico. It would be bad enough if we had to harmonize our social policies and our labour market policies with the United States, which is already a more exploitive and less socially just country than our

May 15, 1990
own, but it would be a nightmare if we had to arrive at that kind of harmonization, no matter how long it took, with Mexico. Then we would really be at a disadvantage with both the United States and Mexico calling on us to reduce our view of what a just economy was like.
This is what is at stake in the free trade agreement. With respect to Mexico, it may already be there in the form of the Maquiladora corridor, a free trade corridor which exists between the United States and Mexico and which we still have no assurances is not a place where Mexican goods, manufactured at Mexican labour prices, are finding their way into the United States and into Canada as American goods. This is another element of the free trade agreement which we found very scary at the time and still do.
I see that we are nearing one o'clock. I wish to make one final remark. One of the other things that we said about the consequences of the free trade agreement would be that over time it would erode our health care system. It is no coincidence that in the last little while we have started to have various ministers of health, most notably from Quebec, but also others, saying that we are going to have to go to user fees. We are going to have to go to more of a user-pay kind of health care system.
I do not think that this is a coincidence. It is related not only to the free trade agreement, but to the fact that this government is forcing the hand of provincial governments with respect to health care by its continued unilateral reduction in the federal commitment to health care.
As the NDP health critic at the time of the debate on the Canada Health Act in April 1984,1 said that through cut-backs in federal commitments we would eventually arrive at a time when provincial governments would, for fiscal reasons, begin to dismantle health care systems in their provinces and this is beginning to happen. Unless we have a renewed debate about the future of health care in this country and the future of medicare, then piece by piece, province by province, user-fee by user-fee, privatization by privatization, we are going to lose our health care system and it will all fit perfectly into the long-term plan by which the American multinational health and hospital companies can find their way into the Canadian market-place.


The Acting Speaker (Mr. Paproski):: Before I call it one o'clock, the hon. member will have 10 minutes for questions and comments once we begin debate again. He has used up his 20 minutes in debate.
It being one o'clock, I do now leave the chair until two o'clock this day.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.

Ms. Catherine Callbeck (Malpeque):: Mr. Speaker, CFB Summerside is scheduled to close in 1992. Next spring the anchor squadron, 413, will be moved to Greenwood, Nova Scotia. This squadron should remain in Summerside.
A retired major who has been actively involved with the fight to save the base supports this suggestion. He states that lives will be placed at greater risk if the squadron moves.
This is a good idea for a number of worth-while reasons. The financial benefits are there, the medical benefits are well known, and it is the best location.
In fact, an entire paper entitled the Hopping-Naylor report covers every beneficial aspect of maintaining the squadron at the base in Summerside.
I whole-heartedly support maintaining the 413 search and rescue at Summerside. I urge the federal government to offer its endorsement of this excellent suggestion immediately.
* *


TOURISM
Mr. Ross Stevenson (Durham):: Mr. Speaker, this is National Tourism Week and an excellent occasion to advise the House of a spectacular new $100 million resort which is in the planning stages for the town of Newcastle, Ontario, in my constituency of Durham.
Called Newcastle-on-the-Lake, this resort will be situated on 100 acres along the northern shore of Lake
May 15, 1990

Ontario. The resort is to have two 225-room hotels, 1,100 luxury condominiums, conference and recreational facilities, as well as a marina.
Newcastle-on-the-Lake promises to be a most imaginative project. It will provide a whole new dimension to the town of Newcastle, while also greatly enhancing the future of this area and the way the area is developed.


HOUSING
Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, Canadians are finding it increasingly difficult to locate affordable housing.
Yesterday, the mayor of Vancouver, councillors, representatives of labour, co-ops and social housing groups came to Ottawa to meet with the housing minister only to be told that there were no funds to deal with Vancouver's housing crisis.
RRAP funding which would rehabilitate downtown rental housing has been cancelled. Funding for social housing has been cut from 5,000 to 1,700 units with only 150 units last year for Vancouver.
In addition to reinstated federal funding for rental housing, co-ops and social housing, Vancouver needs a special fund for transition houses and affordable housing for new megaproject areas.
I call on the minister to develop a national housing strategy with adequate funding to counteract homelessness in our nation, to build native housing, and to develop affordable housing in the big cities of Canada.
A pre-election symposium in Vancouver will not build housing.
 * *


GRAIN TRANSPORTATION
[Stage Direction]
Mr. Joe Comu/./.i (Thunder Bay-Nipigon): Mr. Speaker, the mayors of the Great Lakes and St. Lawrence Seaway ports will be meeting in Milwaukee, Wisconsin, this week to address problems of mutual concern.
Naturally the environment, zebra mussels, Great Lakes water quality, oil spills on the seaway, emissions from pulp and paper plants, and water levels in the Great Lakes will be thoroughly discussed and thoroughly aired.
However the key will be the economic future of the Great Lakes ports and the viability of the St. Lawrence Seaway. To this end we ask this government to change the Western Grain Transportation Act which unfairly distorts the distribution of grain in Canada. This inequitable distribution is hurting shippers and the entire seaway system.
I ask this government to listen to the provinces including British Columbia, Alberta and northern Ontario, the shippers, the unions in this country, and the farmers. They all come to the conclusion that the Western Grain Transportation Act must be changed now. The future of all Great Lakes ports, of all shippers, and the true viability of this seaway will be harmed unless it is changed.
* *

Mr. Guy Saint-Julien (Abitibi):: Mr. Speaker, a study by the Department of External Affairs and International Trade has revealed that less than a year and a half after it came into effect, the free trade agreement has already generated investment worth $3 billion in Quebec, creating over 1,000 jobs.


Mr. Young (Gloucester):: It has been disruptive! That is what free trade has done!


Guy St-Julien: According to Normand Villeneuve, who heads the department's branch responsible for liaison with the provinces and the private sector, these figures show that Americans have invested more in Canada than we have in the United States. The score is: $7 billion for the Americans to $6 billion for Canadians.


M. Douglas Young: Talk to the workers at Stone-Consolidated about what is happening in the pulp and paper sector!


Guy St-Julien: Mr. Villeneuve mentions the following companies that invested in Quebec as an example: Alumax aluminum refinery, $1 billion; Abbott Laboratories, $12billion; Nikon Canada, $4 million. However, Mr. Villeneuve feels that so far, Canadian companies have been slow to react.
Mr. Speaker, thanks to the free trade agreement, Canada is a winner, but no thanks to the Liberals opposite.

May 15, 1990


PETRO-CANADA
Mr. Scott Thorkelson (Edmonton - Strathcona):: Mr. Speaker, the Petro-Canada International Assistance Corporation has withdrawn its scholarship support for the University of Alberta Summer Petroleum Program.
Petro-Canada arrogantly withdrew its support without notifying the University of Alberta, forcing the cancellation of the program. The Summer Petroleum Program has trained over 300 people from developing countries in the last seven years.
It has trained people who have come back to Alberta to buy petroleum equipment and technology.
Meanwhile, Petro-Canada is providing $10 million over five years to an institution in central Canada, quadruple the support that the University of Alberta has received and to an institution over 2,500 miles from the oil patch.
I condemn the arrogant, smug, self-satisfied bureaucrats in the Petro-Canada International Assistance Corporation, centralist bureaucrats who did not even have the common decency to notify the University of Alberta.
Western Canadians deserve better than a slap in the face.


SCOTIA SYNFUELS PROJECT
Mr. Dave Dingwall (Cape Breton -East Richmond):: Mr. Speaker, Cape Breton is a region that has experienced more than its share of economic uncertainty. The Scotia Synfuels project could mean a revitalization of the island's economy. This project promises to create at least
2,000	permanent jobs for industrial Cape Breton and the north eastern mainland of Nova Scotia.
This is a project that is environmentally sensitive as it will utilize the most environmentally advanced fuel system for power plants. Private investors are assuming the major risk here and not the taxpayer. This project will provide more than $800 million in corporation taxes.
The Scotia Synfuels project will build on the strength of the people of Cape Breton and on the strength of its natural resources, namely, coal.
On April 18, 1990 the Nova Scotia legislature passed an all-party resolution in support of this project. Likewise, yesterday, the mayors and wardens of all of Cape Breton lent their unqualified support to this project.
This project, however, needs the approval of the federal government for the Cape Breton investment tax credit and the incentives of the Atlantic Canada Opportunities Agency.
I call upon the Government of Canada to recommend this valuable project as this is a project that will bring economic growth to the area and give Cape Bretoners hope for a future.


ONTARIO PROGRESSIVE CONSERVATIVE PARTY
Mr. Terry Clifford (London -Middlesex):: Mr. Speaker, as the winds of democratic reform continue to blow throughout the world, it is refreshing to see Canadians right here in Ontario initiating innovative improvements to our own democracy.
The Ontario Progressive Conservative Party deserves heartiest congratulations for allowing all of its members a direct vote in electing Michael Harris, MPP for Nipissing, leader of that great party.
Congratulations are also in order for Dianne Cunningham, MPP for London North, for waging a tough, classy campaign. All members on this side of the House, I am sure, join with me in wishing Mike Harris well as he begins his important role as leader of the Ontario Progressive Conservative Party.
This Progressive Conservative initiative serves as an excellent example of democracy in action, not only for this House but all legislatures across the country.
Freedom seeking people everywhere can learn an important lesson from this exercise, that once attained, democracy must evolve in order to flourish. In Ontario, democracy is flourishing.
May 15, 1990


ACCESS TO INFORMATION
Mr. Ross Harvey (Edmonton East):: Mr. Speaker, I want to say a few words about a terrible addiction plaguing our society today: the government's addiction to secrecy.
As the Prime Minister put it in 1984:
The more the government can have of it, the more it wants of it.
In fact the government wants secrecy so bad that the Minister of Justice wants to change the fee structure for access to information, implementing some new charges and increasing existing ones.
Why? The deficit made them do it. At least that is what they say.
I have a suggestion for the minister. Why does she not put meters in the limos she and her cabinet colleagues constantly use and have waiting around the front door for them, instead of putting meters on Canadians trying to get access to government held information.?
As the Prime Minister said again in 1984:
Secrecy and stonewalling have become a habit with the
government. We will never break the habit until we change the
government.
He was right then. Do you know what? He is right now.


GOVERNMENT EXPENDITURE
Mr. Ken James (Sarnia - Lambton):: Mr. Speaker, over the past few weeks I have made a number of statements calling for more leadership in our restraint of government spending. Such restraint will take some of the pressure off monetary policy in fighting inflation and create greater potential for lower interest rates.
On this very theme I recently read with considerable interest a speech by one of our deputy ministers. I could not help but notice a reference to Public Service 2000, which is to be the first real overhaul of the Public Service in more than 20 years.
As part of this review were all members aware that if PS 2000 can streamline the process and improve public
sector productivity by even 10 per cent, we will save something like $1.7 billion per year just on the wage bill?
I encourage all members of this House to get behind this important initiative and call upon this government to undertake further measures to ensure the best value for Canadians' tax dollars.


FISHERIES
Mr. Fred J. Mifflin (Bonavista-Trinity-Conception):: Mr. Speaker, as you know, the Atlantic fishery is in a crisis. We discovered yesterday that the stocks were not as good as we thought they were. Our entire region faces a devastating long-term deterioration of the fishery based economy. It is affecting hundreds of communities and tens of thousands of citizens.
I would like to remind the House that the fishery sector in Atlantic Canada is equivalent in economic terms to the auto industry in central Canada and to the grain sector on the prairies.
One aspect of this situation requires the Prime Minister's immediate personal intervention. I refer now to the discussion with the European community plus Europeans in other countries concerning their violations of internationally established quotas and their consequent destructive overfishing practices on the nose and tail of Canada's continental shelf. This issue must be resolved quickly.
Only the international stature of the Prime Minister's office will give it the priority and the high level attention necessary for such a resolution. We urge the Prime Minister to take a personal interest and to participate now in these negotiations.


EXTERNAL AFFAIRS
William Alexander (Bill) Blaikie: Mr. Speaker, I would like to take this opportunity to call on the Soviet Union to recognize that the demands which President Gorbachev is making of the three Baltic republics are unrealistic. It is unrealistic to expect that the Baltic republics should be treated in a way similar to other republics, that is to say that they can only secede through the law which has been set up for secession.

May 15, 1990
Oral Questions
I think it would be in the interests of everyone, both East and West, and in the interests of Mr. Gorbachev's reputation as a democrat and a reformer, to recognize that the Baltic republics are different and to deal with them accordingly.
In the same respect, the Baltic leadership should be prepared to deal reasonably with the Soviet Union in order to deal with its economic, military and other security needs.
In the meantime this senselessness of the blockade should stop, particularly the blockade with respect to medical supplies. The situation in Lithuania is worsening. There is a shortage of insulin, syringes and other important medical supplies. The first thing the Soviet Union should do in addition to sitting down at the table with the Baltic leadership is to stop the blockade, particularly the blockade of medical supplies. The international community should do what it can to come to the aid of Lithuania with respect to medical supplies as well.
* sfe *


FISHERIES
Mr. Peter L. McCreath (South Shore):: Mr. Speaker, the Atlantic Fisheries Adjustment Program represents an important first step in the government's response to the current difficulties in the Atlantic fishery.
Funds allocated for additional research and more effective management will benefit all regions of coastal Atlantic Canada. The $147 million in diversification funds will provide incentives to reduce our dependency on traditional fisheries. The programs and community development funds targeted for communities specifically impacted by the northern cod decline will obviously benefit those communities.
I trust, however, that the government does not consider that with these announcements its job is done. Communities which have suffered plant closures for causes other than the decline of northern cod do not understand why their specific needs were not addressed in the adjustment component of the aid package.
I urge the government to get on with establishing community development funding for these communities as well, in particular, for the communities of southern
and western Nova Scotia such as Port Mouton, Clarks Harbour, Shag Harbour and Woods Harbour.



ORAL QUESTION PERIOD


Hon. Herb Gray (Leader of the Opposition):: Mr. Speaker, I have a question for the Prime Minister. I understand that the Prime Minister will meet today with the head of the Spanish government, President Felipe Gonzales.
Experts have identified overfishing by the Spanish and Portuguese fleets as an important cause of declining fish stocks off Atlantic Canada.
Will the Prime Minister discuss this important issue with the President of Spain today? Will he obtain the assurance of the president that Spain will accept lower fish quotas and not continue its overfishing which is causing serious and possibly permanent damage to Canadian fish stocks?


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, I had meetings with the President of the Government of Spain last night and again today dealing with the important question of the fishery. We will be meeting a little later on this afternoon and again tonight.
I have expressed very clearly the point of view of the people of Canada and the government of Canada and have found in President Gonzales a very constructive interlocutor who recognizes full well that important conservation measures must begin if there is to be the preservation of that vital resource.
I am happy to advise the House that the conversations that I have had with the Spanish President in this important area have been what I think my hon. friend would qualify as thoughtful, very constructive and, I am sure, beneficial for those who work in the fishing industry in Canada.


Herbert Eser (Herb) Gray: Mr. Speaker, I would like to ask the Prime Minister why, in the course of his talks, he did not receive the assurance that Spain would immediately stop overfishing and start
May 15, 1990

working together with Canada and other countries to ensure the long-term survival of our fisheries. Why did he not receive any assurances in those terms?


Martin Brian Mulroney: I just want to inform the Leader of the opposition of the constructive attitude taken by the President of the Government of Spain. The same approach was taken by Vice-Chairman Marin of the European Economic Community last week, all of which will be helpful in initiating a realistic process to protect a resource that is so important to Canada.
I think the hon. member knows perfectly well this is not a problem that can be solved overnight. However, the attitude taken by Mr. Gonzalez will be a very positive contribution to the ultimate settlement of a problem that has gone on far too long in this country.


Herbert Eser (Herb) Gray: Mr. Speaker, the Prime Minister should know there is a crisis in Atlantic Canada and that crisis is in the fishery. Entire towns are being shut down, fishermen and plant workers are losing their jobs and still this government lets foreign fleets continue to deplete our fish stocks.
It is not always clear that these countries realize the extent of the damage their fishermen are causing to our economy.
Will the Prime Minister, at the very least, press for continuing direct discussions with Spain on an ongoing basis to seek an early resolution to the problem of overfishing by foreign fleets? He said this matter has been going on too long. Why does he not do something right now when the President of Spain is visiting our country?


Martin Brian Mulroney: Mr. Speaker, what would the Leader of the Opposition want me to do, arrest him?


Some hon. members:: Talk to him.


Martin Brian Mulroney: He says talk to him. That is exactly what we have been doing. We have been talking directly, bluntly and effectively, as opposed to suggesting, as we heard in this House in the past, that the Canadian
Oral Questions
government dispatch instruments of war to clear people out of the gulf.
This fishing has been taking place outside of the 200-mile limit. The Government of Canada is pursuing the question of conservation outside of the 200-mile limit very vigorously. We have made the case very carefully to all members of the European Community, to the commission itself and to the President of Spain that obviously the European Community must accept the NAFO regime. It is the only way that conservation can proceed so there is fish left there for all involved and particularly for Canadian fishermen.
Surely the Leader of the Opposition knows full well that this has to be resolved in precisely the manner that we are resolving it now and not by gunboat diplomacy suggested by a party that really has neither guns nor boats.


GOODS AND SERVICES TAX
M. Douglas Young: Mr. Speaker, my question is directed to the Minister of Finance. The private sector and Canadian consumers are very much aware of the problems connected with the GST. My question is as follows: Will the government finally admit that if the GST is introduced as proposed, it will be an administrative nightmare? Is the Minister of Finance now prepared to admit in this House that he is changing the rules for collecting the GST?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, I reject the expression that is used by the hon. member. We have said, though, on a number of occasions that we are looking at various ways of continually simplifying the process, particularly for small business.
We have two means of streamlined accounting in place. We have means by which small business can pay over a less frequent time period than larger businesses. We have put in place ways that small business can reduce the cost of point of sale equipment like cash registers. We have a one-page form for the GST. We have a number of other things we are working on with the provinces to reduce the complexity and the compliance burden of the GST.

May 15, 1990
Oral Questions
I have always said that if there are ways that we can add to those means by which we can simplify the process we are quite prepared to look at them and consider them in a positive way.


M. Douglas Young: Mr. Speaker, the government is spending millions of dollars in propaganda that is disguised as straightforward answers regarding questions concerning the goods and services tax.
Will the government, in an honest and straightforward way, discuss in this place the changes that it is suggesting to people in private will take place to make the goods and services tax more palatable? If the government is going to distribute information such as this, why not discuss the changes it wants to make right here in this House and make sure we all know about it?


Michael Holcombe Wilson: Mr. Speaker, let me just make a few points on that. The finance committee of the House of Commons in the last Parliament recommended that we use a wide means of advising people what the GST is all about, how it affects them and how it affects the cost of living. That is what we are proceeding to do because a finance committee of the House of Commons asked us to do that.
The hon. member wonders why we provide this information. Just yesterday we had 6,300 phone calls from people asking for information about the goods and services tax.
The hon. member asks why we don't discuss it here in this House. We have had committee hearings, we have had the legislative process, we have had debate in this House. We have made a number of changes as a result of good, solid recommendations from the finance committee.
Unfortunately, my hon. friend did not participate in any of those positive recommendations. All that he said was to scrap the whole thing. He had no positive idea or understanding of what the process was all about. He was totally negative. This is the sort of thing that makes no contribution to the positive development of legislation.


ENVIRONMENT
James Ross Fulton: Mr. Speaker, my question is directed to the Deputy Prime Minister who is aware that three weeks ago Dr. Schindler, a professor at the University of Alberta, reported to the federal government that the proposed pulp industry regulations do not take account of the fact that dioxin is a known carcinogen and that those regulations do not reflect the expert evidence of the federal government's own scientists.
Since Dr. Schindler concludes that allowing discharges of chlorinated organic substances from new pulp industries should be prevented because of the risks to human health, will the Deputy Prime Minister assure this House that the government will redraft the regulations, taking account of the fact that dioxin is a known cancer-causing agent?


Hon. Frank Oberle (Minister of Forestry):: Mr. Speaker, my hon. friend knows that it is the intention to add over time to the regulations that were recently published limiting the pulp mills to certain harmful agents that are being discharged into the waters and air.
My hon. friend will be pleased when the full story is told. Yes, we are very sensitive to the potential of harm to human health as a result of some of these agents in the environment.


James Ross Fulton: Mr. Speaker, my supplementary question is for the Prime Minister. We are told we have to wait for The Green Plan, we have to wait on carbon dioxide emissions, we have to wait in relation to the greenhouse effect.
Three weeks ago Dr. Schindler advised the federal government that tens of thousands of Canadians are at risk now from dioxins, furans and chlorinated organic compounds. Dr. Schindler has warned that the regulations, as posed, will present a risk of increased heart disease and increased deaths from cancer to Canadians if they are implemented.
Canadians should not have to wait. Will the Prime Minister show some backbone on just one environmental issue? Will he bring forward regulations which recognize that dioxins are a cancer-causing agent and their release
May 15, 1990

Oral Questions
should not be allowed into the river systems and lakes of this country by the pulp industry? Just once, stand up.


Frank Oberle: Mr. Speaker, the pulp and paper industry has, over the last five years, invested $1 billion a year in making improvements to their plants.
Under the new regulations the industry will be required over the next three years to invest another $5 billion to $7 billion, the result of which will be a complete elimination of the emission of dioxins into the river systems.
My hon. friend should read the regulations that have been published and consult with people other than those whom he calls friends who give him a single vision of the reality of the situation.


Ross Harvey: Mr. Speaker, in his April 24 paper, Mr. Schindler writes:
In brief, hundreds of thousands of people in northern Canada could
be exposed to high levels of dioxins, furans and other toxic
chlorinated organic compounds in Canada -
There are currently no regulations governing dioxin emissions from pulp and paper mills. Lack of effective government action is almost guaranteeing tragedy.
My question to the Prime Minister, to the Minister of Forestry, to any minister is, when will the government implement dioxin emission standards for pulp mills to eliminate this widespread public health threat?


Frank Oberle: Mr. Speaker, my answer to this hon. member is the same as to his predecessor. To shout louder and to repeat untruths does not make a truth.
The fact is that action has been taken and the results will be evident. If the hon. member bothers to see what has happened and what will happen as a result of the new regulation, he will perhaps refrain from causing unjustified fear and perhaps destroying an industry that is the mainstay of the Canadian economy.


FISHERIES
Coline M. Campbell: Mr. Speaker, my question is directed to the Minister of Fisheries and Oceans and, in his absence, to the Acting Minister of Fisheries and Oceans.
The fishermen's proposals for groundfish allocations in 4X and 5 have been before the minister's department since last February. Last week the fishermen invited local politicians and officials from the minister's department to meet in Meteghan yesterday. There were over 500 concerned fishermen and plant workers and not one Department of Fisheries official.
Could the Acting Minister tell us why that insult was given to the people who have not fished in the last few months and who are looking for some type of proposal? Why was there not one department official? Surely, the government spends enough money on those people that one of them could have been there.


Hon. Elmer M. MacKay (Minister of Public Works):: Mr. Speaker, if I might be permitted to answer this question on behalf of my colleague.
I understand there has been extensive dialogue between the department and the fishermen who are understandably concerned about the situation in South West Nova. I can also tell my colleague that arrangements are being made that will result in a meeting next week between the minister and appropriate officials so that these matters can be fully discussed and the fishermen's demands and aspirations can be heard and dealt with.


Coline M. Campbell: Mr. Speaker, my supplementary is directed to the Prime Minister. There exists today a very dangerous situation in the southern end of Nova Scotia. Yesterday, provincial ministers and I, and others, met with the fishermen. There were no officials there. The fishermen would like to meet with the Minister of Fisheries and Oceans. The present minister of fisheries is attending a Seafood 2000 dinner tonight. I can assure you there will not be a fisherman from that end of the province invited to the dinner. I know the government is paying for some of it.

May 15, 1990
Oral Questions
Would the Prime Minister instruct his Minister of Fisheries and Oceans, in light of the dangerous situation at all those DFO offices right now, not to leave Nova Scotia without meeting with some of the representatives of those fishermen?


Martin Brian Mulroney: Mr. Speaker, I think most members of the House of Commons would acknowledge that since his swearing in as Minister of Fisheries and Oceans, the minister has spend an enormous amount of time meeting with fishermen in all parts of Atlantic Canada. I personally had the occasion to-


Some hon. members:: Oh, oh!
Mr. Speaker, I am trying to respond to my hon. friend. I personally had the occasion to be-


Coline M. Campbell: It is very dangerous.


An hon. member:: Come on, motor-mouth.


Coline M. Campbell: He is spending government money to get there. Let him meet them.


An hon. member:: A large-mouth bass.


Some hon. members:: Oh, oh!


Martin Brian Mulroney: Mr. Speaker, I know the minister views his meetings with Atlantic coast fishermen as probably the most important matter on his agenda. Although he is travelling and exceptionally busy, I will, of course, ask him to see if he can make time on this particular trip to meet with the group mentioned by my hon. friend. And, if he has a little more time, I will ask him to have dinner with the hon. member as well.


Some hon. members:: Hear, hear!


THE ENVIRONMENT
Mrs. Marlene Catterall (Ottawa West):: Mr. Speaker, my question is directed to the Prime Minister and concerns the speech delivered by the Minister of the Environment this morning in Norway at an international environment conference.
The minister said that we must act now and that we must make real commitments. He then talks about next November, and last week in Parliament he talked about 1992 in Brazil.
It is evident that last week's leaked telex from Washington was right. Canada is siding with the Americans and against the countries that want to set real targets and timetables for reducing carbon dioxide emissions.
I ask the Prime Minister, before this conference ends, will Canada take a stand with those nations that want to take action now on the environment?


Martin Brian Mulroney: Mr. Speaker, I do not know why my hon. friend sees conspiracies behind every little headline.
The role of Canada and its independence on the environment has been lauded by people ranging from Prime Minister Brundtland to Foreign Minister Shevardnadze of the Soviet Union. That is a broad range of compliments.
It is strange that the Liberal opposition cannot once acknowledge the very significant leadership that Canada is providing in the environment, even though it escapes the attention of my hon. friend. I can assure her that she need not bother her head as there is no conspiracy going on. Canada is going to conduct itself with the degree of independence that has brought so much pride to the government of the people of Canada over so many years.


Marlene Catterall: Mr. Speaker, I am pleased the Prime Minister had the opportunity to re-read his old press clippings.
This is this morning's speech by our Minister of the Environment. It shows very clearly that this government prefers a wishy-washy consensus with the Americans to tough action on global warming.


An hon. member:: Shame.


Marlene Catterall: Why is Canada caving in? Why will the government not stand up with the seven countries who are showing leadership? Why will it not agree to set targets and timetables on carbon dioxide emissions?


Martin Brian Mulroney: Mr. Speaker, why the repetition of these silly questions that presume that the Government of Canada is not going to do exactly what the minister has very clearly set out? The minister has clearly established the intentions of the government to proceed with timetables and to proceed in a very deliberate and helpful manner.
May 15, 1990

The Government of Canada is trying to undo about a decade of inaction in the environment by my hon. friend's Party. Nothing was done, from acid rain to global warming. Your record was a big zero.


Some hon. members:: Hear, hear!


AGRICULTURE
Mr. Ray Funk (Prince Albert -Churchill River):: Mr. Speaker, my question is directed to the Minister of Agriculture.
Yesterday the parliamentary secretary to the minister reported to the House that the Minister of Agriculture, the Minister of Grains and Oilseeds and the prairie agriculture ministers met in Winnipeg "to formalize and, hopefully, to finalize an agreement with those provinces".
Everyone attending all these endless meetings for the last six weeks has presumably still been getting their pay cheques and hard-pressed farmers have yet to see a dollar. I would like to ask the minister, was an agreement was reached and, if one was, what was it?


Hon. Don Mazankowski (Deputy Prime Minister, President of the Privy Council and Minister of Agriculture):: Mr. Speaker, I can tell the hon. member and members of the House that the meeting was held and it was a very productive meeting. I think it is fair to say that progress was made.
The provinces acknowledged the fact that there would have to be some cost sharing with respect to this particular program. I think there was also an acknowledgement of the unique situation that Saskatchewan finds itself in because of the huge decrease of income in that province. There was certainly acknowledgement made and we are trying to find a way to deal with that. As well, we had a very productive discussion with respect to the safety-net and long-term stabilization program which is something that the government is actively considering.
All these things are being worked on during the course of this week. We will have a further meeting in Toronto where all the ministers of agriculture will be meeting on Friday. Hopefully, we will be able to advance these proposals at that time.
Oral Questions


Raymond John Funk: Mr. Speaker, my supplementary is directed to the same minister. I appreciate the fact that he reports that progress has been made, but we certainly have had reports of progress something like 10 or 11 times.
I would like to remind the minister that up to 45 per cent of the crop is in in some areas; 20 per cent over-all. Much of this crop has gone in with inadequate preparation for fertilizer and other inputs, and acreages are being reduced. This is starting to look like a crop reduction program rather than a seeding assistance program.
When can farmers expect finally to have some money in their hands?


Donald Frank Mazankowski: Mr. Speaker, despite what the hon. member says, I think he will find that statistics will reveal that there is an increase in plantings projected for this year and I think that is a very positive sign.
I recognize the difficulty and the hon. member knows that. That is why the federal government announced its intention to put $500 million on the table on March 30. We have asked the provinces to come on board, to help us to design the program, to help us deliver the program, and to help us pay for that program because it was in everyone's interest to get as much money into the hands of the farmers as quickly as we possibly could.


PRESENCE IN THE GALLERY
Mr. Speaker:: It is with great pleasure that I draw the attention of the House to the presence in our gallery of His Excellency Felipe Gonzalez Marquez, President of the Government of Spain.


Some hon. members:: Hear, hear.


HOUSING
Mr. Joe Fontana (London East):: Mr. Speaker, my question is directed to the Minister of Housing. Yesterday, my colleague from LaSalle-Emard and I presented

May 15, 1990
Oral Questions
the Liberal party's recommendation on housing affordability to the Canadian Housing Renewal Association. I might add it was very well received.


Some hon. members:: Hear, hear!


Joseph Frank (Joe) Fontana: I would also like to tell the minister that all the speakers, the 500 participants, municipal leaders, and all other people involved in housing, have labelled this government a do-nothing government for housing.
I want to ask this minister and his government will he today in this House, or tomorrow when he meets with CHRA, commit his government to the reinstatement of rental RRAP? Will he show support for the homeless? Will he show support for the people on the waiting list for affordable housing? Will he support and recommit himself to co-operative housing? And, will he support the workers and builders-


Mr. Speaker:: I think the hon. member has put his question.


Hon. Alan Redway (Minister of State (Housing)):: Mr. Speaker, I, too, had meetings with a number of people involved with housing at the municipal level yesterday, including mayors of big cities across the country, and I must say the government and its programs were very well received there as well.


Some hon. members:: Hear, hear!


Alan Redway: I am looking forward to the meetings tomorrow with the Canadian Housing Renewal Association because I will have an opportunity to tell them that, under our programs, as opposed to Liberal government programs, 60 per cent more of the housing funds federally are being devoted to social housing than before.


Some hon. members:: Hear, hear!


Mr. Peterson:: Balderdash!


Joseph Frank (Joe) Fontana: Mr. Speaker, the minister knows that that is a bunch of bunk. He knows it and his government knows it. The municipal leaders were the same ones who said that the government does absolutely nothing.
Let me ask this further question, but I wish he would answer my first question. The housing ministers will meet with the minister next week. They want some solutions to the housing crisis in the country. Will the
Minister in fact be part of the solution and not part of the problem?


Alan Redway: Mr. Speaker, I can assure the hon. member that I will be part of the solution and not part of the problem. I also want to assure the hon. member that, if he carefully followed what was going on next week, he would know that the meeting with housing ministers is to discuss the allocation of the existing federal housing funds among the provinces. Hopefully, we can arrive at a formula on which all will agree, as they did in the past under the Regina Accord, something that did not happen under the former Liberal government.


Mr. Marchi:: That's bunk! Minister of bunk.


An hon. member:: Exactly!


FORESTRY
Mr. Guy H. Arseneault (Restigouche -Chaleur):: Mr. Speaker, my question is directed to the Minister of Forestry. Yesterday, an environmental group called Canada's Future Forest Alliance, which represents over one million Canadians, stated that our forests were facing a national disaster comparable to the destruction of the Amazon forests.
Since the present government policies and programs result in a net loss of 200 hectares of Canadian forests annually, what new programs will the government implement to remedy the depletion of Canada's forests?


Frank Oberle: Mr. Speaker, we veiy much intend to continue the programs that we have initiated over the last five years and which, as the hon. member might readily concede, are showing very impressive results. In fact, one should anticipate that there should not be any more additions to any so-called backlog of NSR lands as we move into the new generation of federal-provincial agreements, and as the new Department of Forestry which the Prime Minister has established begins to function fully.


Guy H. Arseneault: My
question is directed to the same minister. Because of the government's failure to create a national data bank, there is a lack of information on the state of Canada's forests. As a result, contradictory statements are being
May 15, 1990

made by representatives of industry, governments and environmental groups.
When will the minister take his responsibility seriously? When will we have a national forestry data bank?


Frank Oberle: Mr. Speaker, I agree with my hon. friend that the lack of factual and reliable data has been a major problem in the development of the kind of forestry practices that will take us into the next century and that will be required in the modern context. Despite that, my hon. friend knows that this year we will be planting 1.2 billion new seedlings in our country, which is at least double what we are harvesting, so we are on the right track. Improvements will be necessary as we go along and if we begin to incorporate the principle of sustainable development and integrated management into our management structures, my hon. friend will see a major improvement in all these areas.


THE ENVIRONMENT
Lynn Hunter: Mr. Speaker, my question is for the Minister of Transport, but in his absence I will address it to the parliamentary secretary.
It has been over a year since the Exxon Valdez and the Nestucca oil spills occurred. In the wake of these disasters, serious concerns were raised about the transport of oil through coastal waters. Report after report has stressed the lack of regulations with respect to oil barges, yet the government has failed to take action. Within a week, a barge carrying three million gallons of bunker oil is expected to travel through the Gulf Islands and into the waters of Saanich Inlet, an area proposed as a federal marine reserve park.
Given the regulatory vacuum with respect to oil barges, what assurances can the government give that this particular barge will not be permitted in these sensitive waters without the strictest supervision and with adequate provisions, in the event of an oil spill?


Mr. Ross Belsher (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, I want to assure the hon. member opposite that the Coast Guard is well aware that the proposed transportation has been designated to go forward and will be keeping everything under its
Oral Questions
direct surveillance. I might remind the hon. member that the Coast Guard has been very active in dealing with this, in conjunction with the provincial authorities as well. I want to assure the hon. member that her concerns are being addressed.


Lynn Hunter: Mr. Speaker, I have a supplementary question for the minister. The interim report of the Brander-Smith inquiry released in September of 1989 stated that early action on the unregulated aspects of tanker barge construction and operation is required. That same report condemned the government's lack of readiness in the event of oil spills. When can we expect the government to enact regulations that would minimize the danger to the environment from fuel barging operations?


Ross Belsher: Mr. Speaker, this is being actively looked at and the reports of the various committees which have reported are being dealt with, on a day-today basis.


BILL C-21
Mr. Doug Fee (Red Deer):: Mr. Speaker, my question is for the Minister of Employment and Immigration.
Bill C-21 is now back in the other place and we hope that, in the interests of Canadians, it will accept the message sent to it by this elected House. I know, for my part, in the legislative committee hearings on Bill C-21, that most negative witnesses were from union affiliated groups. These are the same groups that Liberal senators chose to hear, and the same groups they now lean on for support. I would like to ask the minister if she could inform the House if the views of these groups truly represent what the Canadian public feels about Bill C-21?


Hon. Barbara McDougall (Minister of Employment and Immigration):: Mr. Speaker, certainly I would never deny a committee of this House or of the other place its right to hear witnesses of its choosing.
I must admit I was surprised by some of the messages that were heard by the committee, given that we had conducted a poll, the results of which I released today, which showed that 66 per cent of Canadians in all regions of Canada support our efforts under Bill C-21 to

May 15, 1990
Oral Questions
spend more money on training under UI. That support is spread right across Canada.


GOODS AND SERVICES TAX
Mr. George Proud (Hillsborough):: Mr. Speaker, my question is for the Minister of Finance.
The government has said that workers must not negotiate wage increases in anticipation of an inflationary GST. On the other hand, the Canadian Labour Congress does not trust the assurances of the Minister of Finance that his tax will not hurt ordinary Canadians. Workers are determined to offset damage caused by such a regressive tax.
Why is this government continually threatening workers for trying to seek their necessary protection?


Michael Holcombe Wilson: Mr. Speaker, we are not threatening anybody, we are just stating what we believe are the basic facts.
Let me quote from some fairly well-known people. The Economic Council of Canada said: "The reality of the world marketplace will force business people to pass through the great bulk of the tax." The Canadian Construction Association said: "The selling price for all kinds of construction in our analysis is found to be lower under the GST than under the current tax system." John Crispo says: "Very-few manufacturers of significance are going to be able to pocket the reduction in the MST. Competition is going to force them to pass it on to us."
We do not believe the concerns that have been expressed by some people in the labour movement and in other places will be found in actual reality as we move into the world of GST. We think it would be wrong and very unhealthy for the economy for people to go after excessive wage demands in anticipation of the GST, which will not produce an increase in the cost of living.


George Albert Proud: Mr. Speaker, my supplementary question is for the same minister.
The government's policies that we have seen over the last number of years have been clearly anti-labour. The legislative policies have battered Canadians for the past six years.
With such a track record, how can the workers believe this minister when he promises them that they will not suffer from the GST? Can he make that promise here today?


Michael Holcombe Wilson: Mr. Speaker, I listened to the hon. member saying that the policies of this government are anti-labour.
What could be more pro-labour than the 1.6 million jobs that have been created since 1984? If the hon. member is looking for more specific policies, all he has to do is look at the support we have provided to the labour venture capital funds that have been requested by labour and to which this government has responded positively.
These are the things that labour can look to from this government as ways in which we are supporting the growth of labour in this country.


COURT CHALLENGES PROGRAM
Mrs. Christine Stewart (Northumberland):: Mr. Speaker, my question is for the Secretary of State, but in his absence I will direct it to the Minister of Justice.
The Court Challenges Program provides legal and funding assistance to disadvantaged groups or individuals to clarify charter equality and language rights. Last week, the Secretary of State announced an extension of this program for five years, but failed to announce the agency that would be administering the program.
Can the minister rectify the neglect today and inform us to whom the court challenges staff is now responsible, thus allowing the program to continue efficiently?


Hon. Kim Campbell (Minister of Justice and Attorney General of Canada):: Mr. Speaker, I believe my colleague, the Secretary of State is reviewing the administration of the Court Challenges Program and will make an announcement when he has made a decision.


Christine Susan Stewart: Mr. Speaker, it is very difficult for the program to carry on efficiently in the absence of an agency. Citing the current economic situation, the Secretary of State refused to consider important recommendations to the Court Challenges Program from the Human Rights Committee. Equality rights, language rights, women's rights, native rights, among others, are denied de facto justice if
May 15, 1990

disadvantaged groups are not even aware of the program.
Can the minister tell us how the government plans to inform Canadians about the existence of this important program?


A. Kim Campbell: Mr. Speaker, I find the hon. member's question very interesting because when we seek to inform Canadians about something as important as tax reform, her party gets very incensed about it. Is the hon. member saying that she approves of expenditures by the Government of Canada to advertise its programs?


Ms. Clancy:: That's what she asked.


SOCIAL PROGRAMS
William Alexander (Bill) Blaikie: Mr. Speaker, my question is for the minister responsible for the Older Worker Adjustment Program. Members will recall that many Canadian workers lost their jobs as a result of the privatization of CN Route and then the dismantling of the private company that resulted from that privatization.
In Winnipeg, 94 people lost their jobs as a result of the closing down of Transport Route Canada. None of these workers are eligible for the Older Worker Adjustment Program because the limit set for the application of that program in Winnipeg is for companies of 100 workers or over. By falling six short of this 100-person limit many people who have lost their jobs through the privatization of Route Canada are not eligible for the older worker adjustment.
Is it not possible that the government could find a way to be flexible in this instance and make it possible for these older workers who lost their jobs as a result of that government initiated sequence of events to qualify for that program?


Hon. Jean Corbeil (Minister of Labour) and (Minister of State (Transport)):: Mr. Speaker, I would like to tell the hon. member that all the components of the program to help older workers were negotiated by the federal government with each province. We have established a criteria that must be respected across the country, but
Oral Questions
certainly we are willing to look at anything that could be helpful to these people.
I think the member will understand that in large cities all across the country we have to set a minimum under which we have to make exclusions. Nevertheless, our program has been very effective so far, because a very large number of older people have been helped by this program.


William Alexander (Bill) Blaikie: Mr. Speaker, the fact remains that people who lost their jobs from the same company, because they live in a different province, for example, New Brunswick, have become eligible for that older worker adjustment, whereas workers in Winnipeg, because of this 100 worker limit, have been deprived of the same benefits even though they worked for the same company. Is there not a way of taking into account, when people lose their jobs as a result of a national company going under, to make sure that everyone who worked for that company gets the same benefits no matter where they live in Canada?


Jean Corbeil: Mr. Speaker, I hope that the hon. member will understand that a lay-off of ten people in a small community is, at times, much more important than a lay-off of 50 people in a much larger community.


Mr. Lapierre:: Try it yourself. You'll see.


Jean Corbeil: We would not be treating the older workers fairly if we did not have a different criteria, depending on the location, because the possibility of finding new jobs after being laid off in a large city is much higher than finding a new job in a much smaller community.


AIRPORTS
Stan Kazmierczak Keyes: Mr. Speaker, since his appointment the Minister of Transport has visited a number of Canadian airports and has witnessed firsthand the air traffic problem in southern Ontario.
Given the minister's statement that, "Hamilton Airport is a proven facility" and that "the expansion of Hamilton Airport as a solution to Pearson International" is a priority. He also knows that a comprehensive study released by his department earlier this year concluded

May 15, 1990
House of Commons
that Hamilton airport is the best alternative to Pearson International.
Therefore, in the absence of the Minister of Transport I would ask the Minister of State for Transport if he can explain what concrete measures the Ministry of Transport has in mind for Hamilton airport vis-a-vis Pearson International?


Ross Belsher: Mr. Speaker, yes, it is true that the minister has been to the Hamilton airport. He has also been to Pearson International Airport. Pearson is the busiest airport in the country.
The member must be reminded that the airline companies are not clamouring for facilities to land at Hamilton. There has to be a demand from the companies to fly into Hamilton. It is not a case of ordering the airline companies to go where we demand they go. The member must also bear that in mind.


Mr. Speaker:: I would like to advise the House that during Question Period I received notice of a question of privilege from the hon. member for Kingston and the Islands. I am wondering if the hon. member and the House would agree that I hear the Prime Minister on a short matter and then return to the hon. member.


Some hon. members:: Agreed.


APPOINTMENT OF DEPUTY SPEAKER OF THE HOUSE AND CHAIRMAN OF COMMITTEES OF THE WHOLE HOUSE
Martin Brian Mulroney: Mr. Speaker, it is with great pleasure that I move:
That the Hon. Andree Champagne, member for the electoral district of Saint-Hyacinthe -Bagot, be appointed Deputy Speaker of the House and Chairman of Committees of the Whole House.


Some hon. members:: Hear, hear!


Jean-Robert Gauthier: Mr. Speaker, as Parliamentary House Leader of the Liberal caucus, I take great pleasure in supporting the appointment of the hon. member for Saint-Hyacinthe-Bagot as Chairman of Committees of the Whole House and Deputy Speaker of the House.
I would also like to take this opportunity to say a word of thanks to my friend and colleague, the hon. member for Vercheres. I hope the House will bear with me, because there are a few things I would like to say about my friend Marcel. For six years he has been a member and Deputy Speaker of the House of Commons. He has chaired a number of important committees of this House. He was president of the Canadian branch of the AIPLF, the Association internationale des parlementaires de langue frangaise. To us, he was someone who managed to be impartial in practically every circumstance, at the same time displaying a unique ability for comradeship with his fellow members. He has made friends on all sides of the House.
To Marcel Danis, the hon. member for Vercheres, I want to say thank you for the impressive services rendered to the Canadian people.


Some hon. members:: Hear, hear.


Mr. Iain Angus (Thunder Bay-Atikokan):: Mr. Speaker, I too wish to rise on behalf of my caucus to indicate our support of the motion.
I also want to say thank you to the outgoing Deputy Speaker whom I got to know in the last year or so in the special committee that I have been working on as well as prior to that in the House in the chair. He has done a remarkable job. We wish him well in his new endeavours.


Mr. Speaker:: Is it the pleasure of the House to adopt this motion?


Some hon. members:: Agreed.


[Stage Direction]
Motion agreed to.
Martin Brian Mulroney: Mr. Speaker, I had great hopes for the career of Marcel Danis, but after listening to the member for Ottawa-Vanier and his eulogistic references, I will have to think this over again.
I just want to tell my hon. friend and the member from the NDP that I share their high regard. On behalf of all government members, I thank them for their fine display of parliamentary leadership. I think it is very much appreciated by all.
May 15, 1990

[Translation\


APPOINTMENT OF DEPUTY CHAIRMAN OF COMMITTEES OF THE WHOLE HOUSE
Martin Brian Mulroney: Mr. Speaker, I also move that Mr. Denis Pronovost, member for the electoral district of Saint-Maurice, present and future-


Some hon. members:: Oh, oh!


Some hon. members:: Hear, hear.


Martin Brian Mulroney: -all right, member for the electoral district of Saint-Maurice. Mr. Speaker, I move:
That Mr. Denis Pronovost, member for the electoral district of Saint-Maurice, be appointed Deputy Chairman of Committees of the Whole House.


[Stage Direction]
Motion agreed to.
[DOT]ft 'l4 v

Peter Andrew Stewart Milliken: Mr. Speaker, I received in my mail that I was sorting through during Question Period the material that I referred to in the notice to Your Honour. In fact it was referred to subsequently in an answer given by the Minister of Employment and Immigration in this House.
To say that I was shocked to receive this material is to put it mildly because it was a press release issued by the Minister of Employment and Immigration in which she releases statistics prepared by Decima Research, apparently in response to a government contract for a series of questions put to Canadians concerning, effectively, the government's policies as adumbrated in Bill C-21.
It is a well known fact that when we in the opposition put questions to the government and Notices of Motions for the Production of Papers on the Order Paper requesting studies and statistical data prepared in the form of polls by the government, this information is regularly refused to us. We are told that the polling is private and is done, admittedly with public funds, but for the purpose of enabling the government to make decisions or receive the views of Canadians, or whatever the answer may be. The information is denied to us here in Parliament.
Privilege
Yet here, today, we have a situation in which the Minister of Employment and Immigration has released this bundle of statistics, this poll, that she has had commissioned, apparently at public expense, because the results of the poll clearly are ones that she thinks are favourable to the cause that she is proposing in Bill C-21. It is an attempt to influence the Senate of Canada by making this-


Albert Glen Cooper: Point of order, Mr. Speaker.


Peter Andrew Stewart Milliken: I am on a question of privilege and a question of privilege takes precedence over a point of order. I wish the hon. member for Peace River would pay some attention to the rules.


Mr. Speaker:: I will hear the hon. member for Peace River in a moment. Perhaps the hon. member for Kingston and the Islands could get to where the privilege is in this.


Peter Andrew Stewart Milliken: I am almost there.
The point is that this information is denied to members of Parliament on a regular and consistent basis. Now, all of a sudden, when it suits the government's purpose, it dumps it out on the floor of the House in answer to questions and in press releases across the country.
If it is going to be made public today in this way, it should be made public on every occasion that it is asked for. The denial of making it public and the secrecy that surrounds these polls in the usual way constitutes a breach of the privileges of this House, if the government is going to release the polls when it suits its fancy to do so. That is what is going on here. I object and ask, Mr. Speaker, that you rule this is unparliamentary and a breach of our privileges.


SPEAKER'S RULING
Mr. Speaker:: The hon. member for Kingston and the Islands has a complaint. It is not a new complaint. The complaint has been raised on a number of occasions going back through the long history of this place.
The hon. member has made his complaint clear, but I do not think the Chair can intervene if the government wishes, as it has in this case, to release all the material, and as it has refused to do in other cases. I have to say the complaint falls short of privilege.

May 15, 1990
Point of Order
The hon. member has put the complaint forward with vigour. Perhaps following this complaint some conversations might take place between hon. members on both sides of the House.


POINT OF ORDER
Peter Andrew Stewart Milliken: Mr. Speaker, I rise now on a point of order. The point I want to make has nothing to do with the previous one.
It is a point of order that arose during Question Period. I do not want to appear to be objecting on behalf of any member, but in the course of Question Period during a question being put by the hon. member for Edmonton East I heard some members on the government side, and I cannot identify them so I do not think it is a question of privilege, refer to the hon. member who had the floor as a "windbag".
I have been called that before in this House. I have checked the precedents. I have looked at Beauchesne, Sixth Edition, citation 488 which states:
It has been ruled unparliamentary to refer to a member as:
(c) a bag of wind.
It cites a precedent of February 15, 1878, which I have here and would be pleased to provide Your Honour.
In my submission a "bag of wind" and a "windbag" are one and the same. I suggest that the term is unparliamentary. I ask that Your Honour consider the matter and if it is unparliamentary and so rule, then I will object the next time it is used. I am not objecting for myself in this particular case, although I have been called that. I could identify the hon. member who has used that unparliamentary expression in reference to some of my perhaps longer speeches in this House. I will not say long-winded speeches, but certainly perhaps longer speeches.
I would ask Your Honour to consider the matter and if windbag is in fact unparliamentary, perhaps its use could be discontinued in the Chamber. I know all hon. members would not want to use unparliamentary terms.


SPEAKER'S RULING
Mr. Speaker:: The hon. member for Kingston and the Islands has raised a crucial point in the long history of parliamentary or unparliamentary language.
The hon. member advises the Chair, and I have no reason to disbelieve him, that when another hon. member was up some other hon. member, unidentified, referred to him as a windbag. The hon. member for Kingston and the Islands has pointed out that "bag of wind" has been referred to as unparliamentary and that it ought to be equated with windbag.
"Bag of wind" has also been used as a synonym for the Scottish pipes. Of course I would have to say that if it was used in that context, given my own ancestry, it would be completely and utterly parliamentary.
However, I must incline to the view that under the circumstances in which it was apparently given today, I think it certainly does border on the unparliamentary. It might be that some discussion could take place in the appropriate lobby. If it can be found who uttered this affront, perhaps he or she could be persuaded to come in front of the House and eventually withdraw it.
There is no question in my mind that we are bound by precedent under certain circumstances. The hon. member for Kingston and the Islands whose sharp ears picked up this exchange has given considerable assistance to the Chair.
I hope that all hon. members would refrain from referring to other hon. members as either a bag of wind or a windbag, especially because we would not want confusion with Scottish pipes.
I thank all hon. members.


Jean-Robert Gauthier: Mr. Speaker, I merely want to take this opportunity to use the other official language and inform you that Beauchesne's, Fifth Edition, makes an important point, because many Canadians listening today probably don't understand what is meant by a "bag of wind" or a "windbag". I may refer them to Beauchesne's, citation 320, which says in the French edition that the following list is a more or less complete collection of various expressions that have been ruled unparliamentary in the House since over a century ago. Used in English, they do not always take the same form or have the same undesirable impact in their official translation.
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Citation 320 goes on to say that we should remember that in this respect, the original, not the translation, creates the precedent.
In French, we are too polite to call anyone a windbag or a bag of wind. We would simply say "une outre pleine de vent".


Mr. Speaker:: I want to thank the hon. member for Ottawa-Vanier for his comments. His polite comments are always appreciated.



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[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson (Etobicoke Centre) that Bill C-65, an act to provide borrowing authority, be read the third time and passed.
Neil Young: Mr. Speaker, when I looked at the motion before the House today, which runs under the title: "Resuming debate on the motion of the Minister of Finance for the third reading of Bill C-65, an act to provide borrowing authority", I thought it was rather innocuous and did not tell us too much until I checked on how much the government was wanting to borrow and I realized it was in the area of some $25.5 billion.
If I compare that $25.5 billion that the government wishes to borrow with the 1987 figures for those corporations whose untaxed profits almost doubled to $27 billion from $15 billion in 1984, I can well imagine what this government could do to reduce this country's deficit if it were to do something proper about income tax reform.
I will come back to those corporate figures in a second, but I want to deal first with what this government has done to the income tax system and the tax systems since it came to power in 1984.
In November 1984 when the Minister of Finance introduced his first economic statement to the House, Canadians discovered that due to increases in oil and gas
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prices it would cost the average Canadian family about an additional $100 per year.
If that were not enough, the increased UI premiums up to different levels cost the average Canadian family another $102 per year. Combining that with increased sales taxes by $150 per year, plus many user fees on parks and harbours for services, et cetera, the total in that 1984 economic statement caused Canadian families in one blow to pay an additional $352 per year in taxes.
Shortly thereafter, on May 23, 1985 when the Minister of Finance actually brought in a budget, through the elimination of federal tax reductions it cost Canadian families another $100 per year. Modification to indexing of various programs cost Canadians another $115. Cuts in family allowance payments cost families $22.50. Cigarette and alcohol tax increases cost another $75. The sales tax was broadened, which cost another $150. Increases in gasoline taxes cost another $50.
At the same time, Mr. Speaker, you will recall, the Minister of Finance proposed that pensions for senior citizens be deindexed. That of course was later reversed. However, in that budget it cost the average Canadian taxpayer another $512.50 per year.
On June 27, 1985 the minister came along and reversed his decision to deindex old age pensions, but to compensate he decided to impose a one cent per litre increase on gasoline to pay for the lack of revenue that he would miss through the now cancelled deindexing program. That one cent a litre cost Canadian taxpayers another $50 per year.
All of that reduced the ability of Canadians to pay for other items. These three initiatives alone amount to well over $1,000 a year, money which was removed from the disposable incomes of Canadians.
In his budget of February 26, 1986 the Minister of Finance introduced a 3 per cent surtax to the tune of another $170 a year on the salaries of average Canadian. There was another sales tax increase of $150 a year. Cigarette and alcohol taxes were increased accounting for another $20.
On February 18, 1987, the Minister of Finance introduced another budget. In this one there were gas tax increases amounting to another $50 a year for ordinary Canadians paying taxes. The sales tax base was broad-

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ened, which amounted to another $15 a year. Cigarette, and this time airline ticket taxes, caused an increase of $35 in taxes.
On June 18, 1987, under tax reform this time for a change the average Canadian was paying $310 a year less than after the previous budget.
However the Minister of Finance went on to correct that. On February 10, 1988, additional gas tax increases of one cent per litre were introduced, which cost Canadians another $50 a year in disposable income.
I could go on and on about what this government has done in the taxation sector for ordinary Canadians. This year I had more complaints from constituents about the amount of taxes they are paying today over what they paid in 1984. I would have said previously that this government is slowly nickeling and diming Canadians to death, but it is more than that. Average Canadian families are now paying a couple of thousand dollars more a year in taxation than they were in 1984.
If we compare that to what this government has done for the corporate sector, we find a situation contraiy to what the Minister of Finance set out in a speech in February 1987. He said: "This government's fundamental strategy in reviewing the corporate income tax is to ensure that profitable corporations pay their fair share to preserve respect for the tax system. We must further reduce the source of the problem by cutting back special corporate tax write-offs. This is the direction that I set out in May 1985 and acted on last February".
Despite the finance minister's rhetoric, in every year the Conservatives have been in power more and more profits have gone untaxed. By 1987 those untaxed profits had almost doubled to $27 billion from $15 billion in 1984.
It has been suggested by Department of Finance officials and members of the government that it is mostly farmers and small businesses that do not pay tax. To say the least, that is a distortion of the facts and it does a disservice to both farmers and the small business sector. If we look at the most recent Statistics Canada data, it should be clear even to finance officials that the farming,
fishing and forestry sectors together make up less than 1 per cent of all untaxed profits.
The Minister of Finance has called the data outdated since, as he said, that was the year before tax reform. Yet, some tax reform measures were implemented in the middle of 1987 and should therefore have been reflected even somewhat in the 1987 data.
Further, if one looks at more recent industrial corporation statistics, one finds that total deferred taxes for Canada's largest corporations are continuing to grow in 1988 and into 1989. By the end of 1989 cumulative deferred taxes for wealthy industrial corporations reached $38.5 billion. In fact deferred taxes grew by $6.1 billion between 1987 and 1989-and that was after tax reform-compared to $3.7 billion worth of growth between 1985 and 1987.
The government's tax reform has done little so far to slow down deferred taxes for the corporate sector, particularly for large corporations.
If you take a look at what this government considers to be fair tax reform, Mr. Speaker, you will discover that there are still some 480 Canadians with incomes over $100,000 a year who have not paid one cent in income tax. There are some 2,920 individuals with incomes over $50,000 a year who do not pay a red cent in income tax. So much for fairly sharing the tax burden.
Mr. Speaker, I know you will be interested in the following figures. In 1988 the corporate tax rate was reduced from 36 per cent to 28 per cent. More than
60,000	corporations paid no taxes at all. These corporations include Algoma Steel at profits of $80 million. It paid no taxes. Interestingly it made donations of some $8,750 to the Conservative Party of Canada.
Bramalea had profits of $33 million and paid no taxes. Its contribution to the Conservative Party was $12,625.08.
Brascade had profits of $64 million and paid no taxes. Its contribution to the Conservative Party was $24,319.
Confederation Life had profits of $62 million and paid no taxes on it. It contributed $11,186.52 to the Conservative Party.
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Brascan Corporation's profits were $263 million. It paid no taxes. Its contribution to the Conservative Party was $50,362.92.
Edper Enterprises made $52 million in profits and no taxes paid. The amount of money it contributed to the Conservative Party is not available.
Fletcher Challenge Finance had a $24 million profit and paid no taxes. Yet it managed to pay $30,000 to the Conservative Party.
North Canadian Oils had $30 million in profit. It paid no income taxes either but managed to come up with $5,000 for the Conservative Party.
Ocelot Industries made $432 million in profits and paid not a red cent in income tax.
PWA's profit was $30 million, and it paid not a cent in income tax.
Standard Trustco made $30 million in profit and paid no income taxes.
Tridel, which is an interesting one, had $72 million in profits and paid not a cent in income tax. It managed to cough up $29,441.06 to the Conservative Party.
Xerox Canada had $74 million in profits. It paid not a red cent paid in income tax. Its little contribution to the Conservative Party was $11,558.
I will just go down the list because some of the other ones are really quite interesting.
Central Guaranty Trustco made $75 million in profits. They managed to come up with $2.86 million in a tax credit and paid no taxes.
Goodyear Canada made an $11 million profit. Then they got a hand-out from the government of $1.4 million and paid no taxes. Hemlo Gold Mines, $43 million profit. They got a hand-out of $2.73 million and did not pay a cent in income taxes.
Magna International is a dandy example, with $19 million profit, $8.2 million tax credits and not a cent in income tax.
MICC Investments, $72 million profit, $29.97 million in tax credits and not a cent in income tax.
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Power Corporation, the big daddy, had a $214 million profit, $2.2 million in tax credits and no taxes paid. They managed to cough up $72,000 for the Conservative party.
Ranger Oil, $15 million profits, $4.07 million in tax credits and no taxes paid. They managed to come up with $36,000 for the Conservative Party.
That is hardly equitable tax reform. There is an increasing number of Canadians who are beginning to understand that when this government talks about deficit reduction it is playing the old shell game. It is asking Canadians to tighten their purse strings and tighten their belts while initiating programs to cut back on health care services and on programs for the disabled under the Canada Assistance Plan. It is cancelling programs for improving child care services. It is instituting clawbacks of family allowance benefits and old age pensions. The government is slashing funding for Via Rail and CBC, structures that hold this country together.
This government is playing the old shell game. It is telling Canadians that they have to cut back on their expectations from government in order to reduce the deficit, while at the same time it is handing out billions of dollars to the corporate sector in reduced taxes, deferred taxes and through all kinds of legal loopholes that it would close if it seriously wanted to do something about reducing the deficit and bringing in fair tax reform in this country.


The Acting Speaker (Mr. Paproski):: On debate, the hon. member for Etobicoke North.


Hon. Roy MacLaren (Etobicoke North):: Mr. Speaker, the bill before us, Bill C-65, an act to provide borrowing authority of some $25.5 billion is, to a substantial degree, an admission of failure on the part of this government to manage the economy.
The government has sought in a variety of ways to reduce inflation, stimulate employment, promote growth in our economy, but in each of those self-proclaimed goals, it has failed to provide for any reduction in the levels of deficit spending or any reduction in interest rates.
Bill C-65 once again draws attention to this government's policy of borrowing to cover its deficits rather than reducing its own expenditures and the interest rates that it pays on its accumulated debt.

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It is obvious to anyone who follows the question that more borrowing, the level of borrowing that we see before us today, will only add fuel to the real engine that is driving the increase in public deficits in our country, our current high interest rates.
Every percentage increase in interest rates adds a further $1.7 billion to the government's debt servicing costs. The recent policy of borrowing short term has only further exacerbated what is already a major problem, the huge cost of servicing our debt.
The government's projection in its last budget of a deficit of $28 billion, which is no major change from the deficit that it insisted it was going to reduce during its term of office, hinges on an interest rate forecast of an average of 11.1 per cent. Yet since January alone, interest rates in Canada have continued to rise from 12.4 per cent to 13.8 per cent, an increase of an astonishing 133 basis points. And there is no sign today that interest rates will decline. International rates, on the contrary, continue to rise, driven both by the spectre of inflation in Japan and in Europe and by the competition for capital in world money markets.
Moreover, the Canadian inflation rate remains at about 5.5 per cent, prompting the Bank of Canada to use that one blunt instrument available to it, interest rates, to attempt to achieve its self-proclaimed goal of zero inflation.
It is now predicted with some confidence that if current interest rates trend upward, debt service charges will absorb all the spending cuts from February's budget, leaving the government's deficit closer to $31 billion or $32 billion rather than the $28 billion it projected in its budget. Of course, an increase of that magnitude will necessitate further spending cuts, further taxation and further government borrowing simply to finance the growing public debt.
Interest rates are clearly driving the government's fiscal agenda. The government's fiscal agenda is not controlling interest rates in Canada, but rather is a victim of interest rates.
It is time we asked whether interest rates are serving the purpose for which they were intended. According to monetary theory, inflation is caused by too much money chasing too few goods. Thus, in its pursuit of zero inflation, the Bank of Canada has consistently raised interest rates in an effort to shrink the money supply and
to induce an deflationary period in the Canadian economy.
Yet the fact is that the consumer spending is remarkably resilient to the Bank of Canada's harsh monetary medicine. Since interest rates began to escalate in 1988 after five years of relative stability, inflation has also risen from around 4 per cent to today's 5.5 per cent.
What fundamentally undermines the bank's efforts to curb inflation is the national debt. Every time the bank increases interest rates, the government has to spend more merely to service the debt and to raise taxes to finance its own spending. It seems clear that persistent increases in excise taxes are one of the major causes, if not the major cause, of our rising inflation in Canada. In short, monetary policy and fiscal policy have become inseparable. This government has placed itself in a vicious circle from which it seems unable to extricate itself.
I refer to a report by the C.D. Howe Institute which well summarizes the box in which the government has placed itself. The institute notes that as the national debt grows, a vicious circle develops. At present, the size and the short average term to maturity of the federal government's debt are magnifying the Bank of Canada's difficulty in controlling inflation since a 1 per cent rise in short-term interest rates over a year tends to increase federal expenditures by more than $1.7 billion, adding further to the pressure of demand. The bank's task of controlling inflation would be considerably easier if fiscal policy were more restrictive.
Not only do we need to ask if interest rates are working to curb inflation, we must also ask whether it is worthwhile to risk recession in pursuit of what is called zero inflation.
Surely the purpose of tackling inflation is to help ensure price stability. Surely price stability is the goal of any government, not zero inflation as such. Price stability can enhance the long-term health of the Canadian economy, but can the current government's reliance on monetary policy alone serve that end? Is it achieving price stability as it pursues its single-minded goal of zero inflation?
Inflation is largely limited to central Canada. Atlantic Canada and parts of western Canada have barely extricated themselves from the last recession. Those regions

can hardly be considered overheated or inflationary. Yet interest rates fail to discriminate among these differing levels of growth across our country, differing levels of inflation across our country, with the result that beyond southern Ontario the regions are being driven farther into recession.
It is not merely in regions of Canada that the indiscriminate impact of high interest rates is felt. It is felt unevenly in the various sectors of the Canadian economy. The impact on the manufacturing sector, the impact on the resources sector can be especially severe, vulnerable as they are to borrowings and high levels of interest on those borrowings. On the other hand, the service sector may largely escape from the impact of higher interest rates, so that both a regional and a sectoral impact is felt as the government pursues its singleminded policy of high interest rates to achieve what it calls zero inflation.
Is a 5.5 per cent inflation rate really such a threat to price stability and economic growth? The Bank of Canada praises the goal of zero inflation, but in an increasingly interdependent world economy it is impossible to see how Canada can reach zero inflation when its trading partners, particularly the United States, have inflation rates well above that level.
Above all, we must realize what an anti-inflationary monetary policy entails. What is euphemistically described as slowing the economy or taking the steam out of the economy really translates into recession.
The goal here is twofold: The government sets out, first, through the Bank of Canada, to reduce demand by increasing the cost of money; and, second, to reduce wage demands by increasing unemployment, thereby restricting labour's bargaining power. Both these goals, by definition, entail recession and a decline in living standards for the average Canadian.
To achieve zero inflation, which is the stated goal of the Bank of Canada with the full support of the government, a government would have to forgo inflationary tax increases like the goods and services tax. Average wage increases would have to decline to the point where they would be roughly equal to the average increase in real output per member of the labour force. That would mean about a 2.8 per cent increase in 1988, 1.1 per cent
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increase in 1989, and probably less than that in 1990 as productivity declines due to recessionary pressures. Does anyone really believe that wage increases of such a low level will be achieved through interest rate policy? I doubt it very much.
A tight monetary policy alone is not achieving the goals for which it was intended. It does not appear to be limiting even the moderate inflation and is certainly not leading to zero inflation. The high interest rate policy of the government is undermining the very thing that it was intended to protect, the living standards of Canadians. It is not working because the government's fiscal policy is working at cross-purposes with its monetary policy.
High levels of government spending have both fuelled inflationary pressure in the economy and have incurred an unprecedented national debt. Countering those inflationary pressures with higher interest rates has forced the government to raise taxes which further fuels the economy by paying greater interest on its debt. This inflationary pressure in turn leads the Bank of Canada to raise interest rates. Here, again, we are in the vicious circle which is familiar to all those who have followed the economic policies of the government.
What has complicated this dilemma even further is the fact that the government increasingly has been forced to go off-shore for its capital, meaning that Canada is now tied more closely to rising international interest rates than it has been in a very long time. Canada's off-shore debt, both public and private, is now about $200 billion and growing. Each year Canada now looks to foreign lenders for almost $60 billion, unprecedented levels in Canadian experience and placing real restrictions on our ability to participate in the rapidly evolving international economy.
The policy of high interest rates in Canada has had a major adverse impact on our exports. High interest rates typically drive up the value of a currency. We have seen the value of the Canadian currency increase rapidly from the 70 cent level up to more than 85 cents today. The adverse impact on Canadian exports is substantial. It is not surprising that Canada has demonstrated a deteriorating trade position. Canada's merchandise trade surplus fell below $5 billion in 1989, half the level reported a year earlier, and about one-quarter of the peak Canada achieved in 1984.

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The decline in currency toward 80 cents, which could follow from a lower interest rate policy, would help exports. Of course, they might continue to be hindered by any softness in the U.S. market given the degree to which we have tied ourselves to that particular market.
The fact remains that the government has placed Canada in a position where the government's financial requirements have continued to absorb a large share of our domestic savings pool, putting upward pressure on interest rates and forcing other, mainly private, borrowers offshore. Unprecedently large international capital flows have been needed to supplement the domestic savings shortfall, placing Canada in greater debt to foreign countries than we have seen for a very long time.
If the government is truly interested in price stability, if that is their goal-not zero inflation as such, but rather price stability and a strong Canadian economy-it must now turn to solutions other than monetary policy alone.
First, the cost of servicing Canada's national debt must be reduced, if the government is going to extricate itself from the vicious circle that I have described.
Second, if the government's goal is indeed price stability, it must investigate, as a matter of urgency, other means of dampening demand and curbing wage increases.
Third, the government should attempt to encourage domestic savings and investment as a means of reducing our reliance on foreign capital. The most obvious route here is to reduce its debt, thus reducing the government's demand for indigenous savings which then can be utilized by private borrowers.
Finally, the government must not lose sight of the fact that low or zero inflation is not a goal in itself, but only one step toward achieving economic stability and growth.
If, in pursuing an anti-inflationary policy, these goals are not furthered, then surely the policy itself is seriously flawed.


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


Peter Andrew Stewart Milliken: Mr. Speaker, the hon. member for Etobicoke North made an excellent speech. I know that his knowledge of financial matters is profound. He, of course, speaks with authority as our past critic on financial matters and is particularly knowledgeable, in my submission, as a former minister.
He is aware of the way government policy is formulated. Is he of the view that the government has responsibility for interest rates in the country? Can the government dictate policy to the Governor of the Bank of Canada in respect of interest rates, and should we really be regarding the Minister of Finance as the person responsible for the high interest rates that we are now suffering from in Canada?


Roy MacLaren: Mr. Speaker, the answer to the hon. member for Kingston and the Islands is, clearly, yes. The government is responsible for interest rate policy, as well as monetary policy and fiscal policy, in the country.
The Governor of the Bank of Canada is, by his own definition, the agent of the government. The hon. member may recall that some decades ago a Governor of the Bank of Canada pursued policies which were contrary to those sought by the government of the day. In the aftermath of that disagreement between the governor and the government, the policy was clearly established that the government is responsible for monetary policy. The ultimate responsibility resides with the Minister of Finance. If there is disagreement between them, there is a procedure provided whereby the government informs the Governor of the Bank of Canada of its dissatisfaction with the policies he is pursuing and the Governor has the choice to conform with the policy outlines of the government or to resign.
In the case of today, we see a government that clearly is in full step with the Governor of the Bank of Canada. Let us not fool ourselves for one moment that the Governor of the Bank of Canada is acting in some independent fashion, pursuing his own monetary policies. Failure of the government to pursue a monetary policy which is integrated with a fiscal policy, which is essentially the problem we are facing today in Canada, is the fault of the government, not the Governor of the Bank of Canada. The Governor of the Bank of Canada is essentially the agent of the government.
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The real problem that the government has demonstrated since it came to office in 1984 is a basic one, that it has not taken advantage of the prosperity which the country enjoyed since 1982. We have heard a lot from the other side of the Elouse, from time time time we are still told, that the high interest rate policy today, the high deficit today, and the high debt today are all the result of some nefarious policies pursued by Liberal governments in the late 1970s and the early 1980s.
Those who advance that line of argument should recall that the impact of international oil price increases and of international interest rate increases at that time, not only drove the Canadian economy into a recession, but created recessionary circumstances across the western world. In accordance with standard economic policy, the government of the day used its spending to ensure that there would be employment to ensure a minimal standard of living for Canadians during a time of severe international recession.
The other half of that coin is that when prosperity returns, as it did partly as a result of the very policies pursued by the Liberal government of the day, then a government should withdraw some degree of its spending from the economy so that the economy does not become overheated. But this government has failed to do so, despite its repeated proclamations that was what it intended to do. Its financial plan of 1984 set forth a fiscal commitment to reduce its spending, to constrain its spending at a time when Canada was enjoying increasing prosperity. The government says that it still wants to pursue that policy, but it has left that policy so late in the business cycle that I, myself, fear that cutting government spending substantially, which it should have done consistently over the past six years, will now in fact contribute to the recessionary circumstances which are feared across our country.
The government has failed to do what it said it wanted to do. It has left Canadians in a situation of high interest rates, increasing inflation, and a fiscal policy that has not been used to create the circumstance of growth and employment which we all seek in this country.


The Acting Speaker (Mr. Paproski):: Before I recognize the hon. member for Winnipeg-St. James, it is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjoum-
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ment are as follows: the hon. member for Halifax-Child Care; the hon. member for Haldimand-Norfolk-Trade; the hon. member for London-Middlesex-Science and Technology.
On debate, the Hon. Member for Winnipeg-St. James.


Mr. John Harvard (Winnipeg-St. James):: Mr. Speaker, I am pleased to speak on this borrowing bill because it affords me the opportunity to express a number of concerns of my constituents of Winnipeg-St. James.
In Canada today, there is a crisis in confidence.
This crisis in confidence manifests itself on many fronts. There is more to it than just the apparent ever-present constitutional crisis which reflects poor leadership on the part of the Prime Minister. The ease that I feel in this country and that is expressed to me goes well beyond Meech Lake.
There is a crisis in confidence in the handling of the economy. Clearly, Canada's economy is in a state of deterioration. The indicators are pointing the wrong way. The country is adrift, and people are asking over and over again: "Who is in charge in Ottawa?" What is going on in the nation's capital? Does the government know what it is doing? Where is the leadership?" Those are some of the feelings the people of Canada are expressing.
The finance minister says: "Everything is okay. Believe me, trust me. Everything is going to be all right." The trouble is that nobody believes him any more. The man's credibility is completely shot. He has been singing this tune ever since he became the finance minister in the fall of 1984. Nobody believes him any more. In 1984, six years ago, the minister announced a five-year deficit reduction plan which has been an unqualified failure despite a spell of record economic growth.
At home and among our major trading partners, our deficit has come down a paltry, insignificant $4 billion. Most of this reduction is the result of tax increases and not expenditure reduction. The minister's big talk is just that, big talk. In a period of unprecedented growth when our economic house should be in order, what has he done about the debt? He has doubled it. What has he done about taxes? He has raised them about 31 times.

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That does not even include the goods and services tax which is yet to come.
That monster will be foisted upon us if everything goes according to Hoyle or at least the way the government wants it on January 1. There is little wonder that there is a crisis in confidence.
My hon. colleague from Etobicoke who spoke before me talked about the insane, high interest rate policy of this government. It is reasonable to ask these questions. Has the government gone mad? Has John Crow gone mad? Has the Minister of Finance gone mad? Have the officials in his department gone mad? Have all the people who are responsible for the government gone mad?
The editorial writers of The Globe and Mail support this kind of madness. We have come to know The Globe and Mail as a Tory apologist, have we not?
The interest rates in Canada today are more than five points higher than those in the United States. Think about it. It is unprecedented. Never before has it happened. The American inflation rate is virtually the same as that of Canada. We have an interest rate five points higher than the Americans. What does it do? It is quite apparent what the disparity between interests here and across the border do. It makes life very difficult for the Canadian companies to compete in the American market and to sell products across the line. That high interest rate policy kills jobs. It makes houses much more expensive. It makes cars more expensive. Everything that Canadians buy with the help of loans becomes much more expensive.
Earlier I spoke of indicators showing that the economy is going the wrong way. I can tell you there is a slump-and this is one of the indicators-in housing in this country. There is a slump in the retail industry. The economy is slumping. The economy is sinking. For the first time since 1982 the economy has declined for two consecutive months, all of it a very disturbing picture. Canadians are saying: "Enough is enough. We have had enough of this nonsense". They are loudly and clearly telling the Minister of Finance that it is time that he abandoned his insane high interest rate policy, his over-reliance on monetary policy. But is the Minister of Finance listening? Does he ever listen, Mr. Speaker?
Sadly I must say that the answer to that question is no. This government never seems to listen to Canadians.
Canadians do not like the GST. Does the government listen? Canadians do not like the free trade agreement. Does it listen? Canadians do not like cuts to VIA Rail. Does it listen? Canadians do not like the clawback. Does the government listen? Canadians do not like transferring federal debt to the provinces. Does it listen? Canadians do not like cuts to native programs, to women's programs. Does it listen? They do not like the government's abandonment of the unemployment insurance scheme. Does it listen? Not on your life.
Little wonder that there is a crisis in confidence in Canada. Canadians feel, and it is a growing feeling, that this government is totally out of control and totally out of touch with reality. This government does not have the moral authority to govern. It is down at 15 per cent in the polls which is unprecedented. The government exists only because it gained more seats in the 1988 election, an election that was largely bought, purchased, by big corporate money.
I said that the government is out of control and out of touch with reality. Let me explain further. It says it is concerned about the deficit. Man, alive; that is all we have heard since the election of 1988. But I ask, what is contributing more than anything else to the deficit? It is the government's own high interest rate policy- The high interest rates make it much more costly for the government to do business. The government this year will pay, and I emphasize this figure, $41 billion in interest charges on the public debt. That is more than what the government pays in federal salaries. Little wonder there is a crisis in confidence.
But there are other things too that shake our confidence. Take for example the revelation the other day about increases in pay and salaries for executives of CN Rail. Those top five executives got an average boost in pay of 18.7 per cent. The CN president got an increase of 10.9 per cent, boosting his salary to $416,000 a year. The CN group vice-president did much better on a percentage basis; he got a boost of almost 40 per cent. He now earns a paltry $295,000. Nice work if you can get it. And guess what? They got those increases for what? Can you guess? Performance.
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CN profits dropped last year 27 per cent. Can you imagine the kind of increases they would have received if their profits had gone up? I do not know. But my imagination is stirred. What did the workers get, Mr. Speaker? Four and a half per cent. These guys at the top who are so concerned about inflation did not content themselves with 4.5 per cent. Not on your life.
Yes, there is a crisis in confidence in this country. Let us not forget while we are on this theme that these people who are so concerned about inflation, about Canadians not overspending and tightening our belts. What about the Governor of the Bank of Canada, the biggest creature of them all? What did he get in the last one or two years? Did he get a 5 per cent, or 10 per cent or 15 per cent increase? Not on your life. According to information, it was more like 20 or 25 per cent. It is very sad and it hurts. I think that Canadians deserve a lot better.
Let me touch on some other things. This is something that is not addressed in this House very often. It is the Canadian pension plan. We all contribute to it and it dates back more than 20 years. It is a great idea that all Canadians contribute into a general pot, as it were, providing a nest egg for all of us at our retirement. It sounds good in theory and it is good in theory. It is also very good in practice if it is run and operated properly.
What kind of a situation are we in with respect to the Canada Pension Plan? I will tell you the kind of situation we are in. According to documents, four years back in 1986, Canada's chief actuary said that the CPP fund was underfunded by $230 billion. That is a lot of money. What is it today? We do not know, Mr. Speaker, but we can tell you that when it comes to the Canada Pension Plan things are getting worse, not better. The reason is we are not paying the full cost of CPP. According to the actuarial tables, Canadians should be paying about 8 per cent of their salaries or their income into the Canadian pension plan. The fact of the matter is, they are paying 4.2 per cent. Plainly the plan is underfunded and we are heading for serious trouble.
In fact, I was listening to the president of the Canadian Chartered Accountants Association on CBC Radio not
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too long ago. He should know what he is talking about, particularly when it comes to CPP. What did he say? I do not know how old he is or exactly when he is going to retire, but he said he was not counting on the Canadian pension plan. In other words, he believes, as a lot of Canadians believe, that the Canadian pension plan is heading for bankruptcy and that the crunch will come probably around the turn of the century.
We have to ask ourselves, when it comes to CPP, if we should count on a retirement income that we have not paid for. It is more than just a fiscal or a pension question, it is really a moral question. If we have not paid or properly supported that fund should we expect the kind of moneys that are outlined when our retirement comes? I do not think so. Also, I do not think it is fair to future generations. What will happen is that somewhere down the line there will be a hard choice. Either taxes or premiums will have to be raised sharply if we want to continue the plan, or we could let the plan go asunder. I do not think many Canadians would want that.
I know in a discussion of this kind the parameters are very wide. I have learned that little bit of knowledge since coming to the House.
Let me touch on something else. You may not think it has anything to do with the borrowing bill, and you could make that argument, but I go forward anyway. It has to do with the David Milgaard case. This man has been in the penitentiary for 21 years. It is a long time. He is perhaps Canada's longest serving inmate. He claims, as a lot of criminals claim, that he is in the penitentiary for a crime he never committed. There is more than just his word. There is his action and some evidence as well.
His action is that he refuses to admit to the crime because he says he did not murder the girl in Saskatoon in 1969. He has paid a high price for that. The price is that he is denied parole. One of the basic tenets of parole in this country is that before you get parole you must admit to your crime. David Milgaard refuses to do that. He has never been paroled in 21 years. I think he has had a few day passes, but that is all.
There is more to it than that. A couple of years ago a leading forensic expert on the west coast, Dr. Ferris, said after studying the case that with the availability of new forensic technology and knowledge, it was impossible for

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David Milgaard to have committed the murder. That is pretty significant evidence.
Just a few weeks ago we learned that at the behest of the Department of Justice, the RCMP are investigating and have interviewed a suspect in the case. Canadians wonder just what is going on with our justice system and our judicial system.
One of the reasons I am concerned is that despite an application by the counsel for Mr. Milgaard before the Department of Justice to reopen the case, an application that went to the Justice department 15 or 16 months ago, the file on this case has not yet reached the minister's desk.


The Acting Speaker (Mr. Paproski):: I believe the hon. member's time has expired.
I would like to say to the hon. member that he has gone a little further astray as far as the borrowing bill is concerned. There is another place for him to bring that up. That is either at committee or other places he may find here, particularly when the Minister of Justice is in the Elouse, and he could perhaps get some information.
I will give him another minute to wind up and then go to the next speaker.


John Harvard: Mr. Speaker, I mention this only because I think it fits in with what I said at the beginning of my remarks and that is that there is a crisis in confidence in this country. It applies not just to the economy, but it has to do with the GST.
The government says the GST is good for Canada and good for the economy. It will be good for us. We will be happy to pay it. If it is so good for us and so good for the economy, why is the government spending-and this is what it has set aside-$14 million to advertise the GST? Some advertising kitty.
Canadians deserve better, Canadians want something better, they want a government that is in charge, they want action from this government on so many fronts that scream out for attention, and they want some leadership.


The Acting Speaker (Mr. Paproski):: The hon. member has gone over his time, but I will allow a short question or a comment from the hon. member for Dartmouth.


Mr. Ron MacDonald (Dartmouth):: Mr. Speaker, I listened to the fine remarks from my colleague. Could he further elaborate on how this government's misguided economic policies, since we are now on the borrowing authority bill, have led to a further feeling of alienation in western Canada, particularly in the farming sector which feels that this government's economic policies have clearly abandoned the responsibility that a federal government should have for a primary resource industry such as agriculture, and to find out whether or not this government's economic policies have led to a widening gap between western Canada and the rest of the nation?


John Harvard: Mr. Speaker, first of all, I congratulate my colleague on his perspicacity. His astute question fits a concern of mine that has been raised in this House for a number of weeks.
In western Canada agriculture is still king. As agriculture goes, so goes the west. We know that forests are important, oil is important, potash is important and tourism is important, but agriculture is still, in my opinion, king. Let me just mention a couple of things. Agriculture is going through a revolution, through uncertain and difficult times. Some people believe it is on the precipice and that things are beginning to fall apart.
If there was ever a time when agriculture in western Canada needed the most extreme attention from Ottawa, it is now, not yesterday or the day before, but now.
One of the things we get from this government in Ottawa, besides a lot of talk and so-called public relations, is a cut-back in all kinds of support programs. I have mentioned these support programs before and will not enumerate them now.
The cuts in support programs amount to something like $400 million. Agriculture Canada has pointed out that the expected reduction in farm income this year will be as a result of cut-backs in farm support programs. In fact, if my memory serves me correctly, the cut-backs in support will account for 57 per cent of the reduction in farm income this year. That is one point I wanted to make.
The other point has to do with immediate farm aid. Farmers are sowing the grain in the ground. The government came up with this wonderful farm aid program. What the Minister of Agriculture has said is that the federal government is prepared to come up with $500 million if the provinces, in return, will match those federal dollars, dollar for dollar. In other words, if the
May 15, 1990

federal government will come up with $500 million, provinces should come up with $500 million for a total package of $1 billion.
That sounds all right, does it not? Except the provinces are strapped; they are absolutely strapped. They cannot accede to this; they have not got the cash. The strange part is that the federal government has the money. Yet, for some unknown reason, whether it is intransigence or stubbornness, the government will not release the money. The government has been beseeched, begged and implored to release the money without strings attached. It will not do it.
The Minister of Agriculture has said over and over again: "It is time for the provinces to stop playing politics and to get serious". It is time for the federal government to get serious about this matter because farmers are in a desperate situation. They need the money now. If you cannot get the seed in the ground, you can hardly harvest in August and September.


Mr. Les Benjamin (Regina -Lumsden):: Mr. Speaker, I agree entirely with what my hon. friend said about the farmers. We used to say that to the Liberals many years ago.
However, after listening and watching him I did take exception when he said something about the Canada Pension Plan going bankrupt. That is the line the insurance companies peddled since 1966 and every year since.
Every year they increase contributions by all Canadians to the Canada Pension Plan which keeps it actuarially sound. It provides a pool of capital for the provinces and the federal government to borrow from on which they pay interest. In fact it is the interest the provinces pay that keeps the damn thing actuarially sound.
Could the hon. gentleman provide us with any kind of statistical and actuarial evidence? In my opinion, the Canada Pension Plan is one of the best deals an employee can get. Can he provide any evidence about the doomsday scenario we have had since 1966 when it first came in? I have made my full contribution every year, and so has my employer-and there were several of them. The predictions in 1960 were that by the year 1990, and now it has somehow or other changed to the year 2000, it would be bankrupt. Where the hell does he get this? Why does he keep undermining and peddling the
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line of the insurance industry which would like to have that business?


Margaret Anne Mitchell: Right on.


John Harvard: Mr. Speaker, I will try to keep my remarks short because I know we are running out of time.
First of all I would like to say to my good friend from the Regina area that I am not attacking the Canada Pension Plan in principle. I am a supporter of the Canada Pension Plan. It is not only New Democrats and socialists with their high moral values who support something like a pension plan. I happen to support it as well, strongly, and I can tell you that I do not want to see the Canada Pension Plan die. I do not want to see the Canada Pension Plan go bankrupt.
But, by golly, I am not going to bury my head in the sand like my good friend from Regina who just wants to sit there and believe that it is a good idea and that it will somehow swim on its own. It really does not matter what you contribute to it or what kind of enhancement benefits there are. It does not matter how many workers there are, or how many retirees there are. It is just simply a good idea, and if it is a good idea it will work. Typical NDP thinking.


Mr. Maurizio Bevilacqua (York North):: Mr. Speaker, I rise today in the House of Commons to debate Bill C-65, but more important I will take this opportunity to bring Canadians up to date and, more specifically, the 200,000 people who reside in the riding of York North up to date with the government's economic record.
I will illustrate how it has managed, or should I say mismanaged, the finances of this nation. Everywhere I go in the federal riding of York North I meet people-at barber shops, local grocery stores, supermarkets, community centres, and senior citizen homes. During my school speaking tour I spoke to close to 7,000 students in elementary and high schools.
People of all ages are very disappointed in the performance of this government, and rightly so. Under the leadership of the Conservative government the public debt has doubled in five years from $170 billion to $351 billion. The government failed to reduce the public debt at a time when national and international economic growth was at its peak. In five years this government has

May 15, 1990
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accumulated as much debt as have all the other governments from Confederation until 1984.
That requires unbelievable skill. A public debt of $351 billion is equivalent to a personal debt of $25,000 for each Canadian taxpayer. When the Conservatives took over in 1984 the debt was $18,000 per individual. The doubling of the public debt under this government means that each Canadian taxpayer must now pay over $2,500 in taxes each year just to pay the interest on the federal government debt.
The people from my federal riding of York North, whether they live in Aurora, Richmond Hill, Thornhill, Woodbridge, King City, Maple, Kleinburg, or Nobelton, tell me that they have lost total confidence in this government, especially in the way it has handled its financial affairs.
On May 23, 1985, during his budget speech the Minister of Finance stated: "Our actions will directly reduce the annual deficit at the end of the decade to $20 billion." Well the decade has ended, we are into another one, and the deficit has not been reduced. The deficit has risen from $28.1 billion in 1987-88, to $28.7 billion in 1988-89 and to $30.5 billion in 1989-90. That to me is not an impressive record. That is unacceptable, and that is what the people of York North are telling me everywhere I go.
What make matters worse is that this government has raised taxes on Canadians over 30 separate times since 1984, and still the deficit is not under control. On March 6, 1984 the present Minister of Finance stated: "We would cut spending. We would not raise taxes. Tax levels in Canada are already too high".
For the record, federal tax revenues have increased by $50 billion since the Conservatives came to power in 1984. In 1984-85 the federal government collected $71 billion in taxes. In 1990-91 it will collect $121 billion. Canadians have had more than their share of tax increases to help reduce the deficit, but this government has failed drastically to bring down the deficit.
To the residents of the federal riding of York North and to all Canadians the words "Conservative government" are synonymous with taxes, taxes and more taxes. They are getting tired of paying while they watch a completely incompetent team of economic managers
work very hard at producing economic failure for this nation.
Not only is this government taxing Canadians in an unprecedented fashion, but it has coupled that with a high interest rate policy. This high interest rate policy is choking off consumer spending. It is raising mortgage rates and denying young people the right to home ownership. It is stifling investment in this nation, making Canadian exports more expensive in foreign markets and making it more difficult for small Canadian businesses to compete. High interest rates will lead to more business bankruptcies, more families losing their homes, more plant closings, higher unemployment and fewer jobs for Canadians.
The economic policy of this government also includes the goods and services tax. After having studied the proposal by the government, which started at 9 per cent and went to 7 per cent, Liberal members concluded that the goods and services tax should be scrapped. We felt that the implementation of the goods and services tax would cause serious economic damage to Canada. The GST is certainly not revenue neutral. It would be a nightmare for small business and would introduce unprecedented complexities into the tax system.
We also realized that the GST proposal is regressive and would hurt low income families and persons living on fixed incomes including, obviously, seniors and welfare recipients. We also learned that the GST would not be visible and that the government has failed to consider the long-term economic and social impact of the goods and services tax. We also believe that the goods and services tax would put further pressure on the budgets of provincial governments forcing them to either raise taxes, cut services, or run larger deficits. We came to the conclusion that the goods and services tax proposal would damage several key sectors of the Canadian economy and society.
Obviously we had to also look at at least the parameters of what tax reform we would be introducing. We believe that it should be based on some fundamental principles, the first being fairness. The tax system should be based on the ability to pay. It should be based on simplicity. Tax reform should make the tax system easier for Canadians to understand and thus ensure compliance. We also believe that it should be integrated. Over-all tax reform must encompass all forms of taxa-
May 15, 1990

tion and the needs and practices of other levels of government.
We as a party believe that the issue of visibility is also important, that tax reform should be designed to help Canadians understand exactly how much tax they are paying and to which level of government they are paying it.
Also as Liberals, being the progressive people that we are, we believe that tax reform should be revenue neutral. Tax reform should be undertaken for the goal of improving the tax system, not of raising raise taxes.
When the people who reside in the federal riding of North York received my special GST report they responded quite favourably. They also participated in signing petitions which were eventually forwarded to the House. They felt betrayed by the Conservative government, a government that made many election promises but is certainly not following through with action. The many signatures on petitions from residents of York North were a manifestation of frustrations that they felt about this government.
They began to realize that as the Conservative agenda unfolds they are more and more left out of the system. They began looking, for example, at the erosion of the social safety net of our country. They looked at the clawback of seniors' old age pension and family allowances. They looked at the withdrawal of government from unemployment insurance. They looked at the cuts in Established Programs Financing that are putting great financial strain on our provinces.
Essentially what I am very concerned about in this particular issue is that it touches the very essence of what government should be doing. Government should be taking care of the people. Nothing is more important than the issues of health care and education. Anything that we do to hurt post-secondary education will block the major artery to Canada's future.
In many of the meetings I have when I return to my riding to listen to the concerns of the constituents of York North on Fridays or Saturdays, they tell me that they are also concerned about what this government is doing in relation to dismantling the national infrastructures of this nation. We have heard a lot about VIA Rail
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in this House. The residents are very much concerned about not only the symbolism, but the importance in economic terms of linking east and west together.
Although the closure of military bases might not affect the people of North York personally, it does affect the very essence of being Canadian. They are concerned about the refusal of this government to aid municipalities on the issue of infrastructure decay. They are concerned about the CBC and post office cuts. I could go on and on.
Also the people of York North are telling me-and I am sure that in the next election they will tell this government-that they are concerned about the creation of two Canadas: the increasing gap between the rich and the poor. I speak not only about individuals but also about the regions of this nation.
Poverty is increasing in Canada, especially among women and children. To make matters worse, the tax system of this nation affects low income wage earners.
We are also beginning to realize, as we see the Conservative government agenda unfold, that this government has a very narrow, almost tunnel vision of what the future of the nation should be. Nothing symbolizes that more than the cuts to areas such as research and development, EPF and VIA Rail. These examples that are given to us by the government tell me that indeed this nation is going through some serious problems.
Today's debate is not merely a debate about borrowing, it is a debate about the future direction of the nation. Do we accept the concept that we live solely in a market-driven economy where profits come first and people last, or should we be looking at other ways to make sure that within the economic agenda the government includes a humane and compassionate dimension to its policies?
I believe I reflect the feelings of the people whom I represent in the riding of York North when I say that unless this government is interested in self-destruction it should seriously re-examine the direction that it is taking and bring about the type of progressive changes that this nation deeply desires.


Rey D. Pagtakhan: Mr. Speaker, I certainly commend my colleague from North York for his concluding remarks that the government must re-examine its policies to provide for the future of our

May 15, 1990
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country. I cannot help but reiterate that quite strongly for we know that today's decisions will shape our future.
Bill C-65 would give the government the authority to borrow up to $25.5 billion during the 1990-91 fiscal year to cover its budgetary deficit. Certainly this is a political confession of failure of its fiscal and monetary policies.
I would like to draw to your attention, Mr. Speaker, that since the 1988 election the Minister of Finance has relentlessly pursued a brutal and discriminatory high interest rate policy which has resulted in a decrease in housing sales and a decrease in the affordability of homes. It kills businesses and leads to lay-offs and to a decrease in consumer spending. More important, the high interest rate policy will increase the deficit even more. Under the guise of cutting the deficit this government has shown insensitivity to programs for Canadians.
Can we trust the finance minister when he asks us to support his bill on borrowing authority? Of course, we cannot trust this government and the answer has to be a resounding no.
Western Canada's First Ministers have warned the finance minister and the Governor of the Bank of Canada of the ridiculousness with which they try to pursue the high interest rate policy, the real villain today. The Governor of the Bank of Canada remains committed to his policy. We must challenge government to change that policy. It must assume responsibility. The constituents of Winnipeg North demand just that.


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


Some hon. members:: Question.


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


Some hon. members:: Agreed.


Some hon. members:: No.


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


Some hon. members:: Yea.


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


Some hon. members:: Nay.


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


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


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


[Stage Direction]
Motion agreed to, bill read the third time and passed.
The Acting Speaker (Mr. Paproski):: It being 5.30 p.m. the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.


PRIVATE MEMBERS' BUSINESS-BILLS   CANADIAN INSTITUTE OF CHARTERED ACCOUNTANTS MEASURE TO ENACT
Mr. Murray W. Dorin (Edmonton Northwest) moved: that Bill S-10, an act respecting the Canadian Institute of Chartered Accountants, be read the second time and referred to a legislative committee.
Private Members' Business
He said: Mr. Speaker, today I am pleased to have the opportunity to introduce this bill into the House. This bill has come from the Senate and involves an amendment to the act with regard to the Canadian Institute of Chartered Accountants.
There are three chartered accountants in the House of Commons. They are myself, the Minister of Transport and the member for Nanaimo-Cowichan. I must say at the outset that I was quite surprised to find that someone could be both a chartered accountant and a member of the New Democratic Party. I thought that there must be something in that which would violate the Charter. However, perhaps given this opportunity we could consider making an amendment to do something about that, if the hon. member is in agreement.
This bill, first introduced in the Senate, modernizes the statement of objects and powers exercised by the Canadian Institute of Chartered Accountants, a professional body of which I am proud to be a member.

The Canadian Institute of Chartered Accountants was established almost 90 years ago by representatives of existing local and provincial associations of chartered accountants. The purpose of its founders was to establish a national organization that would promote the status of the profession in Canada.

Its incorporating statute, the Dominion Institute of Chartered Accountants Act, 1902, codified the powers and objects of the institute. That statute governs its affairs to this day. The only significant amendment to the act took place in 1951 when the institute adopted its current name, the Canadian Institute of Chartered Accountants. Despite the change in name, however, the institute's powers and objects remained the same as those first adopted in 1902. The objects and powers set forth in the 1902 act have served the profession well for nearly a century but the time has come to recognize the reality of the institute's current role.
Since the passage of the 1902 Act the profession has grown from less than 50 to nearly 48,500 members. Yet, while the sheer growth of the profession has been impressive, numbers alone do not convey how vital the role of CAs has become in every area of Canadian business and commercial activity. The knowledge and

May 15, 1990
Private Members' Business
expertise which a chartered accountant brings to a commercial transaction have become indispensable tools in our modern business world.
The CICA has worked since 1946 at codifying best accounting practice. The result of this long and vigorous commitment has been that the CICA handbook is today regarded as the central reference source of accounting and auditing standards for chartered accountants. As well, governments and financial authorities have recognized the handbook as the primary source of generally accepted accounting principles, for example, by referring to the handbook in statutes such as its incorporation by reference in the Canada Business Corporations Act Regulations.

Canada, a country whose trade activities are complex and which enjoys the benefits of a market economy, plays a major role in promoting harmonisation and co-ordination, at the international level, of accounting and auditing standards. The international business community appreciates the unique achievements of CICA in developing and improving Canadian accounting standards and the presentation of financial and audit information.

Accounting and auditing standards are not static. In this world of rapid change the CICA must monitor, shape and codify the constantly evolving set of generally accepted accounting principles and generally accepted auditing standards. In order to accomplish that goal the CICA relies on a number of committees composed completely of volunteers. The committee's task is to oversee the rigorous due process and extensive public consultations which are essential to the standard setting process. In fact, when those who act as advisors and sounding boards for these communities are included, there are over 600 volunteers who contribute well over
5,000	person days annually to this process.
The CICA's Accounting Standards Committee develops the accounting standards eventually published in the handbook. While most of the volunteers on the committee are chartered accountants, it also includes representatives of the Financial Executives Institute of Canada, the Society of Management Accountants of Canada and the Canadian Council of Financial Analysts.
The Auditing Standards Committee develops and publishes in the handbook recommended standards and practical guidance on auditing matters in the best interests of the CA profession and the public as a whole.
In 1981, the CICA established the Public Sector Accounting and Auditing Committee to recommend standards to improve and harmonize financial reporting, accounting and auditing in the public sector in the best interest of the public, including users, preparers and auditors of financial information. The committee consists of senior public sector officials from the federal, provincial and municipal levels of government as well as public accountants and academics. The Auditor General, in his last report, praised the committee's work and encouraged the government to act upon its recommendations.
Both the business world and the profession are evolving rapidly and becoming much more sophisticated. The resulting complexities have created a need to examine new and potentially controversial accounting practices to meet the public's expectations of standard practice. The CICA is meeting this challenge. It has established an Emerging Issues Committee to review emerging and potentially controversial accounting issues and to reach a consensus on appropriate accounting treatments. It has also published a major independent review, conducted by the Macdonald commission, of the public's expectations of audits which recommended ways to narrow the gap between current practice and those expectations.
The bill cannot, however, be said to give to the CICA the exclusive right to set accounting and auditing standards in Canada. As all members are aware, a private bill, such as this one, cannot affect the rights of any person other than the members of the organization which is the subject of the bill. The Interpretation Act is quite clear on this point.
In many ways the bill which is being introduced today simply recognizes the scope and importance of current CA activities and explicitly provides the profession with the powers and objects which reflect that reality. It also sets out in broad terms the mandate which the institute enjoys with respect to such matters as member services, strategic planning, the development of post qualification education and the promotion of the international harmo-
May 15, 1990

nization and co-ordination of accounting and auditing standards.
This bill is the result of lengthy consultation, co-operation and careful review. The bill has been approved by the Canadian Institute's board of governors on which sit representatives of all provincial institutes. It incorporates the CICA's mission statement and its statement of objectives and powers, and reflects fully the agreed division of responsibilities between the provincial institutes of chartered accountants and the CICA. The process of reform which brings this bill before the House was endorsed by the CICA's annual general meeting held in St. John's, Newfoundland, in August 1988.
This bill establishes a clear and modern set of powers and objectives which will help to lead the chartered accountancy profession into the next century. By recognizing the scope and importance of the activities carried on by the institute, and by CA's generally, we believe the proposed amendments are worthy of the support of this House.


Mr. Alfonso Gagliano (Saint-Leonard):: Mr. Speaker, I welcome this opportunity to take part in the debate on second reading of Bill S-10, an Act respecting the Canadian Institute of Chartered Accountants, a bill that is to be referred to a legislative committee.
First of all, I speak also as an accountant by profession, although not a member of CICA but of the Certified General Accountants Association of Canada, one of three professional accountants' organizations incorporated under an Act of Parliament. The hon. member tended to sing the praises of his association. As a CGA, Mr. Speaker, I shall, if I may, without taking to much of your time, say there are three accounting organizations in Canada whose members are either certified general accountants, certified management accountants or chartered accountants. These three groups have the same status with respect to the international standardization process. I may add that there are about 40,000 CGAs, including both members and students, in this country. Mr. Speaker, I must say I agree with the hon. member that we should pass the bill on second reading and then consider the legislation in a legislative committee, to give
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representatives of the other associations, the CGAs and the CMAs, a chance to make some major submissions.
Mr. Speaker, the CAs are trying to update their statutes and regulations. However, when we read those sections, it becomes clear-this is nothing new, and I am thinking of the situation in the province of Quebec-that the CICA is trying to have a monopoly on the profession in Canada.
This is quite obvious, Mr. Speaker, when we read in section 2.:
(1)	The purpose of the Institute is to promote by all lawful means the practice of accountancy within Canada.
(2)	In carrying out its purpose, the Institute has all 1he powers necessary-
This is followed, Mr. Speaker, by a list of the powers it needs to carry out its purpose. In most cases-I am not going to read the whole thing because it would take too long-the section refers to the membership and how they should conduct themselves. I will give an example:
(b)	to assist and encourage provincial, territorial and affiliated institutes in promoting and developing appropriate and uniform standards of qualification for admission to membership therein
Paragraph (c) reads and I quote:
(c)	to create and improve standards of financial accounting, reporting and auditing;
It does not refer to the membership. So when we are talking about the profession, the CICA speaks for the whole country, and when we are talking about internal standards, the CICA refers to its membership. I think it is clear from this bill that the CICA is trying to get a monopoly on the accounting and auditing profession in Canada.
I am sure that the other two organizations, the CGAS and the CMAs, will be anxious to appear before the legislative committee to make their representations. We really must correct those- It seems the president of the CICA said he was not seeking a monopoly position for the Institute. If he is not, this should be made dear in the Act, because the present legislation, Mr. Speaker-

There is a monopoly perception. It is very dear in the legislation where it says:

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Adjournment Debate
Section 2 of the said Act is repealed and the following substituted
therefor:
2. (1) The purpose of the Institute is to promote by all lawful means the practice of accountancy within Canada.
This is for its members within Canada. What about the CGA? What about the CMA? There are three accounting organizations in Canada recognized by this Parliament. Therefore, with the pretext of improving or updating its constitution, the Canadian Charter Accountants Institute should not acquire a monopoly in the accounting and auditing profession.
With that, I agree that we should pass this bill at second reading and go to the legislative committee so that we can invite the audit organization to present its briefs in order that we can correct this piece of legislation.


David Stupich: Mr. Speaker, we cannot really invite associations that are controlled by other legislation to make changes to this bill. They might want to bring in changes for their own at some later date, but that is up to them.
I will comment only briefly on the remarks of the member for Edmonton Northwest. Not only am I a CA of some long standing, I am also an FCA. He, at least, will know what that means.
We are pleased to support this bill at second reading and pleased to support it going to committee where any interested party will have an opportunity to make representations.


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


Some hon. members:: Agreed.


[Stage Direction]
Motion agreed to, bill read the second time and referred to a legislative committee.
The Acting Speaker (Mr. Paproski):: The time provided for the consideration of Private Members' Business has now expired. Pursuant to Standing Order 96(1), the order is dropped from the Order Paper.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Terrence (Terry) Clifford: Mr. Speaker, I rise on this occasion to comment further on my question to the Minister for Science with regard to the scholarship program.
I am quite alarmed, as I am sure are many Canadians, that although they applaud the initiative of the government with its scholarship program which involves 900 scholarships for scientists and engineers badly needed in Canada, the facts are worrisome.
The fact is that the number of engineers and trained scientists in this country does not seem to be going up from the 20 per cent that it has been. Scientific illiteracy is rampant in this country. Two-thirds of our adult population cannot correctly identify the source of acid rain. More than half believe that the earliest humans may have lived side by side with the dinosaurs. At stake is the very future of Canada in the global economy.
A recent University of Calgary study suggests that only 14 per cent of adult Canadians have a clear understanding of DNA, and only 37 per cent understand the nature and cause of acid rain.
Two-thirds of Canadians cannot even name a single Canadian scientist. Clearly we have got a problem. If we are going to take advantage of this scholarship program and produce more trained scientists and engineers, then government action is necessary.
I was pleased with the initiative of the Department of Science and Technology, which two years ago developed a federal program to launch public awareness to nurture what is badly needed in this country-a science culture. Some $10 million was aimed at 14 to 15 year olds in order to do this. We now see signs on buses which urge young Canadians to partake of a science education and to become scientifically literate, looking to these areas for a future job in Canada.
Clearly what some of the experts have been telling us is that teacher education in science and mathematics is lacking. Professor Paul Park, Dean of Education at Queen's University, believes that students would be more science oriented if their elementary teachers were more comfortable themselves with science.
May 15, 1990

Alberta is already addressing this issue through a teacher's research experience program. Other universities have identified it as one of the main weaknesses.
Dr. William Fyfe, Dean of the Faculty of Science at the University of Western Ontario, says that Canada faces an acute shortage of scientists in the near future. He states further:
The gap between the informed and those not is increasing. Scientific illiteracy is increasing. The root cause is the training of teachers and 1 think the universities have failed. We're trying to improve this with a new program for science teachers, and a very practical field program for kids of all ages, using the environment to teach basic science. We've made a start, but it needs lots of work.
Clearly we must work with teachers. We have to put in some energy. We have to call not just on the government and the ministers such as the minister responsible for science and technology, but the private sector to help.
During summer months science teachers of all levels are encouraged to take part in projects at the Alberta Research Council, for example. Those who oversee the programs say there is an amazing level of enthusiasm the teachers take back to the classroom. This is proving to be a very effective way of making science and technology a more attractive career choice for children.
I might add that a former colleague of ours, Mr. Elzinga, who is now the Minister of Trade for the province of Alberta, has joined in this debate fully. He wants his ministry and Alberta to respond to young Albertans and children to say that they have a future.
The University of Calgary has reaffirmed that women tend to score lower in science literacy and interest than men. The result, most agree, has to do with early conditioning.
But what is happening? I am happy to say that the B.C. government had funded a science camp for girls.
Recently, in London, Ontario, I noticed an advertisement stating that some trained female scientists are opening a camp for young Canadians. I think these are good steps.

The college dropout level is 30 per cent. This means
100,000	young people who are trying to enter the labour market without a college degree.
Adjournment Debate
Canada ranks tenth among eighteen industrialized countries when we compare levels of college enrolment of seventeen-year-olds.
We have to stop this drop-out rate. We have to increase the opportunities for young people.
The minister has clearly shown some direction and his ministry is on side, but more effort is going to be required from all of us.
Canada needs trained scientists and mathematicians so that we can move ahead in research and development from being one of the worst nations in the world in terms of contributions to R and D in terms of our Gross National Product. I think we are about seventh in terms of our contributions. We should move up the ladder from the 1.3 per cent into the 2 per cent range. To do that we need the government and the private sector to work together so that there is the stimulus for young people to respond and to move into these fields as a career.
We need young people who can see when they are very young that they can work toward it with more enlightened and informed teachers. We can then start to see a Canada that is going to be competitive in the 1990s as we roll toward big competition from Europe, the Pacific Rim and indeed our partner the United States.
We can grow together. Young people will have the opportunity. They will not have to go away to learn science and become scientifically literate. Indeed, they will be able to make it part of their lifestyle in the future.
I urge the minister concerned to work with his colleagues and the Prime Minister to make it a priority with the Canadian government. The private sector will join in, and the young people of Canada will congratulate him.


Mrs. Suzanne Duplessis (Parliamentary Secretary to Minister of State (Science and Technology)):: Mr. Speaker, the Canada Scholarships Program was announced by the Prime Minister in 1988 with the aim of recognizing and rewarding the best and brightest students entering undergraduate programs in naturral sciences and engineering across Canada. The focus on excellence in the

May 15, 1990
Adjournment Debate
program underpins the scholarships award process and the criteria for renewal of the scholarships. The program, through its encouragement to outstanding students to pursue studies in these fields, will contribute in an important way to Canada's future industrial competitiveness. With excellent people, our industry will be able to produce excellent products and foster excellence in processes. Standards of excellence in industry are necessary to ensure that Canadians continue to have the standards of living we currently enjoy.
The first class standing renewal requirement for the program is not easy to meet, especially in first year when students are making major life-style adjustments. When it became apparent last year that significant numbers of our 1988-89 Canada scholars were not going to make this requirement, we conducted a thorough review of the renewal criterion and consulted with a number of universities. A decision was made at that time to maintain the standards that has been established for the program in recongnition that, unless excellence was the basis for holding the scholarship throughout a scholar's tenure, the program's focus on excellence would be compromised.
The renewal requirements are stringent. Nonetheless, 55 per cent of the 2,500 1988-89 Canada scholars met the grade and were awarded the scholarship for a second year. Although I would like to see better renewal results, they are gratifying given the general performance of first year undergraduates in natural sciences and engineering. Of the students who enter university with first class standing in these disciplines, only 25 percent on average can be expected to maintain first class standing in their first year.
To counteract the loss of scholars in the 1988-89 program resulting from non-renewal, 900 additional first year scholarships were awarded in 1989-90. We currently have close to 4,800 top science and engineering students in the program, studying at over 80 universities and colleges across Canada. These young people are tremendous role models for their generation. I am pleased that the government of Canada can support them in that role and excited about their prospects to make a difference in the science and technology scene in Canada.
I would like to see higher rates of renewal for Canada scholars in the future.
My officials will be undertaking further analysis when data for 1989-90 scholars become available to attempt to isolate the factors which contribute most to renewal and to come up with measures which will encourage higher retention rates.
It is evident from the 1988-89 data that the most significant factor affecting retention of the scholarship is gender. Whereas 64 percent of males renewed their sholarships last year, only 46 percent of females renewed.
This differential is clearly unacceptable. Studies are being undertaken this year to increase our understanding of these results. In the meantime, a pilot project to establish mentor clubs in an attempt to improve the prospects for renewal has been initiated.
The Science Minister has asked me to give the hon. member who raised the question regarding standards for the Canada Scholarships Program the assurance that he will be on guard to maintain standards of excellence in the program.


CHILD CARE
Mary Catherine Clancy: Mr. Speaker, I rise today to raise again a question I asked of the Prime Minister over a year ago. It is a question that I have asked subsequently of various and sundry other ministers, including the Minister of National Health and Welfare, the Minister of Justice, and the Minister of Finance.
The question is this. Given the problems facing Canadian parents and children, given the problems facing Canadian women in the workforce, given the fact that there are one million latch-key children in this country, why has the government cancelled the National Child Care Program?
The answer, not that I ever received one particularly, seems to be-if one can surmise and read between the lines-that in this country money is more important than children and child care, and that reducing the deficit, which is certainly an important thing to do and which has not been done to date by this government but it is an important theory, is more important than the care of children.
We all believe in fiscal responsibility, but we also know that we have to have certain priorities.
May 15, 1990

What a noble government we have that snatches valuable and needed programs away from Canadian children, all in the name of saving money. The wealthy are the ones who benefit, and the weak and the poor are the ones who are chosen to be targeted.
It is not just children who are targeted. We have seen a clawback of old age pensions. We have seen a clawback of family allowances from parents, from mothers in particular. It makes one wonder as to just where the priorities of the government are when it decides that these are the people who should be made to suffer and bear the burden of the cuts that the government has inflicted over the past five years.
We have seen seniors targeted. We have seen mothers and children targeted. We have seen the sick targeted. Veterans were targeted this year, as well. Going after Canadian veterans was not a popular move. Indeed, it was a move even less popular than going after seniors' pensions some time ago. In the end it appears that the best target in the spectrum is Canadian children.
Right across the country we know the problems facing parents who must work to achieve a decent standard of living. It is extremely rare today that, for the "average" family of four, one income is enough to provide the necessities of life, let alone a few of the comforts that make life more bearable. It is a fact of life today that both parents in a two-parent family will have to work. Consequently, child care is needed for those families.
The other fact of life is the increasing number of single-parent families, the vast majority of whom are headed by women. Again, there is no question that if these women do not have gainful employment their choice is the welfare system. They do not want to make that choice-they want to work.
Over and over again we hear about people who do not really understand the average Canadian out there and who say that there is unemployment in Atlantic Canada, or unemployment among single parents, or unemployment in the north because "those people do not want to work". Those of us who sit in this House know that is not true. We know that Canadians want to work. They want to be productive workers, want to contribute to this society, want to raise their families and want to partake in all of the good things that should be the legacy of all Canadian citizens. If we do not provide an adequate
Adjournment Debate
social service system for all Canadians, then we are all the poorer.
I spent five years on the board of the largest child care centre in Atlantic Canada. This centre has more than 12 units, or locations, across the city of Halifax. It deals with pre-school children and with children who need afterschool and lunch-time programs. It deals with disabled children in that it has one of the very few units for disabled children, whether physically disabled or otherwise disabled. It has a French immersion program and it has enriched programs with specific dance and music programs, et cetera.
Lucky are the parents who can take advantage of this kind of program. If parents live in rural areas, they will probably not even have the access to the barest minimum standard child care program. It is just not good enough.
My hon. friend across the way from Etobicoke-Lake-shore, who I suspect is going to respond to me, will probably try to blame this matter on the Senate of Canada because it did not pass the bill before the election was called a long time ago. I merely state that it was a long time ago. We are into a new mandate. The children of Canada are waiting. I know that the member for Etobicoke-Lakeshore has a heart. I would like to hear him say that this government has a heart and that this problem is one that is not going to be addressed in some airy-fairy future but now.


Mr. Patrick Boyer (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, I rise to accept the invitation and I say without hesitation that the government has a heart and I would like to show how that is in fact the case. As she stated, the hon. member for Halifax has repeatedly raised in the House the question of the federal government's involvement with child care programs, national standards and so on. I think she quite rightly keeps this issue high on the public agenda.
In a preliminary way, I want to say that I think that this is not entirely a matter for the federal government. The closer that one is to the home, the community, I think of provincial governments, I think of unions, I think of companies, families, churches, many other organizations that are much closer to the children and the families as being more appropriately involved in this. Yet, of course, as we seek to have national standards, there is clearly an important role for the federal government.

May 15, 1990
Adjournment Debate
In December, 1987 the federal government announced a three-part policy to deal with child care, carrying into effect a commitment that had been made by the Prime Minister. Two of the three parts have been carried forward.
Let me point out the first aspect of that. Families have been given an enhanced tax assistance for pre-school aged children as a result of changes to the child care expense deduction and the introduction of a supplement to the child tax credit. This became effective in the tax year 1988 and the expense deduction was doubled from $2,000 to $4,000 per child for children six years of age and under and, also very important, for children with special needs.
As well, again showing that the government has heart, a new $200 supplement was added to the basic child tax credit. This supplement is particularly aimed at younger children, specifically children in lower and middle-income families. Taken together these tax measures, which were key components of the government's 1987 child care policy', have provided additional financial assistance for about 1.4 million families in our country.
Also part of the national strategy was the Child Care Initiatives Fund. This was established in 1988 to support whatever innovative approaches were coming from the community. I hope the member would agree that community involvement is what we need. This fund provides
funding to projects that develop or demonstrate quality child care services for Canadian families. So far, more than $33 million in funding has been provided under this fund.
The hon. member said that money seems more important than children to this government. These facts totally contradict her allegations.
In fact, the third part of the strategy had to do with the legislation that was passed in the House of Commons. The hon. member for Halifax is quite right, it was held up in the other place dominated by members of her party. So there is some accounting to be made there.
As a result of having missed that window of opportunity, the Minister of Finance indicated in his 1989 budget that the funds were not there to proceed with that. However, there have been subsequent announcements by the government that this will be done within this mandate. It shows that actions speak louder than words when it comes to proving who has a heart.


The Acting Speaker (Mr. Paproski):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, the House stands adjourned until tomorrow at 2 p.m, pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 6.06 p.m.
[Stage Direction]
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[Stage Direction]
Wednesday, May 16, 1990